Say Goodbye to Hourly Billing

“How much will it cost?”

“Roughly this much, but I’ll let you know after the job is complete, it depends on how long it takes”

This is how legal services are traditionally priced.  But surely there’s a better way?

Fundamentally there are only so many hours in the day, so in the legal services field it seems natural to price work according to the time that is taken to do the work. Hourly billing has been long-established and is inherently “fair” as it is easy to understand and correlates to the effort taken to produce any given work product.

However, there are a number of perverse incentives when this philosophy is pursued to its logical conclusion.

• First of all, there is a natural incentive to take longer so that the value of the bill is higher.  No conscientious professional would deliberately pad out their time sheets, but there is an in-built incentive that you have to battle against.
• Similarly, this kind of mindset naturally disincentivises adoption of technology and greater efficiencies.  Again, good firms will invest in these things but there is a systemic “drag” on proper investment.
• Working with hourly billing also moves risk on to the client rather than the firm.  Any unexpected events or delays just end up being charged out to the client.
• This often means that the price of a job can be divorced from the value that it actually delivers.

Of course, many modern firms work on the basis of fixed fees, and since launch we at Scintilla have always had an ethos of honouring quotes so long as the original scope has not been changed by our client, which has helped avoid the issue of surprise invoices.

However, what we have now launched is a radically different way of pricing our services. We use the word “radical” because the term for a “root” in Latin is “radix”, so it is a change that goes to the root of how we think about pricing our services, changing some of the fundamental assumptions behind how services are priced.

Instead, we look at a project and then simply agree in advance a price for delivery of a given scope of work.  It’s not much more complicated than that!

• A price can be set for a given one-off project, or we can manage an entire IP portfolio in this way, for example giving a set monthly fee to cover all IP activities on an all-inclusive basis.
• Plans can cover portfolio creation and management (drafting and prosecution of patents, trade marks and registered designs), but also strategic services such as competitor monitoring, strategy development or our fractional CIPO (chief intellectual property officer) service.

This approach comes into its own when it comes to managing international IP portfolios.  There are still many out of pocket expenses involved in managing our colleagues’ charges from various countries around the world, but rather than passing on sporadic unexpected charges, we take the responsibility for anticipating and managing these costs within the agreed budget.