What is Fixed Price Billing?

Dec 1, 2016
Reading Time: 2 minutes
Written by Ricky Chan

Understanding the different ways of billing is important for both businesses and consumers. A failure to do so will often result in unnecessary inefficiencies and costs. Given that small businesses and startups have limited capital and cash flows, it is important for owners to be aware of their finances and legal costs at all times. One of the best ways for small businesses to prevent their legal costs from blowing out is via fixed price billing.

LawPath offers small business owners 3 free fixed price legal advice via its quick quote services.

Below is a summary of fixed price billing and how it could impact your business.

What is it?

Fixed price billing refers to a standard fee for common defined services. Typically useful where the steps in the transaction are well understood by the practitioner or where the transaction consists of standard steps, these payments are collected in a lump sum in transactional matters, upfront or upon completion. As such, fixed price billing is often used by firms which specialise and are able to estimate work involved in a type of matter with some certainty.

A good example where work can be estimated with certainty is the process of drafting Website Terms and Conditions. In contrast to the potential blowout of costs through hourly-billing, business owners can create a Website Terms and Conditions, before seeking a fixed price quote through LawPath for further legal guidance and amendments. This method would significantly reduce the legal costs.


Key advantages offered by utilising fixed price billing include:

  1. A high level of consumer acceptance.
  2. Low potential for client disputes provided there is adequate communication of fee and service.
  3. Defined profitability for each service, rewarding efficiency.


However, fixed hour billing suffers from the following difficulties:

  1. Reduced profitability for the firm if the service is complex. If expenditures exceed the fixed price contract amount, the firm must bear the cost of overruns.
  2. Skills imbalance between parties in estimating and negotiating fixed price contract.
  3. Increased investment costs in IT and knowledge management.

Choosing the right way to pick your form of billing is essential to understanding your costs and setting the right prices for your goods or services. We recommend seeking advice from an experienced business lawyer when drafting out your fixed price billing contract.

Need help? Contact a LawPath consultant on 1800 LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from our network of 600+ expert lawyers or to get answers to your legal questions.

Popular Guides

Get the latest news

By clicking ‘Sign up to newsletter’ you are agreeing to the Lawpath Terms and Conditions

You may also like


Create and access documents anytime, anywhere

Sign up for one of our legal plans to get started.