You call around to a few different attorneys and find some attorneys that will charge you by the hour and other attorneys that will charge a fixed price for their services.
Both attorneys tell you their billing structure is better, so now what? How do you decide which is better, hourly or fixed price?
Hourly or fixed price?
You have a business to protect and you decide you need an intellectual property (IP) attorney to help you with your patents, trademarks, or copyrights. You call around to a few different attorneys and find some attorneys that will charge you by the hour and other attorneys that will charge a fixed price for their services. Both attorneys tell you their billing structure is better, so now what? How do you decide which is better, hourly or fixed price?
Regular or Complex?
If you are hiring an attorney for a big complex project, an hourly rate is likely the way to go. If an attorney is faced with a big complex project that they are not sure of an approximate amount of time it will take, the attorney will pad the fixed price with a lot of cushion so that they do not lose money on the project.
However, rarely is preparing, filing, or prosecuting a patent, trademark, or copyright a big or complex project, as opposed to a multi-year lawsuit. An IP attorney typically has a pretty good idea of the amount of time involved with these types of matters. Yet, some attorneys still want the hourly rate structure so that they can relax and take their time in preparing the matter. They will then scare you into the hourly by pointing out that if they get the matter done quickly you could overpay under a fixed price structure.
This is rarely the case with the fixed price structure. Most fixed price attorneys offer more competitive rates than hourly attorneys. Because there are a lot of law firms out there that fixed price attorneys are competing with, the fixed price attorneys do not build in a large cushion to overbill you, as another attorney would simply undercut their price.
An additional benefit of fixed price attorneys is that you also don’t have to worry about an ever-growing bill or if you are being billed every time you call him with a question. With a fixed price, you can call the IP attorney up with questions, concerns, or revisions without wondering how much the phone call will cost you. It allows you to focus on the patent, trademark, or copyright rather than the attorney billing you for the phone call or response to your email.
Rule of thumb
So as a rule of thumb, if the matter is big, complex, with an undefined endpoint, hourly billing is likely your best option. For patents, trademarks, and copyrights, you will get better service at a better price with fixed price attorneys.