Chose a flat fee retainer over hourly billing for my first 6 months

I had to pick between a flat fee retainer and hourly billing when I set up my small consulting shop back in March. Went with the flat fee because clients hate uncertainty and it made budgeting easier for them. Charged $2,500 a month for basic legal check-ins and document review. After 5 months, I noticed I was putting in about 15 hours a week for what used to be maybe 10 on hourly. Workload crept up but the money stayed the same, so I'm switching back to hourly next quarter. Anyone else try this and find the same problem?

2 comments

2 Comments

nora11013d ago

I get what you're saying vera514 but I actually see it a little different. Flat fee forced me to get way more disciplined about setting hard boundaries in the initial contract, like a clear list of what's included and a cap on email replies per week. I still do flat fee for a few clients and I just build in a 20% buffer on hours and a quarterly rate review clause so we can adjust if the work changes.

vera51413d ago

Totally been there, that scope creep hits you like a ton of bricks. I did a flat fee for a client last year, $3,000 a month for "ongoing contract support." By month four they were emailing me at 10 PM about formatting stuff and asking for extra research I didn't plan for. Hourly keeps things honest for both sides, I think you're making the right call going back.