Law firm pricing: hourly, fixed fee and in between

The main law firm pricing strategies are hourly rates, fixed fees, capped fees, staged (phased) fees, conditional or damages-based agreements, and value-based pricing. Most UK firms mix them by service. The right choice depends on how predictable the work is and who should carry the risk of it overrunning. For published consumer services, SRA rules also require price information on the firm's website.

This post is part of our series on law firm profit margins and what drives them. It is an operational guide. What your firm may charge, and how it must describe its charges, are questions for your COLP; nothing here is legal or financial advice.

What pricing models do law firms use?

The main models, with who carries the risk in each:

• Hourly rates. The client pays for time recorded, at a rate that usually varies by fee-earner grade. The client carries the risk of the matter taking longer. The firm carries the risk of the client disputing the bill.
• Fixed fees. One agreed price for a defined piece of work. The firm carries the risk of overrun. Covered in detail in how to price fixed fees without losing money.
• Capped fees. Hourly billing up to an agreed ceiling. The client gets certainty of the maximum; the firm keeps the upside of finishing early only if it bills under the cap.
• Staged or phased fees. A fixed or estimated fee for each stage of a matter (for example, pre-action, issue, disclosure, trial). This shares risk: the scope of each stage is clearer than the whole.
• Conditional and damages-based agreements. Payment depends on the outcome, within rules set by statute and regulation. Whether and how your firm uses them is a question for your COLP and your insurers.
• Value-based pricing. A price based on what the outcome is worth to the client rather than the time it takes. Rarer in practice than in conference talks, and hard to do without good data on your own delivery costs.
• Subscriptions and retainers. A regular fee for a defined level of ongoing service, most common with business clients.

Which pricing model is most common in UK firms?

It depends on the service. The clearest published UK evidence is for consumer work. The Legal Services Board's 2024 prices research, based on 1,534 telephone interviews with providers and published in June 2025, found that fixed fees are now predominant in conveyancing, offered by as many as three-quarters of firms. As reported by the Law Gazette, firms offering fixed fees were on average cheaper than those working to estimates: the mean price for a freehold sale was £1,100 on a fixed fee, against £1,246 on an estimate, and a divorce was £795 against £1,181.

The same research found that 64% of fixed-fee firms said they very rarely or never ended up charging more than quoted.

I could not find a comparable published UK split for commercial, litigation or business work. In those areas, hourly billing with estimates, caps or staged fees remains common, but I would not put a number on it.

What do the SRA transparency rules require on price?

The SRA Transparency Rules require firms that offer certain services to the public (for example residential conveyancing, probate, some employment tribunal work, immigration and motoring offences, among others listed in the rules) to publish cost information on their website. Under rule 1.5, that information must include the total cost of the service or, where that is not practicable, the average cost or range of costs; the basis for the charges, including any hourly rates or fixed fees; likely disbursements; VAT; and what the service includes and excludes. It must be clear, accessible and in a prominent place. Publicly funded work is excluded.

Separately, the SRA Code of Conduct requires solicitors to ensure clients receive the best possible information about how their matter will be priced and, as it progresses, its likely overall cost. Your COLP should confirm which services your firm must publish prices for. There is more on how this plays out at the enquiry stage in SRA price transparency rules and enquiries.

How should a law firm choose a pricing strategy?

Choose per service, not per firm. A useful test is to ask two questions about each type of matter.

• How predictable is the work? If most matters of this type follow the same steps and take similar time, a fixed fee is low-risk. If the work depends on the other side, the court or facts you do not yet know, it is not.
• How price-sensitive is the buyer, and how do they compare? A consumer buying a probate service compares published prices. A business buying litigation compares confidence and outcomes.

A simple decision grid:

• Predictable and price-compared: fixed fee, published clearly. Most consumer conveyancing, uncontested probate, wills.
• Predictable in stages, unpredictable overall: staged fees with a fixed or capped price per stage. Much family and employment work.
• Unpredictable and relationship-led: hourly with a clear estimate, updated at each stage, possibly capped. Complex litigation and commercial work.
• High value to the client, low effort for the firm: consider value pricing, carefully.

How do you set your hourly rates?

Start from cost, then look at the market. The floor is your fully loaded cost per realistic chargeable hour, which is explained in law firm cost structure. The Law Society's 2025 survey summary reported a median hourly cost per fee-earner of £123.40 and median hourly fees of £133.01, a narrow gap that shows how little room there is below the floor.

For a public reference point, the judiciary's guideline hourly rates for 2026 set rates by grade and location for use when costs are assessed by a court. For example, Grade A (over eight years' experience) is £295 in National 1 and £579 in London 1. These are not market rates and are not a recommendation, but they are published, dated and widely used as an anchor. There is more in fee-earner guideline hourly rates.

What is the difference between price and realised price?

The rate card is what you ask. Realisation is what you get. A fee-earner billing at £250 an hour who writes off a fifth of recorded time realises £200. A fixed fee of £2,000 that takes twice the planned hours realises half the planned hourly rate.

The most useful pricing report I know is simple: for each service, the planned price, the planned hours and the actual hours, per matter, for the last twenty matters. It shows immediately which services are priced well and which are subsidised. Most firms can build it from their own time records.

When should a firm tell an enquirer the price?

Early, and in a way the enquirer can understand. For published consumer services, the price is already on the website, and enquirers often ring to check it applies to them. A firm that cannot answer "roughly what will this cost?" on the first call, even with a range and the assumptions behind it, tends to lose the enquirer to a firm that can.

This is where pricing and the front door meet. A clear pricing model lets whoever picks up the phone say something useful. A vague one pushes the question to a fee-earner, who is in a meeting, and the enquirer rings someone else.

How do you move a service from hourly to fixed fees?

Carefully, and from data. A method that keeps the risk visible:

• Step 1. Pull the last twenty to thirty closed matters of that type. Record the hours actually spent by each grade, and the fee actually billed and collected.
• Step 2. Look at the spread, not the average. If most matters cluster tightly and a few run long, you can fix the price for the cluster and define the long ones out of scope.
• Step 3. Write the scope first, then the price. List what is included, what is not, and the events that would change the price (a contested hearing, a third party, a missing document).
• Step 4. Price at the cluster's cost plus margin, not at the average hourly bill. The average includes the outliers you have just scoped out.
• Step 5. Keep recording time on fixed-fee matters for at least the first year, reported separately, so you can see whether the price holds.
• Step 6. Review after ten matters. Adjust the price or the scope, not both at once.

The full method, with a worked example, is in how to price fixed fees without losing money.

A trap: discounting at the point of enquiry

When a firm competes on price at the first call, the easiest lever is a discount. It is also the most expensive: a 10% discount comes straight off margin, not revenue. Before discounting, check what the enquirer actually needs to hear. Often it is certainty (what is included, what is not, and what happens if it changes), not a lower number. A clear scope statement often wins more work than a discount.

How often should a firm review its prices?

At least once a year per service, with the data above. Review sooner if:

• Realisation on a service falls for two quarters running.
• Enquiries convert noticeably worse than before (price is one possible reason; response time is another).
• The scope of the typical matter has changed, for example after a procedural reform.
• Your costs have moved materially, for example after a PI renewal or a pay review.

Where does WasilX fit?

Pricing only works if the enquiry reaches someone who can talk about it. Cam, our AI Engagement Coordinator, takes calls on the firm's line at any hour, says it is AI, asks the firm's own qualifying questions, books a call back with the right fee-earner and sends the firm a summary. The fee-earner calls back knowing what the matter is, which makes the pricing conversation much easier to have. If that is where your firm loses enquiries, let's talk.

See also are law firms profitable? for the margin side of this.

Frequently asked questions

What is the most common pricing model for UK law firms? It depends on the service. The Legal Services Board's 2024 research found fixed fees predominant in conveyancing, offered by as many as three-quarters of firms. Hourly billing with estimates remains common for complex and business work.

Are fixed fees cheaper for clients? In the Legal Services Board's 2024 research, providers offering fixed prices were on average cheaper than those working to estimates for the services studied, which were conveyancing, divorce, and wills, trusts and probate.

Do law firms have to publish their prices? Under the SRA Transparency Rules, firms offering certain listed services to the public must publish cost information on their website. Your COLP can confirm which of your services are covered.

What is value-based pricing for lawyers? Pricing based on what the outcome is worth to the client rather than the time spent. It needs good data on your own delivery costs to avoid underpricing.

How often should a law firm raise its rates? Review at least once a year per service, using realisation and actual hours against plan, and whenever costs change materially.