Whatever the perspective,
whether as a professional, a consumer, an economist,
there is insufficient value to continue the practice of hourly billing
The reasons to avoid it are legion and persuasive, but for this audience the most telling argument is that working for an hourly wage prevents the accumulation of wealth while it encourages an excessive investment of the most valuable resource, time.
The pivot point for evaluating hourly billing is that by definition it forces on the professional and the consumer diametrically opposing goals; one wants to maximize; the other, minimize. That is an obstruction that prevents trust, a real hurdle when building any business because it focuses the consumer’s attention on the need to trust the professional on both competence and cost simultaneously. Worse, it supports an impression that the professional lacks confidence.
Instead, there should be a single, overarching common goal between the parties: complete the task at hand at the agreed-upon price.
If the task is especially complex, where the risks of uncertainty cannot be contained, then divide and conquer— design and price the initial task so its goal is to determine the follow-on services required, while providing a range of estimates for the follow-on work. In other words, piecemeal the pricing based on definable steps.
If you needed a medical specialist, an intervening cardiologist or a neurosurgeon, the hourly rate would be not only irrelevant, but also actually detrimental to your decision making. You’d want the task accomplished and the overall price affordable. Period.
Our recent publication, Case Study: Foreclosure, tells how one lawyer and his firm moved from charging for its labor to charging for the job. The result was happier clients and a five-times increase in effective income.