Source: Above the Law
The billable hour is under siege. As legal departments demand more value and predictability from outside counsel, scope-based pricing is quietly revolutionizing how legal services are bought and sold.
The Problem with Hourly Billing
Hourly billing for ongoing Advice & Counsel work creates what amounts to an “open checkbook” system. It discourages efficiency, creates cost uncertainty, and misaligns incentives by rewarding time over value.
“When you have hourly pricing… it can cause your attorneys to wonder whether they should call outside counsel,” explains Collin Smyser, General Counsel at Option Care Health. “Hourly rates don’t tie to value… What you don’t want is to be consistently surprised to the upside.”
The Scope-Based Solution
Scope-based fixed-fee pricing flips the model. Instead of undefined access and unlimited spend, clients get structured agreements with clearly defined services, delivery expectations, and responsiveness standards—all for predictable monthly fees.
Support can be customized by complexity and value. Routine document review commands one price tier, while strategic counsel requiring executive-level expertise commands another. “It’s perfectly fine to say the gold level of service will cost you this much, and the silver will cost you less,” Smyser notes.
The AI Factor
Artificial intelligence is accelerating this shift. Tasks that once took hours now take minutes, but clients only benefit if pricing models evolve. Scope-based pricing ensures legal departments aren’t paying for manual effort that AI already handles while rewarding firms that embrace efficiency.
The Benefits
Beyond cost savings, the model delivers budget predictability, eliminating the “invoice and accrual grind” that consumes administrative resources. Legal teams don’t hesitate to call when the “meter isn’t running,” and firms gain clarity about expectations.
“You can avoid fighting with your finance team over cost overruns… and avoid fights with your vendors and your law firms over individual lines in the invoices,” Smyser explains.
Making the Transition
Implementation starts with defining which work stays in-house versus outside counsel, including service-level expectations. A pilot program in a single practice area offers low-risk testing before broader adoption.
The shift represents more than pricing change—it’s a fundamental reimagining of attorney-client relationships from transactional interactions to genuine partnerships focused on results.
For legal departments still managing work through hourly rates with unclear boundaries, the message is simple: scope it, price it, measure it. That’s where real value and partnership begin.
Read more: Above the Law
