Fixed Fees' Underscoping Problem

Mathew explains why flat fees struggle due to under‑ and over‑scoping and the appeal of subscriptions.

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Episode notes

In this episode, Steve Fretzin and Mathew Kerbis discuss:

AI’s impact on billable work
Recognizing the limits of hourly and flat fees
Using subscriptions to create stability and scale
Positioning lawyers for long-term resilience

Key Takeaways:

AI is set to automate most billable legal tasks, collapsing the hours firms rely on for revenue. Continuing to bill time while effort shrinks creates ethical and financial strain. The profession must rethink pricing before the model breaks entirely.
Hourly billing punishes efficiency and leaves clients unable to budget. Flat fees help, but often trigger resistance when AI makes work appear “too easy.” Both models strain under faster, AI-driven workflows.
Subscription pricing offers predictable costs for clients and recurring value for firms. Changing needs are handled through tier shifts instead of constant renegotiation. This approach opens access to the vast unmet legal market.
Solo and small firms can thrive by pairing subscriptions with purpose-built AI tools. Clear value mapping enables strong good-better-best service tiers. Sustainable growth requires leverage, focus, and letting go of doing everything alone.

"The flat fee or fixed fee model… hasn’t supplanted the billable hour… because of exactly this problem I call the under‑scoping and over‑scoping problem. You don't know if you're going to overscope or underscope the work when it's on a fixed‑fee model." — Mathew Kerbis

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About Mathew Kerbis: Mathew Kerbis is the founder of Subscription Attorney LLC and co-founder of practi.ai, where he helps lawyers move beyond the billable hour and build sustainable, client-friendly practices. A longtime advocate for subscription-based legal services, Mathew pioneered one of the earliest low-cost legal subscription models and has since expanded into fractional general counsel work for small businesses. He also hosts the Law Subscribed podcast, where he explores alternative fee models, legal innovation, and the future of law in an AI-driven world.

Connect with Mathew Kerbis:

Website: https://www.practi.ai/

LinkedIn: https://www.linkedin.com/in/kerbisverse/

Connect with Steve Fretzin:

LinkedIn: Steve Fretzin

Twitter: @stevefretzin

Instagram: @fretzinsteve

Facebook: Fretzin, Inc.

Website: Fretzin.com

Email: Steve@Fretzin.com

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