Charge-out rates 

When a Lawyer moves out of a law firm and into legal consulting one of the more daunting tasks is to set one\'s charge-out rates.
 
Charge-out rates influence profitability, client relationships, and sustainability.
 
Understanding charge-out rates helps you position yourself in the market in a competitive position.Transitioning from a law firm to legal consulting brings new freedom-and new challenges, especially when it comes to pricing your services.

Unlike the relatively structured environment of law firms, consultants must set their own rates, structure engagements, and justify value to clients. 

We have prepared a guide, with global context, practice area differences, and critical considerations, just for our Umbiie members.

Common Legal Consulting Fee Structures

Legal consultants, like lawyers, can choose from several billing models, each with its own advantages and suitability depending on the type of work and client expectations:

• Hourly Rate: The most traditional model. Consultants charge for each hour worked, often with different rates for varying tasks or levels of expertise.
  
  
• Flat/Fixed Fee: A single, upfront fee for a defined service or project-ideal for routine or predictable work (e.g., drafting contracts, compliance reviews).
  
  
• Retainer: The client pays a set amount (monthly or per project) for ongoing access to services. This can be based on anticipated hours or a bundle of services.
  
  
• Contingency Fee: Rare in consulting (and often prohibited outside litigation), but sometimes used for regulatory or claims-based work where payment is tied to a specific outcome.
  
  
• Value-Based or Outcome-Based Pricing: Fees are linked to the value delivered or results achieved, rather than time spent.
  
  
• Hybrid Models: Combining elements, such as a flat fee for defined deliverables plus an hourly rate for additional work.
  
  

Global Fee Ranges and Country Differences

Consulting fees vary widely by country, reflecting differences in legal systems, cost of living, and market expectations:

• Experience matters: Senior consultants and recognised experts can command rates at the top end of these ranges
  
  
• Practice area matters: Complex or niche areas (e.g., IP, regulatory, cross-border M&A) attract higher fees
  
  

Practice Area Differences

Fee levels and structures vary by specialisation:

• Corporate/M&A: Often project-based or hourly, with high rates for complex transactions.
  
  
• Intellectual Property: High hourly rates (e.g., R3,000/hour in South Africa), with flat fees for filings or opinions.
  
  
• Litigation Support/Dispute Resolution: May use a mix of hourly, flat, or stage-based fees; contingency is rare and regulated.
  
  
• Compliance/Regulatory: Often retainer or project-based, reflecting ongoing advisory needs.
  
  
• Employment, Family, or Estate Law: More likely to use flat or capped fees for defined tasks.

Key Factors to Consider When Setting Fees

1. Market Research - Benchmark against other consultants and firms in your region and practice area. Consider the client’s size, sector, and ability to pay.
2. Your Experience and Reputation - Seniority, specialisation, and track record justify higher rates
3. Complexity and Urgency - More complex or urgent matters command higher fees
4. Scope and Deliverables - Define exactly what is included (and excluded) in your fee. For flat fees, be clear about what triggers additional charges.
5. Value to the Client - Consider the client’s potential gain, risk mitigation, or cost savings from your advice.
6. Local Regulations and Ethics - Some jurisdictions have statutory fee caps or require “reasonableness” in legal fees. Avoid “overreaching”-excessive fees can damage reputation and may be challenged in court
7. Transparency and Communication - Provide written fee agreements, outlining structure, payment terms, and billing practice
8. Review and Adjust Regularly - Reassess your rates annually or when market conditions change.

Examples of Fee Structures

Practical Tips for New Legal Consultants

• Start with a clear scope: Define what’s included, and be explicit about “out of scope” work.
  
  
• Offer options: Present clients with a menu of fee structures (hourly, flat, retainer) to suit their needs
  
  
• Track your time: Even for flat-fee work, track hours to ensure profitability and inform future pricing.
  
  
• Build in review points: For longer projects, set milestones to review scope and fees.
  
  
• Don’t underprice: Resist the temptation to compete solely on price; focus on value, expertise, and client outcomes.
  
  

Ethical and Practical Implications

• Reasonableness: Fees must be reasonable, reflecting the work’s complexity, your expertise, and local norms
  
  
• Transparency: Clear, upfront communication prevents disputes and builds trust
  
  
• Access to Justice: Excessive fees can undermine public trust and may be subject to regulatory scrutiny
  
  
• Regulatory Compliance: Always check local rules on fee arrangements, especially for contingency or referral fees

Setting consulting fees as a lawyer-turned-consultant is both art and science. Benchmark widely, consider your value and your time, tailor your approach to the client and matter, and always document your arrangements.

As legal markets globalise and clients demand more value and predictability, flexible, transparent, and fair pricing is not just best practice-it’s essential for success.





Other considerations when transferring to Consultancy:

The research is right there online for you to see, it appears to be no escaping the dramatic changes we are seeing, and will continue to see, in the legal employment sector:

• Lawtrades state that by 2027, 50% of all Attorneys will be working for themselves in fractional work.
• LexisNexis stated that by 2026, 33% of Attorneys in the UK will be working in the same way.
• GRM Intelligence’s research shows it\'s likely to be as high as 70%, globally by 2035.

What does this mean for you?

It means less opportunity for formal employment, and more likely lawyers will be working for themselves, by themselves, on a project-by-project basis.

So how can you best prepare yourself, if this is the direction your legal career takes? Transitioning from a law firm to working as a legal consultant or fractional worker can be a rewarding but challenging endeavour.

Here are the top tips for lawyers making this move, focusing on client acquisition, marketing strategies, project sourcing, and maximising income:

1. Join Umbiie.com

Umbiie is an independent platform, where you stay anonymous and paying clients will find you based on your skills and experience, removing any potential bias from the process. This brings international work to those that are able to complete the project.

1. Define Your Niche
Identify and specialise in a specific area of law where you have expertise. This focus will help differentiate you from competitors and make it easier to market your services to a targeted audience.

2. Use Data Analytics
Talk to GRM about how to present your value proposition with the use of data analysis. We have beendeveloping easy-to-use tools for the past decade and these tools enable consultants to win more work.

3. Build a Strong Personal Brand
Create a professional online presence through a well-designed website and active social media profiles. Your branding should reflect your expertise and personality, making it easier for potential clients to connect with you.

4. Leverage Networking
Utilise your existing professional network to spread the word about your new consulting services. Attend industry events, join legal associations, and engage with former colleagues to generate referrals and build relationships.

5. Utilise Content Marketing
Create valuable content that addresses common legal questions or issues in your niche. Blogging, webinars, or videos can position you as a thought leader and attract potential clients searching for information online.

5. Use Social Proof
Showcase testimonials and case studies from past clients to build credibility. Positive reviews can significantly influence potential clients\' decisions, making them more likely to choose your services.

6. Implement SEO Strategies
Optimise your website for search engines to improve visibility. Use relevant keywords related to your practice area and ensure your site is user-friendly to increase traffic and attract potential clients.

7. Develop Strategic Partnerships
Collaborate with other professionals or businesses that complement your services. For example, partnering with financial advisors or accountants can lead to mutual referrals and expand your client base.

8. Set Clear Pricing Structures
Be transparent about your pricing and offer various payment options, such as flat fees or retainer agreements. Clear pricing can help potential clients understand the value of your services and make informed decisions.

9. Focus on Client Relationships
Prioritise building strong relationships with clients by providing exceptional service and maintaining open communication. Satisfied clients are more likely to refer you to others and return for future services, contributing to a steady stream of projects.

By implementing these strategies, lawyers transitioning to consulting can effectively market their services, attract clients, and ensure a successful and profitable practice.