What’s so great about value-based billing? Nothing. Or at least nothing is great about the way many use the term and apply the concept, because the “V” in value-based billing is often missing.
If you’re a law firm partner, and you use the term “value-based billing arrangement” to refer to that flat fee deal you offer clients in which you calculate the standard value of time, at standard hourly rates, based on traditional staffing models and levels of effort, assuming not quite the worst case in terms of contingencies but certainly pricing in enough cushion so that it’s extremely unlikely that your realization will be anything below 95 percent ... there’s nothing great about that. Sure, your client gets billing certainty — at least until you come asking for relief when the one thing you did not factor in happens, and you point out, “Who could have predicted that?”