Fixed-fee consulting is not complicated in principle. You agree on a scope, you agree on a price, and the price does not change when the work is done. In practice, it requires a level of upfront precision that most consulting engagements skip. That precision is, in our view, the most valuable part of the model.
How the Fee Is Calculated ¶
We estimate the number of consultant days required to complete the defined scope, apply our day rate, and add a complexity buffer. The buffer is typically 10 to 15% of the base estimate. We present a single number. If the work takes longer than estimated, we absorb the difference. If it takes less time, the fee does not change. The number in the proposal is the number on the invoice.
What the Scoping Process Requires ¶
Fixed-fee pricing only works if the scope is defined precisely before the contract is signed. This means agreeing on which workflows are in scope, which staff will be interviewed, what the deliverable looks like, and what is explicitly out of scope. The scoping conversation typically takes two to three hours. Clients who have been through it often describe it as the most useful conversation they have had about the project, because it forces them to articulate what they actually need.
The Risk Allocation ¶
Under hourly billing, the risk of underestimating complexity sits with the client. Under fixed-fee billing, it sits with the consultant. This is the correct allocation of risk. The consultant is the expert in estimating how long consulting work takes. The client is not. Placing the risk with the party best positioned to manage it produces better outcomes for both sides.
When Fixed Fees Do Not Work ¶
Fixed fees are not appropriate for every type of engagement. Open-ended advisory relationships, where the scope evolves week by week, do not lend themselves to fixed pricing. Our Board Advisory Retainer uses a monthly fee with a defined scope per month, which is a different structure. For project-based work with a defined deliverable, fixed fees are almost always the better model.
All Amplitude One project engagements are fixed-fee. If you want to understand how a fee would be calculated for your specific situation, the Rapid Diagnostic Call is the right starting point.