We moved off hourly billing at the end of last year. Here’s the reasoning we worked through.
The problem with hourly
Hourly billing is legible to clients and creates predictable cash flow. But it has a structural flaw: it prices our time rather than our judgment.
The most valuable thing we do — the calibration meeting where a client’s frame shifts, the realization in week two that the brief was wrong, the single conversation that unlocks six weeks of better work — takes the same amount of time as a task that produces nothing useful.
Hourly billing collapses the distinction between time-and-thinking and time-and-execution. For a studio that trades primarily in thinking, this creates a systematic underprice.
What we moved to
Project pricing with clearly defined scopes and deliverables. Each project has a fixed fee that corresponds to the outcome, not the hours required to produce it.
This forces us to have better conversations upfront about what success looks like. It also creates an incentive alignment problem worth naming: we now have an incentive to work efficiently, which occasionally means delivering faster than the client expected. We’ve found that clients respond well to this — but it requires framing.
What we learned
The first three project-priced engagements were cleaner on both sides. The contracts were harder to write (scoping is genuinely difficult), but the projects ran without the hourly tracking overhead and the relationship felt less transactional.
One failure: we under-scoped a discovery phase and absorbed two extra weeks. The lesson wasn’t to add buffer — it was to charge separately for discovery before committing to a production scope.