Wilson Sonsini Goodrich & Rosati is planning to offer legal advice to startup clients for a flat fee, another example of the novel billing arrangements sweeping the law business.

The Palo Alto, California-based firm, an icon in the Silicon Valley tech community, bills most of its clients at an hourly rate in the hundreds of dollars per hour. Thus, the total bill goes up if a matter takes a long time to conclude.

Now, the 650-attorney firm has begun discussing how it can offer its large base of startup clients a set of services at one price. That would give those clients more certainty—but not necessarily a discount—on the final bill.

Details of the service, such as price and what services will be included, are still under discussion.

Wilson Sonsini attorneys began contemplating the offering many months ago. Wilson Sonsini, like many large law firms, said clients increasingly are asking for so-called alternative-fee arrangements.

“It’s very much a topic out there,” said Steven Bochner, Wilson Sonsini’s CEO and a partner at the Palo Alto-based firm. “Clients more and more these days are saying, ‘Hey, I’d really like to understand what this is going to cost, and can you give this to me on a flat-fee basis?’ You (as a law firm) have to be receptive and flexible to meet the client needs.”

Wilson Sonsini is not the first law firm to offer flat-rate fees to clients. But given the firm’s status, it suggests that large law firms’ control over fees is eroding.

“In simple language, it’s a buyer’s market,” said Jeff Brand, dean at the University of San Francisco Law School.

The billing power shift was propelled by the Great Recession. With corporate budgets under pressure starting in 2008, law firms could not impose price increases as they had during boom years. Firms had little recourse other than to find new billing agreements with clients.

“If Wilson Sonsini is making this shift, it’s huge,” Brand said. “This is not some marginal player. Clients flock to them.”

Some other firms have used flat-fee billing with clients. Fenwick & West LLP, another Silicon Valley firm, has a long-standing agreement with Cisco Systems Inc. to handle that company’s mergers and acquisitions for a set price.

Orrick Herrington & Sutcliffe LLP has agreed to do all the legal work for San Francisco’s Levi Strauss & Co. for a flat fee, the broadest alternative-fee arrangement for the major San Francisco-based law firm.

Even as law firms may no longer control discussions about billing, there is some reason for optimism among lawyers in 2010. In Silicon Valley, Bochner said, business conditions are more favorable than a year ago.

“It does feel like we’ve turned a corner,” he said. Bochner said his optimistic view is backed by a number of indicators: large corporate clients giving improved earnings outlooks, more IPO registrations, and increased optimism among venture capitalists.

The economy is still fragile, he said, because of the high unemployment rate and uneven business outlook.

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Eric Young is a reporter for the San Francisco Business Times.