I charge by the hour and will never change. It forces the customer to focus on getting the requirements right instead of hand waving it like "oh yeah, that's just what I want" and then come back later "I didn't want that, what I meant was" repeat ad infinitum. You see they are paying for my time, not results. If they choose to waste it... doesn't matter to me, it's all billable just the same. I will do my best to ste…
This is an issue that the article does not address, and it should. Part of the business risk that the article is talking about is the risk of ill-specified requirements from the client. But that means that any flat-rate pricing has to price in the extra time and effort required to make sure the requirements are well specified (and that's true even if a fair amount of that time and effort happens before a contract is signed--you still need to recoup those costs somehow). Either that or you simply have to not take on clients who can't specify their requirements well enough up front.
> consider their motive
I agree, this is always a good thing to do.