Wow, lots of responses, so I should give an update!
I decided to go with the $5k offer (with the money back guarantee). This thread has played no small part in that decision - so thanks everyone who chimed it with their opinions, it was very useful to hear all sides of the argument. My conclusion in the end was that by preparing my own application I would probably spend significantly more time, and would probably spend a lot more time just generally being stressed out about it because I would be the only person with the responsibility to check my application. My probability of success would probably still be pretty good I think, but certainly not close to the 99.6% claimed by the law firm.
Shop around for quality, check references, but don't shop around for price below this price point, because you are already at the lowest end I know of for quality. I have half a dozen law school classmates I think are fairly dim who opened up solo law firms and said they were immigration attorneys; they have no clue what they were doing, and would have charged you $5k easy. If you have a good lawyer for $5k, do it.
I did a limited amount of additional shopping around, and found some other reputable law firms, but the impression that I got from my research was that the $5k law firm I had found initially are considered to be one of the best in the industry. Many people said this on forums on the topic, and I also had a personal recommendation for this firm from a friend who went through the process with them and said they were great (although he is a very famous researcher who just got a chaired faculty position at a top-5 US university, so it would be hard to screw up his green card application). Honestly, the most suspicious thing about this law firm was that I couldn't find anything bad about them! They do hundreds of applications per month and all I could find were glowing reviews of there services.
OP, let's say you don't get a visa and have to go back to Ireland for even one single year while you wait to do it again (and as you note, your chances will be worse next time because you have a ding on your record). Will you make $5k less than you would in the U.S. for that year? If so, pay the money; it's an easy choice.
This is a good question. Certainly I would be paid less than I am now, but I am in a postdoc position and don't even know which country I will be in after this position. My field is very specialized and there are a few groups scattered across the world that I would be happy to work in for my next postdoc before applying for permanent positions. There is a good chance (maybe 50%) that even with a green card, I wouldn't stay in the US for my next job. However, if I do stay in the US, a green card will open up opportunities for me and will make things easier for sure, particularly if I end up looking for positions in research outside of academia.
Is the whole thing refundable or just the billed hours?
The law firm will refund the money I spend on them - which is a flat $5k fee (irrespective of how much or little time they spend on my case). I will not be refunded the $2k that I will spend on application fees which go to the government and presumably pay the salaries of the people who assess the applications etc.
Plus there is something about a document when it is the letterhead when of a good law firm vs what is prepared by you. Even though your application may have been better prepared by yourself, the lawyer's letterhead will have tend to have a greater weight.
This is a bit like something my parents said, which I thought couldn't really make much impact to a well trained professional, but maybe it does. They said that by a lawyer saying things in third person "he has demonstrated he is exceptional by..." as opposed to me saying things like "I have shown I am exceptional by..." it sounds much more convincing (not to mention less boastful).
So overall, I think I am happy with the decision to go with the lawyer. I guess being in a financial position to pay for something like this without it making much difference to my day to day life is why mustachianism appeals to me.
Thanks all for your help! I will try to remember to update when the process is all through (it could be about a year...)!