3 Reasons Why Hourly Fees Cheat Clients
by Leif H. Smith, Psy.D.
- Hourly fees benefit the consultant rather than the client. If you are paying a consultant by the hour, what is his or her impetus to get the job done quickly and in the most effective manner possible?
- When you pay a consultant on a project, value-based fee, you will always understand upfront what your cost investment is. This minimizes ongoing expenditures (travel, supplies, etc) and makes for simplified record keeping. And less headaches for the accounting department.
- Hourly fees guarantee that you will be locked in an ongoing battle to reduce consultant time spent on-site, which contradicts what your consultant should be doing, which is making certain that he or she is on-site as much as is prescribed in order to meet the contracted objectives.
Thus, project fees, whereby a consultant quotes fees upfront, almost always set the consulting relationship up as a win/win scenario. No more worries about getting the job done quickly (it is in the best interest of the consultant to do so, since he or she has already received full payment), no more worries about ongoing nickle-and-dime fees, and no more arguments over milking the clock. The bottom line for the client, however, is that project fees provide for an easier, more cost-efficient manner in which to do business with consulting firms.
So, the next time you are quoted an hourly fee by a consultant, walk away. Or run. When hourly fee levels determine your choice of consultant, you're headed for trouble. Focus instead on the value that each potential consultant brings to the table with regards to measurable results for your company.
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