Alliance articles

What Gets Me Going

John McLaren-Stewart
Alliance Insurance Management Ltd

Professional services companies – let's face it, you can't run a successful business without them, but what really 'gets me going' is the one thing they all seem to have in common – the crass way they structure their fee charging.

I have a close affinity with this topic, after all we are risk consultants and we charge our customer's fees. So who am I to moan? However, I suspect that in the vast majority of cases, professional service fees are made up after a get together of fee earners behind closed doors in a dark dusty room, scanned for listening devices, in the basement of the building. It's a murky, grey area that most consultants....lawyers, accountants, PR agencies etc....want to remain that way.

Some professional service firms charge "by the hour". Although in most cases they are happy to provide timesheets, they are in effect meaningless since I can't possibly know how long it would take them to undertake any specific task. Take for example a question I asked a professional services company about the general process for converting to a plc; I would expect a professional services firm to have this information to hand, they are knowledgeable, this is their game, it's a straightforward initial question and they must have been asked this before by clients. However, I was charged for 2 hours work for them to "research" this, prepare a note and send the email. How do I know they spent 2 hours on it? How do I know if it was the partner attending to it or a junior? How do I know they didn't just copy the information from somewhere else and send it to me?

Let's consider another area. PR agencies or Health & Safety advisors (excluding us of course!), they generally charge a flat fee plus travel costs plus incidentals plus subsistence. What?! This means I have to pay them to come and see me to talk to me about how they will spend my money...I must be nuts?!

When I ask for a quote I would much prefer to be told the whole cost upfront not just the fees so that when the invoice comes its 50% more than I was expecting. Surely, consultants should appreciate their own self-worth enough to be able to charge slightly higher fees that incorporate all these extras or is it just another way of extracting money from their clients?

Why do I feel this is a suspicious world? I guess its experience, I guess its insecurity, I guess it may be my Scottish "look after the pennies" heritage! In reality I don't object to paying consultants when they clearly add value to my business but give it to me straight, don't hide behind meaningless timesheets and petty expense claims.

Reproduced with kind permission of Business 550.