Alan Weiss - Value-Based Fees

Offering options—a choices of yeses—moves the buyer psychologically from “Should I do this?” to “ How should I do this?” You've just increased your odds of a high-fee sale by at least 50 percent.

A consultant once asked me, “Aren't we ethically compelled to provide every possible assistance to meet the client's objectives?” Unequivocally no. We must meet the client's objectives. But if the client's objective is, say, “increasing sales closing rates,” then conducting industry-wide benchmarking studies or longitudinal analyses for two years or 360-degree feedback on four levels of management represents value above and beyond merely meeting the objective of “increasing sales closing rates,” for example.

Offer a client various “value packages” that help the buyer ascend the MBS ladder. Over the course of my career, buyers have chosen my least expensive option less than 10 percent of the time and my most expensive option over 35 percent of the time.

How much money are you leaving on the table? If it's $50,000 a year, in 10 years that's half a million dollars that can never be recovered . If it's $100,000 annually, just $10,000 on 10 projects a year, you are going to lose millions.

Supply and demand is for commodities, not consultants. Your supply will always exceed demand, and that tells you something about the inherent stupidity of this bromide.

There are legitimate and obvious ethical reasons not to use time units for billing bases.

Profitability should not be arbitrarily delimited by finite measures of time, materials, deliverables, or costs.

Other professions do it incorrectly. Why would you want to emulate them?

The buyer is educable, and you are the teacher. Don't abdicate that huge responsibility.

The average attorney's income is barely above $100,000 annually. Successful people drive cars that cost more than that. What model are you using as your income paradigm, and what model car are you driving?

1 1. McGraw Hill, 6th edition, 2021.

2 2. The first management consultant was probably Frederick Winslow Taylor, the founder of time and motion studies and the author of Principles of Scientific Management (which wasn't so scientific at all). He worked in the early part of the twentieth century, his oeuvre being published in 1911. The first management conference was held in 1882 by the German Post Office. No one showed up.

3 3. I know there are many of you saying, “Yes, but honorable people wouldn't do that.” Maybe, but honorable people regularly cheat on their taxes, cross the street against the light, and rip off the phone company simply because an opportunity presents itself and the incorrect action is only a brief rationalization away (what's the government done for me lately, there's no traffic that I can see or can't outrun). We need to eliminate temptations that lead to unethical behavior, not expect that everyone will act honorably.

4 4. Of course, major organizations need business plans to show the shareholders that management is fiscally responsible, but they also put out beautiful annual reports that have nothing whatsoever to do with the actual business. No one should manage against a business plan for fear of hitting it and missing untold opportunities.

5 5. https://www1.salary.com/Lawyer-Salary.html

6 6. The American Institute of Architects was a client of mine for several years, and this was perhaps the major concern of the association and the membership.

7 7. One of the funniest skits I've ever seen was a pseudocommercial on the NBC show Saturday Night Live in which Phil Hartman was a pitchman for a bank that only made change, nothing else—no loans, no mortgages, no investments, only change. “I know what you're wondering,” he would deadpan into the camera. “How can we do it? The secret is one word: volume.”

8 8. With the exception of Louisiana, which follows the French.

9 9. https://www.accountingtoday.com/opinion/how-much-do-accountants-and-cpas-really-earn

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