A couple of days ago I commented on a WSJ article on how the recession was forcing companies to examine new ways to manage their professional services. The article in question was focused on legal fees.
My post has prompted my good friend Steve Swann to comment on the issue as well. Steve has looked at this from the aspect of the need to provide value.
If a better understanding of value results between client and provider that is a good thing.
I think though that we all need to look at what outcomes we are seeking and clarify these. The question of value becomes very subjective at times. In some circumstances and from some perspectives value billing may be seen as profiteering, though the question of risk needs to be weighed in the balnce as well.
Fixed fees/cappd fees may sometimes disadvantage both provider and client. Especially where client buying power has been used to drive down costs.
I think we will see a greater trend away from the ‘pure’ billable hour, but whether in a few years people are ‘happier’ with alternatives remains to be seen.
One of Steve’s points and with which I am fully in accord is the need to clearly articulate a value proposition.