VeraSage

Tom "Bald Dog" Varjan

Brilliant video, Ed. Thanks.

The clash between Stowe and Martin is interesting. Stowe seems to be obsessed with time and how many hours of manual labour he performs.

The other issue is that clients value us more when they physically see us work. I think these clients are missing the point. The “client sees me work” is a lunacy. Martin solved a big problem in five minutes under the shower.

Martin had the solution under the shower, but it was the result of two weeks of seemingly worthless pondering.

As Richard Koch points out in his book, The 80/20 Principle, “In order to do the 20% of work (thought in the shower) that produces 80% of results, we still have to do the other 80% of work (2 weeks of pondering).”

Martin is on the right track: Unlimited access and flat fee.

Dennis had a very good point: “I have a very very specific experience no one else has.” And we all have pieces of unique experience.

I agree with Stowe on the personal relationships, that is, we care about each other beyond the scope and the fee of the project.

It seems to me that Stowe doesn’t want to take any risk in his work, and therefore insists on time-based pricing.

I loved Dennis’s point: I explain my fee and this is my negotiation.

Again, thanks for the great post.

Brenda Richter, CPA

Great video Ed.  Thanks for keeping an eye out for these types of resources.  I had to watch the introduction a couple of times to get everyone’s name straight, but just to be sure I get it right - YEAH for the young dude who looks like the guy from Criminal Minds.

While I was watching the video, I couldn’t help but wonder why the planning committee for the California Young Emerging Professionals conference can’t get their heads out of that shady place and come up with topics like this.

Ed Kless

@Bald-Dog - Well said. My biggest problem is that he was filling young skulls full of mush with this crap.

@Brenda - I doublt it, but if they do, I hope the have Ron Baker or Chris Marston speak.

Richard Muscio

That was something.  Here is my shower story:
Back in 1998 when we were still billing time
I figured it out in the shower and I saved a client $ 40,000 in an audit.  So I put 27.25
hours on my timesheet the next day so I could
bill around $ 6,000.  My billing person said I could not do that because there are only
24 hours in the day:  I reminded her who signed her paychecks.  In any case, the client sent us $ 8,000 with a really nice note pointing out that we did not bill him
enough!

Ed Kless

@Richard - I am glad to hear you have moved past billing for time. You story indicates another of the problems with the ABH. It could cause good people to comment bad acts. I think you were well within you rights to charge the customer, but the price should have been set upfront or a TIP clause should have been used.

IMHO, value write-up on time-based fee could be construed as fraud. A price plus a TIP clause resolves this issue.