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Conflicts with Client Purchasing Policies

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Alanism: A client should not have to make an investment decision every time the client believes the consultant may be of help.

Most organizations have policies for dealing with “vendors,” and once you quote time-based fees, you will become no less a vendor than the plumber or the computer repair guy.

 In putting yourself in the same category as other hourly vendors, you are asking the client to treat you differently by not requiring a limit on hours or by not adhering to company hourly billing policies. (“We never pay trainers more than $2,500 a day.” “But I'm not a trainer.” “You're in the same category.”)

 A good purchasing manager or vendor coordinator is paid to extract the best possible rates from vendors. Consequently, they will always try to minimize your time rates, and you will be in danger of pitting your corporate buyer against his or her own purchasing function. Their incentive and raison d'être is to reduce your fees.

 If the company accepts billing for hourly units, how do you conscientiously bill for portions of hours or quick phone responses? Do you emulate the legal practice of making everything a fifteen-minute minimum, even if the call takes two minutes? Do you aggregate them and somehow justify them on a time sheet? This is not all that far from fudging the numbers. (If you're doing research that benefits two clients, do you charge them each for the same half-day, or do you prorate it?)

Value-Based Fees

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