Monthly Archives: June 2009

How to Save the Legal Profession (Episode 34)

Click Here for entire series table of contents

© Alan Weiss 2009. All rights reserved.

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Posted in The Movies: The Writing on the Wall | 2 Comments

Don’t Look Now V

Here is a sample of areas in the economy currently hiring at a healthy rate:

Retail
Health Care
Professional Business Services
Financial
Insurance
Hotel and Hospitality
Food Services

There are tens of thousands of organizations and firms in those areas which can constitute your prospects. What are you doing to attract them to you?

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Sudden Death

You never know when your times comes. We are not here to stick our toes in the water, we are here to make waves. Listen to Alan’s fascinating story and his own close encounter.

and now also on iTunes

Click Here for entire podcast series table of contents

© Alan Weiss 2009. All rights reserved.

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Posted in Podcast Series: The Way I See It | 3 Comments

Shameless Promotion

I have a space for two people in a four-person Shameless Promotion Workshop, which will be my third one:
http://summitconsulting.com/seminars/shameless_promotion.php

Send me an email (alan@summitconsulting.com) if you’re interested, or just sign up at that address. The two-days will be scheduled at mutual convenience. The fee includes lodging, gourmet meals and wine, and local transportation.

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Don’t Look Now IV

From today’s New York Times, “Despite Recession, High Demand for Skilled Labor,” by Louis Uchitelle, an excerpt:

Some jobs need qualified help:

“Welder is one, employers report. Critical care nurse is another. Electrical lineman is yet another, particularly those skilled in stringing high-voltage wires across the landscape. Special education teachers are in demand. So are geotechnical engineers, trained in geology as well as engineering, a combination sought for oil field work. Respiratory therapists, who help the ill breathe, are not easily found, at least not by the Permanente Medical Group, which employs more than 30,000 health professionals. And with infrastructure spending now on the rise, civil engineers are in demand to supervise the work.”

As consultants, you have to find the demand. There are segments doing well. As an experienced consultant, you can make that “perfect weld” that most can’t. Find the business and make it your prospect.

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New Book Signing

Josh Leibner, Gershon Mader, and Alan at their book signing in the Campbell Apartments at Grand Central Station in New York, for “The Power of Strategic Commitment: Achieving Extraordinary Results Through TOTAL Alignment and Engagement”

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The Case for Value Based Fees in “Stubborn” Professions

This is an article I published recently in Rob Nixon’s “Proactive,” June 2009, in Australia (info@RobNixon.com).

The Case for Value Based Fees
In the “Stubborn” Professions

Alan Weiss

Value-based fees are becoming increasingly popular with consultants, since I pioneered the movement in the early 90s with the publication of Million Dollar Consulting, now in its fourth edition, and reinforced with Value Based Fees a few years ago, now in its second edition.
A “value-based fee” is a fee that is based on your contribution to the results the client achieves. Specifically, when asked about the basis for fees, I reply, “My fee is based on my contribution to the value you’ve stipulated you’ll be receiving, providing an excellent ROI for you and equitable compensation for me.”
That’s how partners treat each other.

Why doesn’t everyone see the light?

If you leave $50,000 “on the table” each year because you’ve failed to charge that equitable compensation, in ten years you’re a half-million dollars poorer, and that is revenue you will never, ever recapture. If that number is $100,000, then you’re a million dollars poorer.
Moreover, billing based on hours, days, or any time unit is inherently unethical because it is in conflict with the client: The client is best served when issues are resolved and improved quickly, but the service provider is best served when the time involved is lengthy. Solving a problem or improving a condition in a half-day is extraordinarily valuable for the client, but impoverishes the service provider who is billing by the time unit.
Time-based billing is based on the inherently ridiculous notion that one’s time is valuable. Consequently, an attorney diligently tracks every six minutes (which, in turn, takes another minute!) as if that time looking up an address or reading a letter is as important as the time convincing a jury or achieving a settlement.
In the US in the past year, the average attorney was earning less than $100,000. That’s after four years of undergraduate school, three years of law school, and the appropriate start-up, and with a ton of debt. (The average general practice physician was earning $125,000, and the average surgeon—non specialist—was earning about $200,000. These are not extraordinary salaries by current standards. I earn seven figures as an independent consultant working out of my home 20 hours a week.)
Why is it that all service providers don’t move toward more lucrative and equitable fee standards?

Origins and self-worth

One problem is that the origins of accounting firms (and many consultancies grow out of accounting operations) are based on hourly charges. Partners have fought their way up through that structure, and are not about to change it once they are in the corner office or sharing in major bonuses.
But what stops smaller, boutique shops or even solo practitioners? I’ve observed that it’s usually a function of poor self-worth. When you don’t consider yourself a peer of the buyer and you don’t establish a relationship of equals, then you tend to rely on less personal representations of worth: methodology, hours, materials, reports. The problem is that everyone does that, so it makes you a commodity subject to tremendous price pressure.
After all, if you’re going to audit my books, and so is she, then why shouldn’t I simply find the cheapest hourly rate? When things are reduced to a commodity, we lose sight that all service providers aren’t equal. Take the attorneys: Some charge much more by the hour because they have better reputations, win more cases, went to better schools, have more support. Yet they simply raise the hourly rate rather than charge based on results. (With the exception of contingency fees, where attorneys try to circumvent the limited hourly billing by taking a “piece of the legal action.”)
Accountancies and accountants bring varying value and can differentiate themselves from the competition IF they take the time to establish peer-level relationships AND charge based on their differentiated value, not the same hour that everyone else is using.

What to do?

Take a tough look at your practice. Understand the potential value you uniquely possess, and then help the client or prospect to understand the value of meeting the objectives the two of you will work to achieve. Treat every new client this way, and try to transition every existing high-potential client, by providing more perceived value (e.g., proactive intervention, unlimited access, etc.).
You’ll find that you’re able to provide dramatic results, with less labor intensity, with no “meter running,” and with far greater profitability. And you’ll no longer be in potential ethical conflicts with your own clients.
Believe me, that’s worth more than an hour of your time.

Alan Weiss, PhD has visited Australia 14 times among his 57 countries, and has the strongest independent consulting brand in the world. He has authored 32 books appearing in 9 languages. You can find his work on http://www.contrarianconsulting.com or http://www.summitconsulting.com, and you can follow him on Twitter: http://twitter.com/BentleyGTCSpeed.

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Alan’s 6-pound Father’s Day lobster

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Posted in The Best of Life | 8 Comments

Don’t Look Now III

We’re just about at mid-year, and the market is up by 40%.

A lawyer was whining to me at a board meeting a couple of months ago that the Dow had fallen by 50% from its high point, and would have to gain by 100% to reach its former levels. I’m no mathematician, but if we gained 40% for this entire year, and another 40% next year, gee, that’s back to where we were.

There will be more turmoil, housing certainly looks grim, but there is a LOT of opportunity out there. I was listening to two network financial experts this morning speculating that stocks were following the bond market. They have NO idea. (Even Koufax was moaning.) Find organizations doing well which want to do still better, and provide them with value. Don’t let the gloom and doom, “poverty mentality” types get you down.

If there are consultants doing what you do and succeeding, then the problem is NOT the economy, technology, society, or Bill Maher (well, it could be Bill Maher): It’s YOU.

© Alan Weiss 2009. All rights reserved.

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Anchors Aweigh (Go Navy)!

Received a call from a Captain Mike Sherlock today, who is deputy director of the strategic research department at the Naval War College in Newport. He said he had been sent my blog entry (“Sir, No Sir!”) and wanted to apologize for the behavior of the colonel. He said that this was an aberration, and not how the vast majority of the attendees acted.

I agreed, and told him that of 1,000 people present, there were likely to be a couple of behavioral problems, and I had had the misfortune of meeting one. And, as I had written, I respect anyone who puts on a uniform for his or her country and moves into harm’s way to protect us.

Captain Sherlock offered a tour of the Naval War College for me to get a better impression of what they do and who they are and, when I mentioned that I was an informal student of Naval history, said he’d arrange some terrific experiences.

I want to keep the playing field even: That was one hell of a speedy and effective response from the Navy, and the colonel might just have done us all a great favor.

And isn’t it interesting who reads blogs? It pays to be the King of Social Media….

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Posted in The Best of Life | 3 Comments