Value-Based Fees: How to Charge—and Get—What You're Worth: A Guide for Consultants, Second Edition

Chapter 2. The Lunacy of Time-and-Materials Models: Who Wants to Be as Dumb as a Lawyer?

Historically, consultants have billed for their services on the basis of time units, usually hourly rates or per diem assessments. There is no logical reason for doing so, but the underlying reasons seem to have included the following:

• Other professionals had set a precedent, most notably lawyers and accountants, both of whom preceded consultants on the business stage.^[] (Architects, designers, and other professionals also charge in this manner.) Recently, some New York attorneys made headlines by moving rates to $1,000 per hour, which they readily conceded they didn't expect anyone to pay.

  ^[] 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.

• Most of the conventional working trades—plumbers, electricians, carpenters, and the like—have placed a premium on their time.

• Time is the universal objective, in that the client and the consultant can agree on the length of an hour or a day. (Of course, how much of that duration is spent on qualitative work is another matter entirely.)

• Consultants have had a ready-made lever for increasing their business by merely increasing their ...