Seth Godin steps into the time vs value billing debate

Seth Godin is renowned for his pithy and thought provoking blog posts and books.  His most recent post is a new (to me) way of looking at the age-old ‘time vs value based’ billing argument:

“Long work is what the lawyer who bills 14 hours a day filling in forms does.

Hard work is what the insightful litigator does when she synthesizes four disparate ideas and comes up with an argument that wins the case–in less than five minutes.

Long work has a storied history. Farmers, hunters, factory workers… Always there was long work required to succeed. For generations, there was a huge benefit that came to those with the stamina and fortitude to do long work.

Hard work is frightening. We shy away from hard work because inherent in hard work is risk. Hard work is hard because you might fail. You can’t fail at long work, you merely show up. You fail at hard work when you don’t make an emotional connection, or when you don’t solve the problem or when you hesitate.

I think it’s worth noting that long work often sets the stage for hard work. If you show up enough and practice enough and learn enough, it’s more likely you will find yourself in a position to do hard work.

It seems, though that no matter how much long work you do, you won’t produce the benefits of hard work unless you are willing to leap.”

You may not record 14 hour billable days. But if you focus on how much billable time you can record on your timesheet each day you are of the same mindset.

I would suggest that Hard work, in this context, is the application of knowledge, skills and experience to solve problems and to provide valuable advice – without the need for detailed research or long advisory letters. I would stress though that it should be genuine and not guess-work or risky half baked ideas that would have benefitted from proper research.

Hard work requires discussion over the value to the client. It also means the adviser has to decide whether the agreed fee will provide sufficient reward. Sufficient to cover not just the time but also to contribute to the build up of knowledge skills and experience which put the adviser in a position to provide the advice. Thinking that all through, having the discussions and accepting the outcome is Hard work.  But it can pay very well as a result.

Do you focus on Long work or do you have a way to get paid a fair fee for doing the Hard work?

By |2011-05-04T09:15:03+00:00May 4th, 2011|Pricing|

About the Author:

Mark Lee FCA is an accountancy focused futurist, influencer, speaker, mentor, author and debunker.

2 Comments

  1. Colin Dunn 4th May 2011 at 11:58 am - Reply

    Great analysis, Mark. Seth’s distinctions are sound and all professionals need to assimilate the information and figure out how it applies. The only way for a professional to be fairly compensated for ‘hard work’ is to have a value based discussion with the client BEFORE starting the work and agree on a price upfront.

    That price can be phased if you don’t know the full scope upfront. I had just this discussion with an accountant today and he went away and agreed an upfront fee to scope a due diligence job with agreement to a further upfront fee once the scope and value to the client is agreed upon.

  2. Antony Doggwiler 6th May 2011 at 11:15 am - Reply

    I think the time/value equation is going to be the biggest challenge to time based professional services businesses. Providers will have become smarter when pricing jobs. Equally clients will need to be focused on value more than cost. Co-incidentally I have recently blogged on this issue http://antonydoggwiler.blogspot.com/2011/05/real-value-of-time.html

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