I am sure most people reading this will have come across situations where they have received unexpected time based bills from their professional advisors – lawyers, accountants and even CSPs.
One reason for this is that professional services businesses have a habit of setting their staff minimum time billing targets – actually it’s called a target but this is really a requirement.
Usually these are 6 to 8 chargeable hours a day for chargeable staff member, but I have come across situations where the daily time billing target actually exceeds the number of hours worked – so staff are required to bill 9 hours to clients out of an 8-hour day!
This automatically forces staff to bill as much time against your engagement as they can ‘get away with’ in other words time spent (usually) isn’t really time actually spent at all.
At best this isn’t really fair.
We are acutely aware that this is problem for clients engaging Corporate Service Providers and Professional trustees. In our experience, the number one reason stated by clients moving their business from one administrator to another is unreasonable fees; all too often this is related to time charges.
This is why Middleton Katz has made the following commitments with respect to time charges:
Billing targets for staff. We don’t set our staff billing targets – ever. They are under no pressure to find any particular number of billable hours each day. The billable hours recorded reflect the time spent – it’s as simple as that.
Fees for raising bills. We don’t charge our clients for raising bills or arranging to pay bills from client funds under our control. Charging for this, although it is industry practice, just seems wrong to us.
Correcting our own errors. We put a lot of effort into getting things right first time and by and large we succeed. However, on the odd occasion when something goes wrong, we take responsibility for that and put it right on our own time at no cost to the client.
Careful review of time charges. We never issue a bill without a careful internal review of any time charged before it is sent out. We believe our clients should be able to rely on the bills we issue without question and without exception.
Total transparency as a routine. As a matter of course, we provide our clients with detailed time records down to the lowest level of detail with every time charged invoice that we issue. We believe our clients should have the opportunity to see how we justify our charges without having to ask us.
Finally, and most importantly, we are sensitive to billing issues so we endeavour to avoid nasty surprises for our clients.
Fee disagreements are no fun for us and bad for business. If we are going to surprise a client with our fees we would much rather it was because they represent outstanding value for money.