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While many
PR firms accept hourly billing as an acceptable (and
even preferable) practice, the dangers inherent in such
a compensation system outweigh its potential benefits –
to both clients and PR providers. This billing practice
can undermine the perception of a PR firm’s ethics, as
illustrated by recent investigations into charges of
over-billing of the Los Angeles Department of Water and
Power by Fleishman-Hillard. (See
news story) When one of the most respected
companies in the PR industry comes under fire, this
becomes a serious issue that needs to be addressed.
Hourly
billing poses even larger problems than potential abuse.
In such a system, PR firms are rewarded more for the
amount of work they do than for the quality of that
work. No financial incentive exists for quick and
creative solutions. In fact it’s the opposite situation
– a longer and more circuitous route to a solution is
the more “successful” one from a billing standpoint.
Hourly
billing was originally used as a baseline- model –
figure out how much effort goes into a project, then
weigh it against the project’s successful completion.
However, many firms began to see hourly billing as the
“pot of gold” – asking junior employees to bill
increasingly higher amounts until the standard became
almost ludicrous.
When
clock-watching becomes more important than achieving
goals, the system has a fundamental flaw. Under hourly
billing, PR firms believe a phone call is worth 15
minutes of billing, clients are afraid to embark on a
new PR initiative because of anticipated costs, and
accountants believe that minutes are more important than
achievements. They’re all missing the boat.
In reality,
PR is about creativity. If it takes only an hour for a
message to be defined and delivered in an efficient and
creative way, the PR team should be highly rewarded. If
it takes two weeks to deliver a weak message
ineffectively, the firm should be penalized (if not
fired). When you throw the clock out the window and
focus on the project alone, great things can happen.
Trylon
Communications’ results-based billing system has served
our clients extremely well for nearly 15 years. Trylon
is rewarded for its performance, and compensation is
determined by the amount of superior service provided.
Hourly billing is an idea whose time has come – and
gone. |
