Why billing by the hour (and by the word) might be unethical

Our PR agency bills based on value and scope. We don’t recommend billing or paying by the word or by the hour.

Axia_bill by the hour Ever since Reginald Heber Smith invented hourly billing, many professional services firms – including some great law, accounting, engineering, architecture, and public relations firms – have billed hourly. Our firm is somewhat of an anomaly, as we don’t.

In fact, with all due respect to our professional service colleagues who do, we have personal and corporate ethical issues with hourly billing. And we are not alone in this opinion. While you might not share our belief, we’ll explain in this blog post our ethical concerns, why brevity is key, and why results ultimately matter more.

@thefuturishere
Value-based pricing re-edit short. ##business ##design @thechrisdo
♬ original sound - thefutur

Why hourly billing might be unethical

In our opinion, hourly billing actually puts a client and a PR firm at odds.

Does the firm serve the client best by moving quickly and securing results quickly and not earning fair value for its efficient work? What about when a firm takes employees to lunch for an hour, discusses a number of clients, and bills each of those clients a full hour? Or, have you ever hired an attorney or a CPA who likes to talk and then bills you for the time it took them to tell you stories about their vacations and (grand)kids?

Other aspects to consider about the practice of hourly billing and its ethics:

Tracking time actually takes time, and clients must pay for the time it takes the PR firm to track and report that time.
Are you hesitant to pick up the phone to share newsworthy information with your PR agency because you’re worried about the bill? That’s how you miss potential PR opportunities.
Some PR agencies estimate a low price knowing that if they’re wrong, they can still charge you hourly and cover their rears. These low-pricing tactics mislead clients all the time.
What happens when your PR firm bills you for on-the-job training for a junior PR associate to learn how to do that work? That’s not fair.

"Clients don’t invest in agency support for the hours involved or the work," said Steve Boehler, founder of Mercer Island Group. "They have business issues they need to address. When agencies understand the business issues that are most important to the client, they are much more likely to be able to really help."

Brevity is key

In addition to the ethical quandary of hourly billing, we have an ethical concern with quoting a client by the number of words. Why? Because brevity is key. It’s ideal in news releases, media pitches, video scripts, social media posts, blog posts, emails, meetings, and in phone calls, etc. When charging by the word, writers tend to get long-winded and forget that "less is more," all while making more money for their loquacity.

To paraphrase French mathematician, inventor, and philosopher Blaise Pascal: We only make it longer because we don't have the time to make it shorter. The fact is that writing for brevity often takes more time and craft.

You don’t want your PR team writing just to hit a word goal for payment when true PR pros could say the same thing in half the words – and say it better. The best writers write for value and remove any unnecessary words and sentences to get the point across clearly and concisely.

Results-focused

At our firm, we don't ask our college-educated and highly experienced PR professionals to enter time sheets. Instead, our team focuses on the activities that drive desired results.

Most professional services firms and consultants are afraid to quote flat rates because this doesn't give them a buffer that protects their inefficiencies. They don’t want to scare you with what it’s really going to cost you once you add up all those hours. If the team you hired is truly made up of experts, then those PR pros have completed these types of engagements for multiple clients, and they should have experience and knowledge of how long it typically takes to get it done and earn the desired outcomes. PR firms should quote a price based on the value of the work and then stand by their value and expertise – not charge you by the hour.

Don’t let low prices distract you

Simply because one company has a cheaper estimate or a lower hourly rate doesn’t necessarily mean it can provide quality results in a timely fashion.

What if it takes the lower hourly priced firm 10 hours and the higher-priced firm one hour to do the same work?
What if the agency intentionally quotes a lower retainer rate, knowing it'll intentionally go over budget by billing more hours each month?

Which firm is actually cheaper? Instead of shopping by price, choose a PR agency based on your review of its portfolio of work and case studies. Look for documented success and results similar to what you desire to help your company build its brand.

Examples of great work that we performed in minutes, not hours:

We’ve provided clients with $60,000 in income and new franchisees in as little as 15 minutes with one single media pitch after identifying the best reporter and the right opportunity for a story.
A financial services client of ours wanted an influencer in its industry trade media to interview them. It was on our client's bucket list. This client thought it would take years for us to accomplish this. Within five minutes of them hiring us, we scheduled the meeting. Imagine if we invoiced for five minutes instead of for the real value. Did they care that it only took five minutes? No! They loved it!
Once a client shared a PR output with us that they desired to reach within five years... we reached it within five business days!
Several times with just three emails and an hour of effort, we were able to remove a negative article about a client using our relationships and tact, instead of using more expensive legal channels and actions.

Why should your PR firm firm suffer for getting exceptional results and delighting clients in a short period of time? And if it takes longer to get results or to complete a task, why should a client have to pay more for our slower results?

We believe in taking care of business; that’s in our clients’ best interest.

When hiring a PR firm, consider the ethical ramifications of hiring one that charges by the hour. We’re results-focused, not hourly and activity-focused. We prefer to leave hourly billing to the hourly wage and minimum wage mindset and to those who want to be in the commodity business. Let's pay professionals for the true value they bring to the table.

Be sure your PR investment is the best one for your company. Download Axia Public Relations' complimentary guide "Maximizing Your Public Relations Investment" today. You need a PR firm that has your company’s best interest at heart and drives a PR campaign aimed at results that build your brand.

Clients love Jason’s passion, candor and commitment as well as the team he has formed at Axia Public Relations. He's advised some of America’s most admired brands, including American Airlines, Dave & Buster’s, Hilton, HP, Pizza Hut and Verizon. He is an Emmy Award-winning, accredited public relations practitioner, speaker, author and entrepreneur and earned his certification in inbound marketing. He founded the PR firm in July 2002. Learn more about Jason.