Posts Tagged ‘clients’

Billable, or fixed rate?

I read an interesting article (requires online subscription) in Monday’s Wall Street Journal (24 August, 2009) about the pending demise of billable hours at law firms. It appears that lots of large corporate clients, who also use outside counsel to augment their corporate legal teams, are driving some hard bargains and asking law firms to drop the highly profitable billable hours compensation model. Any time I see lawyers making less it makes me smile a bit, though, before I started getting too giddy, I kept reading. The article gives the impression that both sides are on board with it and that it’s pretty good for everybody involved. The article made it seem that there are some very open discussions between clients and vendors (let’s face it, if you work in client service then you’re a vendor) about what you get for certain agreements, and there is still the ability to revert to hourly for really large, complex cases. That’s when it hit me and made me jealous, for just a second, of the lawyers.*

The article, in its most refreshing passage, quoted a lawyer who said of these agreements that

a client can’t expect to have the absolute best team of [trial] lawyers from a firm and have the lawyers give up all the other work they could be doing on a regular fee basis to work 18 hours a day for months of time on a flat fee engagement.

Right there is the difference between agencies and law firms. I guarantee that even when an agency says we’ll work for that, and we’ll get it done for next to nothing, they never follow it up with “but we’ll put our b-team on it, they’ll work no more than 40 hours/week, we will not deliver our best work as we could for more money and we will ruthlessly manage your scope so that not a single comma will be moved, nor a logo enlarged even 1% after the allotted two revisions.” Sure, it’s written in scopes and terms etc., but it never happens like that in practice. Agencies, “invest in the relationship” and reduce their margins in an effort to hang onto business. Sometimes, this is warranted, but eventually it makes for bad relations between agency and client, as well as the team being put through the grinder by the client on one side and management on the other.

Agencies should follow the example of the folks in the law firms. Be blunt. Be up front. Be strong. Agencies have long worked on fixed cost projects, and have always striven to lock in long term retainers, but they rarely stand up for themselves within the frameworks of these agreements. Given the plight of so many shops today (though the market does seem to be stabilizing, somewhat), they will be more loathe than usual to stand up for themselves and say “this is what it takes to do this, We can work under this agreement, but you need to give us latitude and you need to understand very clearly that the scope means what it says.” I hope that large corporate clients and their large law firm-vendors acting like rational organizations and altering their relationships in the context of the current economic climate, can be a positive example to agencies and that the latter can learn a thing or two to help them down the line. Maybe, agencies need to hire lawyers to help with these conversations. Or, if an agency would rather not pay the hourly fee they, could talk to their outside counsel about moving to a fixed rate agreement and get some pointers for when they have the same discussions with their clients.

*Major Tangential Aside: Could you imagine an agency that got paid for every hour it actually worked for a client? Imagine if agencies were more like lawyers (used to be)? We’d all still be sitting in private offices with credenzas filled with booze a la Don Draper and the boys of Sterling Cooper (those were the days!).

A clean shave

A colleague wrote me recently and asked me if I knew anybody who did development for a certain open source platform. I was not overly familiar with it and despite a seemingly robust community of supporters it is not a huge community. I put out a tweet, and put out some direct notes to some of my developer friends and unfortunately, got nothing back.

This incident has proved educational to me: beware of the bleeding edge. When producing work, and executing projects the availability of talent to help you finish the job must be taken into account. Now the circumstances around this situation were fairly extreme, but all projects are a human endeavor, and when dealing with humans there is no telling what situations may arise.

I once had a client, a true innovator in their sector (the innovator in their sector, actually) but when planning marketing campaigns, and discussing the technology to use for them they preferred that their units work — both technically and from the perspective of ROI — rather than be technological feats (I still agree with this, if it makes sense for the brand and its goals then go rad, but never do cool for the sake of cool). We used to joke that they wanted to be first as long as someone else went before them. All jokling aside we did do some bleeding edge campaigns for them, but we worked closely with our vendors to ensure success. I commend my colleague and his company for their use of this young, cool, interesting platform. They were hamstrung at the last moment by a one in a million scenario. Unfortunately, that’s the margin for error on the bleeding edge.

This is the first in a series of posts about interactive producers & interactive production. It reflects my viewpoints after years of doing this work in various agencies, in two cities.

I’ve heard the role of producer described as the most thankless task in an agency. Certainly, there are times when it is. If a project goes well no one really knew you were there and the creative team gets the credit. If the job goes badly, the producer (and also the account team — the most thankless job in an agency if you ask me) takes some major blame. The goal, obviously, is to avoid bad jobs and only deliver good jobs but advertising and marketing being human endeavors, perfection is not always possible.

Good producers go a long way to mitigate the risks inherent in any engagement. The earlier a producer enters the creative process the better they are able to identify the risks and required resources, shape scope and schedule and come to an accurate estimate for execution and delivery of a proposed project. One would think that anybody in an agency, with a certain amount of experience under their belts, could do these things. However, there is a difference between estimates, schedules and staffing plans created by an account person or a creative director and those created by producers. The reason for this is that producers own the work. Account folks own the relationship. Creative directors are brand stewards. The motivations, biases, and pressure affecting each of these players is different and affects their viewpoint on how a job should be executed.

As owner of the work, the producer’s number one job is to tell the truth. This is not to say that account folks and creative directors do not, but the producer, relying on experience, and the maxim to tell the truth can define what he or she thinks should be done, when, by whom and how much it will cost. Once stated, internal negotiations ensue and all parties come to an agreement by which the team, the agency and the client can abide. Once the job is under way, producers (should) roll up their sleeves and get down in the trenches with their teams to ensure successful delivery of the project.

This typically requires in-depth knowledge of every possible project detail, client goals, agency goals, potential risks, and knowledge of team personalities. In the end, this last point is often the most important. The producer is sometimes a task master, though, more often an encouraging friend, a therapist, arbitrator and ombudsman. Working with creatives is a must, and knowing how to do so is very important, but not always apparent. Creatives are driven by different things than others in the business world and they do no react to the same incentives as others. There have been many jobs done in by poor relations between creatives and producers who are not creatively focused.

So what does all of this mean?

In an agency setting:

• Define the role and responsibilities up front to ensure the best match as you staff the need (there is an incredible discrepancy between agencies of how the role is defined and the expectations around it — if they even exist)
• Staff the right type of producer for the job. If it’s a creative deliverable, staff a producer versed in the management of creative projects as opposed to software development, or IT implementation (in which case they will more likely be PMs, more on this in a later post)
• Producers should be brought in as early to assist on a new business pursuit — in this market it’s imperative to define your projects as rigorously as possible, up front, since revenue isn’t flowing like water, and it can get expensive to bring in a producer to fix a job

On the client-side:

• Ask if your project will have a dedicated producer (or PM, depending on the project type)
• Find out how your agency defines the role, and what the agency’s expectations are of this person and how they align with your own
• Ask to meet this person