Years ago, if you asked a business owner to tell you who handled his or her firm's accounting, the answer would have been something like, "Bob Jones is our accountant." More recently, the answer might have evolved to, "Smith and Jones is our accounting firm."
Today, however, you'd be likely to get an answer that sounds something like this: "Last year Smith and Jones handled most of our general accounting, but we bid out some special-project work, and Brown and Brown came in with the best price. This year, we found a couple of firms that could beat Brown and Brown's price on special projects, and we split other work between Smith and Jones and a Fort Wayne firm."
Insert a different professional service into that story wherever you see the word "accounting," and you have a snapshot of the changing face of client services. As businesses everywhere scramble to trim costs and tighten budgets, they're increasingly asking accountants, lawyers, ad agencies and other professional-service providers to bid for work on a project-by-project basis, rather than engaging them for long-term working relationships.
In today's difficult economy, such project-by-project arrangements -which I call "transactional" relationships to differentiate them from the longer-term "dedicated" relationships -are attractive. Used wisely, they can be a prudent way to save money on so-called "commodity" services that are, and should be, price-sensitive. However, overreliance on the transactional approach can produce unintended consequences, and lost value.
Clearly, I have a vested interest in urging dedicated relationships. As managing partner of a law firm, I -like most professional-service providers -would like to see a client list filled with long-term, retainer-paying, repeat-business clients. These dedicated arrangements often are more efficient and usually offer greater professional satisfaction than transactional relationships. But my preference for dedicated relationships is not driven entirely by self-interest. I also believe that dedicated relationships provide immeasurable benefits to clients.
This point crystallized in my mind during a recent conversation with a long-time client who, only somewhat facetiously, argued that he had been using our firm for so long and in such quantity that he should be granted a discount. I conceded to him that, in at least one dimension, his argument made perfect sense -a company purchasing hard goods from a long-term vendor usually qualifies for such discounts, so why shouldn't he? However, I also pointed out that, as a long-term, dedicated client, he often benefits from our "goods" even when he doesn't pay for them. And that, in essence, amounts to higher value for him.
This answer was not simply a product of salesmanship; on the contrary, I believe it demonstrates the essence of the dedicated relationship.
The professional who works with a client in a dedicated relationship is part of the client's team and, therefore, becomes is more attuned to the client's needs, developments in the client's industry, changes in the marketplace that might affect the client, and the like. As a result, the client often receives "unbilled brain time" from the professional. The professional might think about the client's needs on the way to work, might be prompted by an evening news report to consider the impact it could have on a client, or might discuss the client's circumstances with a colleague as they're getting coffee. The client isn't typically billed for such time, but this "off the clock" thinking about the client can be some of the most valuable time a professional devotes to the client.
All of this is a product of the professional identification with the dedicated client. The professional is watching out for the client's broader opportunities because he or she understands the client's broader needs. The professional doesn't simply react to calls from the client, but instead anticipates problems and opportunities and puts his or her brain to work on them before the client calls.
The advantages of this arrangement transcend these obvious benefits. The client, knowing that the professional is attuned to his or her needs, develops a sense of trust and well-being, and learns to rely on the professional as a reservoir of information and a source for insight. In a transactional relationship, the professional is seldom capable of filling these roles.
It would be difficult to assign a price to all that flows from the dedicated relationship. The unbilled time alone -the brain time during the morning drive, the ideas considered in the shower, the casual conversation over lunch -certainly has value. But the depth of commitment the dedicated professional brings to the relationship is as valuable and real, albeit less tangible.
These days, the bottom-line pressures on CFOs, managers and other business leaders can make it impolitic to argue against immediate cash savings and in favor of intangible less definable rewards. Nonetheless, I suggest that it is imperative that all of us, on all sides of the relationship, do just that, and demonstrate to those who hold the purse strings that dedicated relationships have value and that, in the long run, their value does, indeed, make its way to the bottom line.
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