A patron who said the artist simply had not put sufficient time into an artwork he had commissioned once sued Whistler. Asked by the judge how long the work took, Whistler replied without embarrassment 10 minutes.
But then, the artist added almost as an after thought, "...and a lifetime of experience."
While not suggesting that most professional work can be exactly equated with a work of art, the same conundrum faces public relations practitioners, lawyers and a myriad of other professionals who by tradition, as opposed to common sense, bill by the hour.
Whistler, in his court case, was insisting that it was the quality of the artwork that counted, not the time. I prefer to use the term value as opposed to minutes ticking away on a clock.
When employed as an executive vice president at the PR giant Burson-Marsteller, my billing rate - and this was a decade ago - was $400 per hour. I argued within the company that hourly billing was not for professionals - that it dumbed-down what we do.
I insisted to anyone who would listen that getting paid by the hour was more for factory workers, babysitters and ladies of the night. It simply wasn't the way things should be done in public relations.
About that time, I was asked to set up a meeting for a client, the chairman of a major pharmaceuticals company, with an influential U.S. senator. A health care bill was before the Senate that had far-reaching impact on the prescription drug industry.
Out of a Washington office of nearly 100 PR professionals, I was the only one who could, with little effort, pave the way for the meeting. Ten years earlier I had worked for Sen. John D. Rockefeller as his communications director, aiding in his election to the Senate. We had remained friends over the years.
It took less than 15 minutes to set up the meeting with one call to Rockefeller's appointments secretary. My briefing of the pharmaceutical chairman took another hour. The meeting itself took an hour. My debriefing of the chairman took another 30 minutes.
By an hourly billing formula, the price tag should have been less than $1,200. By value billing, the agency settled for, as I recall $5,000, which represented much less than the meeting was actually worth. The client got a bargain.
In this case, it was fortuitous that the agency had a former senior Rockefeller staff person on its payroll. It was helpful that I had remained close to the senator over the years, and had only rarely asked for a client meeting. Additionally, I had sufficient knowledge of the Senate - having worked on Capitol Hill eight years - and the senator to brief a leading chairman on how best to approach the meeting.
All of this added value - something hourly billing quite often does not take into account.
Some clients require hourly billing, even when told that an agreed-on retainer would be of greater value. This is particularly true of the various government contracts, even though hourly billing quite often has led to major companies and individuals getting into hot water.
Within the last three years, both Ogilvy, the advertising company, and Fleishman-Hillard, a PR company, have had senior individuals sentenced to prison time for fraudulently overbilling. While both companies quickly distanced themselves from the offenders, the culture of overbilling by the hour is endemic to the hourly system.
I believe there is actually more predictability in retainer billing based in value. My own formula for charging clients is this: Fee = perceived value + real value + potential value.
Admittedly, it is not an exact science. That is why I suggest every agreement be revisited after three months to determine if benchmarks are being or not being met, or if they are being exceeded and that the retainer be adjusted up or down accordingly. I also believe in frequent client/agency assessment meetings to determine if goals are being achieved to the client's satisfaction.
Maybe this is where Whistler missed the boat.
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