Hourly Billing Prevents Growth

In my previous post on How To Prevent Scope Creep, I opined that consultants who bill by the hour do so because they don't trust their clients. This week, I’ll explain why I bother yaking about hourly billing at all.

Technically, I shouldn't care if consultants bill for projects by the hour. If some consultant wants to do themselves - and their clients - a disservice by charging hourly, it gives me a competitive advantage. After all, clients don't buy hours; they buy results, which is what I sell.

While this line of reasoning might make sense in the short term, it's deadly in the long term. Here's why:

A consultant who bills by the hour has no financial motivation to build or purchase tools that would save time, to participate in professional development, or to stay on the cutting edge of industry research. In short, they have no incentive to get better at what they do.

When an entire industry consists of people operating in this manner, there is no hope of progress for the group. No one will ever forge ahead in a ground-breaking way because there is a financial disincentive to becoming better at solving problems faster.

Therefore, an industry that bills by the hour will never get any better at what they do.

I find this realization both depressing and ironic, considering that everyone in this business despises inefficiency. Hopefully, you agree.

To be continued...