Yesterday Martin Waxman, Joe Thornley, and I were recording our second podcast for Inside PR and our topic was the evil billable hour in PR firms. It’s live today and you can listen to it here.
But, because a podcast is so one-sided and because we went off on a tangent that I want to explore further, I thought we could discuss it here.
Exactly one year I blogged about this topic (see it here, but read the comments; that’s where you’ll find the good stuff) and I hate to say we’ve not come to a better conclusion in 12 months time. We don’t actually bill by the hour so the evil billable hour isn’t as prevalent as it once was. We bill for projects; that changed more than a year ago. But we still have to track our time and that’s what I want to get your thinking on today.
In our business, no matter if you’re doing traditional PR or digital communication, you are selling time. And, people who don’t bill their time don’t understand everything that goes into what we do…mostly because it’s not tangible. Sure, digital communication has made our services more measurable and less expensive, but we’re still selling our brains.
I know if someone asks to pick my brain and I’m not going to get new business out of it or it’s not going to turn into a good referral network for me, it’s not worth me giving that person my brain for free. My brain = money. And to know how profitable my brain is, I have to sit down daily (or weekly) and enter my time.
But the idea that we have to track our hours to know whether or not the time we are spending on a client’s account is profitable for our business and to show the value of what we do to our clients seems very archaic. Problem is, we don’t have an answer.
I was thinking about this while pounding out the bike miles this morning. There has to be a better way.
If you were me, how would you change the financial model to be rid of billable hours and tracking time?