Date: January 6th 2010

In my experience, the question of when a business needs to pay for expert professional advice (accountants, lawyers, and consultants) often is not the subject of structure and policy, but it should be.In my experience, the question of when a business needs to pay for expert professional advice (accountants, lawyers, and consultants) often is not the subject of structure and policy, but it should be.

Professionals generally get paid by the hour or fix a fee for a project and respond to requests. This places a burden on the client, as the initiating party, to handle the relationship in a thoughtful and efficient way. This, of course relates to the resources available to pay the professional and the nature of the tasks the professional is asked to perform.

There are tasks which require certain professionals to be involved (tax returns and court cases). There are certain issues on which a business needs expert guidance. You may not know what all these tasks and issues are, but you will know most of them. Even if there are times when you will have to receive advice on what requires an expert’s opinion or action, you should control the relationship.

It will be less expensive for you if the professional is familiar with your business and the concerns it generates. Rejoice if a lawyer you are dealing with wants to know more about your business without charging you for that time. Similarly be pleased if your accountant makes suggestions for which payment is not expected. The more you interact with your professional advisors, the less time (fees) you will spend on giving the professional facts about your business, but as with any other cost the doctrine of diminishing marginal utility applies to more and more frequent levels of interaction.

For any given decision involving expert advice, the professional should identify to you the information you need to know to make your business decision according to your values and business acumen. Professionals are paid to advise, but beware of the professional who gives advice broader than their area of expertise. For example, lawyers advising you should not be telling you what decision to make, but informing you of the consequences that will occur depending on your decision. Therefore, it is misleading and unwise to engage a lawyer to provide specific legal advice and then ask for general business advice.

You should have a written fee agreement for all work done by professionals. You should understand the fees and costs associated with what you are asking before the service is performed, and if there is a change the professional should give you notice of that change immediately. You should expect the professional to be accessible by responding to your communications quickly and by having time to discuss important matters with you. You should be billed promptly and accurately for services with no surprises. Such a billing deserves immediate attention and prompt payment.

Create a thoughtful structure for asking for and receiving professional work and advice. Keep track of what you like and do not like about the various relationships. Learn from your experiences and change your structure. It is incumbent upon you to effectively manage your business relationships with professional advisors.

Please comment or post with your thoughts on managing professionals.

© Rick Riebesell 2010. All rights reserved.

For more articles and information visit the BTC web site.

Business Transition Consulting (BTC) provides testing and observation of owner-managed businesses through a one-day observation of the business and delivery of an oral report the next morning. This business checkup is a Business Review. This service is available from BTC.

Link to my latest video on Creating the Business Plan.

See Questions for a Business Owner.

Don't have time to plan? See Never Had Time.

For information on my book see Business Succession Planning.

Earlier emails of this list are posted to my blog.

See my LinkedIn profile.

You can follow BTC on Twitter.