I like this strategy and belive that in professional services we increasingly have to have the nerve and faith in our capabilities to make such bold statements.  This would of course make the toes curl of our delivery assurance and risk people, but it is for me the ONLY way forward.  Negotiating a win-win strategy with our clients is a sure fire way of generating and demonstrating confidence.

I really love this strategy. I'd even suggest taking it further.

"Pay as much as you think we're worth."  

...If you like the work you'll have to pay enough to retain the firm. Otherwise some client that is willing to stomp up the fees will get the firm's time. Could effectively have clients 'bidding' for the firm.

Changes the power balance a little...if the firm is good enough.

Who's feeling brave?

Hi David, interesting to see that you're behind this idea. I personally love it, but have heard others say that it somehow indicates self-doubt.

I've written about satisfaction guarantees on my blog, including a rare experience where I did end up withdrawing our fees, which I think was a lucky escape from what would have been a difficult client:

http://www.tomnixon.co.uk/2006/12/satisfaction_gu.html

http://www.tomnixon.co.uk/2008/02/the-anti-retain.html

I appreciate the ideas given by you. The FAQ's under Valorem Law Group section have proved very helpul to me.

David, I believe it's Kouzes and Posner who talk about the need to trust first to earn the trust of others.  Your strategy is a wonderful way to communicate confidence in your own abilitiy while demonstrating your trust in the client.  Most consultants are too scared to embark on such a course.  The fact that you've done it so successfully for as long as you have is a true testimony to the level of satisfaction you consistently provide your clients.  What a marvelous example for us to follow.  Kudos to Valorem Law Group as well. Thanks!

David, I like your philosophy but was curious if you have ever had a client or clients to reduce your fee over the past decade? 

David, 

I admire your satisfaction guarantee policy that you have practiced for over a decade. I would be curious to know if you have ever had a client to significantly reduce your fee?

Based upon my experience, I find that type of policy to be impractical.

I know that I have had many times where a client would not hesitate to take advantage of me on billings, IF I allowed them to do that.

To me, they are inferring the possibility that their service sare not worth what they are charging.

HOWEVER, I have, from time to time, adjusted invoices because the end result may not have been good enough for the needs of the client.

For example, I've had potential new clients come in and I'll meet with them for an hour and discuss their needs.  If I don't believe I can help them, I will send them on their way and NOT charge them, simply because I wasn't able to help them get closer to solving their problem.

MrAchievement
Stanley Bronstein
Attorney, CPA, Author, Blogger & Professional Motivational Speaker

Stanley, I think everyone can identify with your position.  It's why most people don't work under the satisfaction guaranteed model.  That said, what I like best about it isn't the guarantee to clients, but the manner in which the model helps a consultant take a measure of those clients. I believe I'm correct to state that David Maister has never been burned by a client who simply refused to pay.  The system inherently makes the counsultant more mindful of who he/she accepts as a client.  One can see that trust is the necessary centerpiece of the relationship from the start.  If it's not, then neither party moves forward.

Stanley -  on some (rare) occasions I've had to accept lower payment when things have not gone well, but I've never been cheated. Leo is right. The guarantee really forces you to choose who you are prepared to work for.

What a beautiful concept! The client pays as much as he wants, depending on the value received.

I just wonder what is the rate of companies (clients) who payed less than charged by Valorem...