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The Value of Efficiency: Why Low Hourly Rates are a Bait-and-Switch

An ATIXA Tip of the Week by Brett A. Sokolow, J.D.

In the early part of this century, TNG and ATIXA weren’t just the prime movers in the Title IX space, we really were the only game in town. Inevitably, our success bred imitators, and now there are 25+ firms where once there was only one. We don’t mind competition at all, because it has shifted the conversation. Where we once faced the question from clients of whether they needed Title IX consultants, the question now is not whether, but which one. That’s a better question, of course. We’ve always believed that quality will win out in the end, and our growth has shown that to be true. When we hire, we go after A-level talent, and won’t compromise on that. The people we don’t hire go to work for competitors, and so you can now choose from firms at A, B, or C levels, maybe even D. Our competitors have mostly chosen to compete on price, which makes sense, but they want the field to think you can get A-level talent for B-level prices. I’d suggest that the number of clients we win or win back on quality proves that you get what you pay for. But, in this case, it’s not about quality, it’s about efficiency, which is often overlooked when clients consider Title IX consulting firm options. It’s an important consideration that we hope you will take into account.

Here’s how this played out. Our Western Area VP is a seasoned professional named Chris Connolly. Chris came to me last year with the concern that he was losing bids to competitors whose hourly rate was 60% of ours, and he asked me if we could match their rates to gain market share. I suggested that we conduct some research from our clients and potential clients, to see if the hourly rate difference was a real difference or not. I suspected that competitors were just quoting lower hourly rates but loading up the hours. We have access to clients that have used a variety of services, so benchmarking was both possible and fruitful. We found that clients using competitors were paying either equal to our rates, or 12-15% above our billing, when total hours were taken into consideration. To be clear, this is an issue in the entire professional services industry, not just in our field. If you quote a client $250 an hour for work, but you bill three hours, you’re not less expensive than a firm that charges 60% more per hour but does the work in half the time.

So, it’s the age-old bait-and-switch. You think you’re contracting in a way that will save you money, but the billing increases. And, because the quality isn’t there, you wind up paying more to fix what should have been done right to begin with. Chris was able to pull together a number of charts to prove to clients and potential clients that our somewhat higher hourly rates do not mean we cost more, and that our service costs are comparable or less than what our competitors charge for the same work. We’ve got enough data to support this that we’ll be happy to share it. When we asked clients to compare to what they are paying others, they realized that they were being billed for 2x or 3x the number of hours that we were charging for better quality work.

Are competitors padding their bills? Who knows. One wrote a letter for a client recently that was 80 pages long. We showed the client our version of the same, and it was 12 pages.

That’s where the size of a firm and its infrastructure matter. We achieve efficiencies that our competitors can’t. Such as? Well, we use a team of investigation support personnel (ISPs). They do all the logistics of the investigation, including defining the witness list, scheduling interviews, dealing with rescheduling interviews and coordinating advisors, recording, transcribing or note-taking, interview verification, and various other support tasks. We don’t bill them at investigator rates, but at much lower rates. Our competitors don’t have this option, so you pay for every hour for an investigator to do what can be done more efficiently and cost-effectively by others. In our model, we bill for ISP time, investigator time, and the time of a senior partner to review all work product. And, still, we’re billing less than our competitors.

We’re not green. We don’t need to bill you for time to get up to speed on your policies or procedures, or state law. We draw from a bank of hundreds of investigation reports and hearing or decision outcome letters. We don’t reinvent the wheel each time, and we don’t pass along the costs to do so to our clients. If we can (and do) adapt a report for you from one we wrote for another client previously, you don’t pay for the time savings, you save on time and money. Speed matters in Title IX resolutions. We are not slow, but we don’t cut corners either. We take the time to do it right. And, we never pad the bill. Could we cut our rates to compete? Sure, but then we’d need to make it up with extra hours, and that’s not how you build a reputation of integrity.

We’ll celebrate our 25th anniversary as a firm next year. We have thousands of clients. We’ve created and maintained an enduring reputation for integrity and industry leadership, and you don’t achieve that by sacrificing quality or efficiency for market share. Think about that the next time someone dangles a low hourly rate at you. It’s the total bill that matters, and it’s not the rate you need to watch but the number of hours billed.

Learn more about our tailor-made Title IX solutions designed to meet your specific needs and provide comprehensive strategic support.

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