Old Men, in Old Firms, with Old Ideas

My VeraSage colleague, Dan Morris, and I teach Everyday Ethics: Doing Well by Doing Good, for the California CPA Education Foundation.

In our class earlier this week, we had a discussion about whether or not hourly billing was ethical. I emphatically claimed it was not, since we would not want businesses to universally sell us goods and services by the hour. As customers, we have a right to know the price of a product or service before we buy it, and this is how all other businesses must price.

This did not sit well with two members of the audience, one of whom became rude and obnoxious, and actually tried to suppress the discussion. I suppose when one doesn't have any facts, and lacks any intellectual curiosity whatsoever, the best strategy is to stifle debate and impugn the motives of the instructor. It's a good thing Dan and I maintain academic freedom in our courses.

In any event, the most interesting point was made by two industry CPAs, who work for large companies, and hire law and accounting firms. One was complaining bitterly about how his CPA and law firms were nickel-and-diming him by the hour, running up bills in the hundreds of thousands of dollars without ever informing him of a price until after the fact. He was quite upset about this lack of certainty of price.

Another industry CPA informed the class she demanded, over two years ago, that any CPA or law firm she hires will from now on give her a fixed price for all work, in advance, period. She has budgets, and simply has to know the price before she engages any firm.

How can it be possible for a group of professionals to sit in a room and hear two customers of their services bitterly complain about how they are priced, and refuse to do anything about it? Ultimately, the customer is the one with the gold, and hence they rule.

As our VeraSage colleague, Justin Barnett, pointed out to the class: "Listen to the voice of your customers, folks. One is showing you how not to do it, while the other is showing you exactly how to make a happy customer. You couldn't ask for a better laboratory experiment. One is the road to success, the other mediocrity."

We ignore the voices of our customers at our peril.

Unfortunately for our profession, it is filled with partners such as the two individuals who didn't even feel the need to engage in the discussion.

They are old men, in old firms, with old ideas. They are killing our profession. Is it any wonder we can't attract bright and talented people to the profession? Who would want to work for such small-minded leaders?

Maybe the physicist Max Planck was right: "Science progresses funeral by funeral."

That's a sad thought, but unless the professions change their pricing practices, we will continue to provide a terrible disservice to the customers we are privileged to serve. It is past time to give customers what they want: certainty in service and certainty in price.

Ignore this advice at your own peril.