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Seeking Compensation July 11, 2009

Posted by Jason in Daily PM.
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It is common for service professionals to be sought out for advice “on the side”.  I regularly might provide some helpful insights into a particular situation, but any such advice is usually not worth much more than the recipient is paying for it.  The problem is that for someone to spend enough time on a particular problem to provide a truly helpful and customized answer fairly requires that they be compensated for it.

While it’s hard enough to broach the subject when your “client” is an informal acquaintance (perhaps someone you just met at a conference for instance), it’s all the more difficult when dealing with close friends.  Then there is the additional question of whether a bit of upfront pro bono work will lead to a longer term (and profitable) relationship.

A recent question came up in which an experienced professional was having trouble turning his expertise into a “going concern”.  He was experiencing a recurring case of providing some value to at least one other party (usually a larger corporation considering particular strategic decisions), but couldn’t figure out how to transition it into a paying job.  The following is a very loose summary of my advice:

Basically, you are trying to capitalize on some valuable knowledge or insight that you have about the organization and its operations. Unfortunately, while there may be some limited occasions in which this may work, that knowledge (whatever it may be) is not much more than a commodity – theoretically, anyone can eventually reach the same conclusions.

However, the fact that you have this knowledge about these firms, enough contacts to be able to orchestrate some action to pursue opportunities, and the expertise to put it all into action tells me that your own knowledge must be more valuable to the organization than simply facilitating a single transaction.  Dig a bit deeper and find out where the synergy is coming from and why it tends not to be realized before you show up.  There is surely more work to be done after the presentation of your findings.

There may be some money to be made in simply brokering a particular transaction, but my guess is that it should be just the beginning of your value, and may not even necessarily be what gets the fee.  If you really are adding value by simply getting the right people together in a room at the same time, you shouldn’t feel bad about being compensated for it.  On the other hand, if it is simply one more way to build on your existing relationships, it may just be a freebie that allows you to provide some real value down the road

Rather than be a trade off between compensation and relationships, remember that the two are not mutually exclusive.

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