An Ombudsman’s Metrics

This blog has provided some unique opportunities to “virtually” meet people recently and discuss the profession and exchange bits of knowledge.  Several ongoing discussions have been about the advantages of ADR or Alternative Dispute Resolution and cost metrics with regards to “traditional American style” problem solving.

My “debates”, where I have to “take sides” for a moment, are in fee structure with potential clients.  After over 21 years of corporate, business and organizational development these “formulas” come very easily for me.  First, I look to the “macro” business environment for ad hoc research on costs.  One of millions of examples was a research study  in 1998 where  a US state began benchmarking  and tracking “legal services costs” for millions of “legal services” employees; a tremendous undertaking  if you think about it.  Average cost per employee, per year in 1998 were determined at around $97,333.  10 years later, still tracking, all benchmark categories have held “flat”, with the most increase 10 years later  in the “legal administration” line item.  So, costs in 2008 are up significantly, but they have not publicly published the overall results… they don’t need to, “we” all feel it, do we not?

The best “tip”, for all those asking, who are in the profession, is to get comfortable with your own “value chain” (look it up) for your services based upon the industries you work in.  These are multi-dimensional, constantly “in flux” with todays economy and “ripple outwards” with impact from internal organizational loss of jobs out to the general external community in terms of shareholder and stakeholder economic impact and dozens of “dimensions” in between.  I can add layers with ease, valid and reasonable “assumptions” to make “my side” of the debate on fees with a client… impartial and fair.  For years though, I’ve worked on the “cost” plus “value add” basis simply stating that my fees are very resonable if you project out the “value add” you’ll receive on a “real cost” basis.

If you doubt this, don’t.  The best example I can relate to you is that I teach this model in class, more detailed of course, and “feedback” from one student at the end of the quarter was that his company landed a multi-million dollar contract with the government of Mexico after they improved the  “added value” they’d not considered before.

Hope this helps…


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