The Folly of Hourly Charging

I am writing some more back office content about how I run my leadership development company. From my ways of working to the science behind my business model. In this piece I want to double down on why I think the model of charging by the hour for professional services firms is broken and needs a whole rethink.

For many professionals, whether speakers, coaches, advisors, or facilitators, charging by the hour is the default approach. It’s simple, familiar, and seemingly fair. But in reality, this model is deeply flawed. It undervalues expertise, limits earning potential, and fails to account for the true value delivered.

Instead, a more strategic and sustainable approach is to charge for the full scope of engagement. One that considers not just time spent in direct service but also the thinking, preparation, and impact generated.

Walk with me.

Charging by the hour often creates a race to the bottom. Clients compare professionals based on rates rather than expertise, leading to downward pressure on fees. Worse still, it penalises efficiency. The faster and more effective a professional is, the less they earn. This approach commodifies knowledge and experience, ignoring the years of skill-building that enable high-quality delivery in the first place.

Additionally, hourly pricing creates a transactional mindset. It shifts the focus from results to time spent, discouraging deep engagement and strategic thinking. It also fosters a reactive dynamic clients watch the clock rather than trust the process.

For example someone may ask me my hourly fee for speaking. If I was going to break it down into an hourly fee then it doesn’t take into consideration all the things I am doing before I speak. For example the time we spend trying to agree on what it is exactly you want me to speak about and what outcomes you want. And those things can differ on whether it is a keynote, a masterclass, a webinar or an after dinner speech. I am going to spend a considerable amount of time researching you, your industry and tailoring the content accordingly. Where applicable creating visuals not only for when it is live but also for downloadable content for your audience so that they have a summary of the main points. So there is the scripting, rehearsal of the content and chopping and changing where applicable. Did I mention the travel? That in taking the time to get to and from your event, meet and greets with audience members who will usually want to give live feedback, sometimes take selfies or get a personal book signed. This something that has to built into the costs of running my business too. And finally reviewing with yourselves afterwards, make you realise that this is not based on an hourly fee.

So what then? You may ask

A more effective model charges for the full engagement, encompassing four key phases:

Discovery – Understanding the client’s needs, challenges, and objectives. This phase involves research, conversations, and assessing the right approach.

Defining Scope – Establishing the framework for delivery, including the intended outcomes, process, and deliverables. This ensures clarity for both parties.

Delivery – The actual execution, whether that’s a keynote speech, coaching session, advisory engagement, or facilitation. By this stage, the foundation has been laid for maximum impact.

Debriefing & Follow-Up – Evaluating outcomes, providing reflections, and offering ongoing insights to support long-term success.

This model works regardless of the type of service provided. Whether speaking at an event, advising executives, coaching a leader, or facilitating a workshop, the value is in the full engagement not just the hours logged.

I know this is contrarian to how many consultancies work, but let me explain why I believe that model is broken and why this model works instead.

This Model Works because

It values expertise, not time. Clients pay for the transformation and insights you bring, rather than just the minutes on the clock.

It ensures alignment. The engagement is structured around achieving outcomes, making it a partnership rather than a transaction.

It removes limitations on income. Instead of capping earnings based on time, this model allows professionals to charge based on the impact delivered.

It provides clarity. Clients know exactly what they are paying for, creating confidence in the process and the investment.

Moving away from hourly pricing requires a shift in mindset, not just for professionals, but for clients as well. It’s about repositioning work as an investment rather than an expense. It’s about focusing on the value created, not the minutes counted.

The most successful speakers, coaches, advisors, and facilitators I know don’t get paid for their time. They get paid for their expertise, insight, and ability to create change.

As I always say, you are investing in forty years of experience not an hour of time.