In this guide 6 sections
Extra work goes unbilled. Nobody writes it down at the time, because a quick call, a favour or a revised draft each feels too small to log. Add a scope line to every job, a one-minute capture step and a Friday review where a partner decides bill, quote or absorb for each line.
How the leak starts
A client rings the associate for a reference letter addressed to the bank, and it takes forty minutes of drafting and checking. Nobody tells the partner. No job is opened. The letter goes out free.
Multiply that by every client and every week. The favours are small one by one, but together they eat a full person’s year while the fee stays exactly where it was when the letter was signed.
The cause is rarely greed. The firm has nowhere quick to record it.
- Phone calls that turn into advice
- Third and fourth rounds of draft revisions
- Extra meetings with the client’s lender or auditor
- Requests for copies, certificates and comfort letters
- Work done for a director’s other company
Start by writing the scope down
Nothing is extra until the base is defined. The engagement letter should list the deliverables, the number of review rounds, the number of meetings and the period covered, in plain words.
Add a short out-of-scope list. Typical entries are regulator queries after filing, restatements of past accounts, board pack support, work for related entities and anything needing a site visit. Clients accept limits they have read.
Copy the scope onto the job record, so associates see the review limit and the meeting count on screen before they say yes to a favour.
Add a one-minute capture step
The step must be quicker than skipping it. One form on a phone or in the job screen is enough: client, request, who asked, minutes spent, and whether it was in scope.
Make the rule plain. Anything outside scope gets a line before the end of the day, because staff are not being watched but protecting the fee that pays their salary.
An unsure associate ticks “ask partner”. The partner then decides to bill, absorb or quote, and that choice is made on purpose instead of by default, with the reason typed beside the line.
- Client and job
- Request in one sentence
- Minutes spent
- In scope, out of scope or ask partner
- Billing decision: bill, quote or absorb
Run a weekly review with a decision for each line
Friday’s review takes fifteen minutes. A partner or manager reads each captured line and picks one of three outcomes, in the room, not by email chain, while the details are fresh.
Bill it now with a short note on the invoice, or quote it first when the client wants a bigger piece of work than a favour. Absorb it only with the reason written down.
Absorbing is allowed. Hidden absorbing is not. After a quarter you can see which clients take far more than they pay for, and which services keep appearing as unpaid favours.
Raise it with the client
Late news is what surprises clients. Tell them at the time that the request falls outside the letter and that you can quote it or fold it into the next review.
Offer a fixed add-on fee, an hourly rate for ad hoc requests or a monthly allowance of advisory time, since many clients prefer a cap to open-ended hours.
Start with your three most generous clients. Revise their letters at renewal, note the new terms on the job record and tell the associates who handle those accounts.
- Revised scope and out-of-scope list
- Hourly rate for ad hoc requests
- Monthly allowance, if offered
- Approval needed before extra work starts
Extra work capture log
Print one log per month. Each line holds the date, client, job, who asked, the request in one sentence, minutes spent, in scope or out, the billing decision and the invoice number. A footer totals minutes absorbed per client for the month, so partners see which relationships cost more than they earn and which deserve a revised letter.
Open a blank worksheet to printQuestions owners ask
How do we bill for work that took ten minutes?
Batch small items. Many firms collect them monthly under one line, such as advisory calls and correspondence, and charge at a stated rate or a minimum unit.
Will clients push back on extra charges?
Some will, mostly when they hear late. Say it at the time, point to the scope in the letter, offer a quote, and pushback fades once the habit is clear to the client.
Do fixed-fee engagements still need time capture?
Yes. Without hours you cannot see which fixed fees are underpriced, and the capture feeds next year’s quote as well as this year’s extras. Fixed fees still need hours.
Who decides whether to absorb or bill?
The partner in charge of the client. Associates record the facts and partners decide. Writing down the reason for each absorbed item keeps the habit honest and shows the next partner why a favour was free.