How Should You Pay Professional Adviser Fees? Hourly, Project-Based, or Milestone-Based?

Paying fees is not at the top of anyone’s list of fun activities. 

Some business owners take the approach of saving up front and decide that they’ll do it on their own, while others invest for future reward and seek out the advice of others. 

In our experience, the best-run companies seek out experts at the right times. We’ve talked about this elsewhere, so we won’t belabor that point here.

Understanding Professional Fee Structures Before You Hire

This post is for you if you’re wanting to think about different fee structures, as you consider hiring professionals.

Whether you’re bringing on an operations consultant, CPA, attorney, or social media manager– or considering retaining the services of a Fractional CFO, Chief Transaction Officer®, or strategic growth partner like Doescher Group, here are some things to consider. 

Hourly Fees: Paying for Time, Not Outcomes

Pros: With hourly work, you pay only for what you use. This avoids “overpaying” for “unused” time that might be implicitly baked into another fee type.

Cons: It pinches the flow of communication. The easiest way to say this is that if a client has a question, as a professional adviser, I want them to call me. If I’m billing hourly, they are incentivized to avoid talking to me until it’s absolutely necessary. As a service provider, it feels very zero-sum. It’s also unpredictable and prone to surprise for the client and adviser. For the client, they may ask a seemingly simple question and then get stung with a huge bill down the line. For the adviser, it’s hard to set aside dedicated time in advance to prioritize any particular client’s needs. Concerns about milking the clock and high hourly rates are also a con. Payment is not connected to the value or expertise provided. It’s purely labor-hour based.

Monthly Retainers: Predictable Costs and Ongoing Advisory Support

Pros: This is the easiest to plan for as a business owner. There is a scope of duties that needs to be done and a price paid every month. Regardless of the effort required in a particular period, the expense is known, predictable, and you can use the adviser as much as you like within the period. This really treats them like a contract member of the team, which a good adviser should seek to be. Outputs (deliverables) focused, not inputs (hours) focused. Likewise, the adviser is able to plan ahead and set aside dedicated time to do the work in the most efficient and effective manner possible.

Cons: If you don’t use it, it’s a waste of money as you pay for unused time. If you only need their advice periodically or seasonally, it just might not make sense (i.e., if they’re not a contract team member). If their advice is not ongoing with clear monthly duties, the monthly retainer may not feel like a good investment.

Project or Fixed Fees: Clear Scope, Clear Cost

Pros: Complete cost control. Not time-bound. If you have clear deliverables and you know the steps that need to be taken, this can be a great option to remove the uncertainty of cost and timing. Can be a great way to get to know each other before stepping into a deeper relationship. Great for clear one-time needs.

Cons: These can tend to go on if there is no catalyst to get the project over the finish line. Scope creep can create issues for both sides and needs to be proactively addressed.

Success Fees and Performance-Based Compensation

Pros: You only pay for performance. Incentives are aligned completely if you are 100% sold on achieving the milestone that triggers the success fee. You can set thresholds that allow you to pay outrageously for outrageous results.

Cons: If this is the only real form of compensation, your adviser may be too incentivized to push you to do the thing that gets them the fee. It’s missing the relational and context piece that you need to get the best possible advice. This becomes more true the deeper you get into the project.

How Doescher Group Structures Fees for Long-Term Alignment

At Doescher Group, we have done all of these. While they all have their merits, we stay away from hourly, which, from our perspective, is the most misaligned of all the structures. We do some projects where it makes sense, but we work with the vast majority of our clients on a monthly structure with success fees tied to major milestones. This creates the incentive for us to attain major milestones for our clients, but in a grounded and connected model that keeps us aligned with our clients’ best interests every step of the way while still recognizing the big successes. 

If you’re thinking about bringing in outside expertise and want a fee structure that actually aligns incentives, this is exactly the conversation we regularly have every day. We help business owners design advisory relationships that support real progress, not just activity. If you want to talk through what structure makes sense for your business and where you’re headed, reach out. We’re happy to start with a conversation.