A recent discussion on the Civil Engineering Central Group on LinkedIn asked the question, “Has your firm reduced its professional fees?” The post went on to ask whether readers found it acceptable practice to reduce fees in order to better compete in the current economy or if such practice was a “slap in the face” to our industry because it diminished the value of our services. I had to chuckle as I read the question. I could just picture in my mind the owner of a small firm, struggling to make payroll, on the verge of shutting the doors of his practice for good, telling a prospective client, “Sorry, I can’t possibly give you a lower price. Doing so would be a slap in the face to my profession and would only serve to diminish the value of my services. But let me give you the name of another engineer in town who can get the work done for 10% less…” Yeah, right.

Anyone who is not taking a serious look at the competitiveness of his or her fees in this tight market is kidding themselves. I suspect that I am not the only one out here who has noticed that clients are no longer beating down our doors trying to give us new work. I remember a time at the peak of the housing boom when I had to decide which clients to turn away. Funny thing – I’m not having that problem anymore.

Please understand, I’m not suggesting that one should arbitrarily cut a quoted fee without a corresponding reduction in scope/schedule/etc. – doing so only serves to tell the client 1) that we’re a liar and 2) that they would have been stupid not to request a fee reduction. This practice hurts all of us. In order to avoid this situation, we need to be sensitive to the client’s perception of value before we start throwing fees around.

The key to staying competitive in this market is to seek ways to increase efficiency and add value. Now is the time to take a serious look at your operations. If you can get the same work done in 20% less time or at 20% less cost to your firm, reducing your fees by 10% still puts you ahead. Here are some places to start:

• Systematize redundant tasks. Don’t reinvent the wheel on every project. Document and implement standard procedures.
• Delegate. Push tasks down the ladder to the least paid person who is capable of successfully completing it.
• Negotiate lower fees with your vendors and subconsultants. When you’re being asked to sharpen your pencil, it’s only reasonable to try and spread the love.
• Use technology as a leverage. I’m a huge fan of technology that makes me more efficient and gives me a competitive edge. Find it. Learn it. Use it.
• Outsource. There are a lot of firms hungry for your business right now. If ABC Drafting Services can get it done cheaper and help free up your valuable time to do more business development, what are you waiting for?
• Expand your services. Look for other services that will add value in your client’s eyes. Think one-stop-shop. The greater your scope of services, the better able you will be to pass savings onto your client for those items that overlap.

As professionals, we certainly need to defend our fees, but we also need to practice good business and be aware of the market conditions around us. It’s time to set our egos aside and stop pretending we’re not in a competitive market. We should be looking for ways to increase efficiency and reduce expenses. Otherwise, we may find ourselves out of business.