Value-Based Fees: How to Charge—and Get—What You're Worth: A Guide for Consultants, Second Edition

Interlude: The Case of the Rebounding Retainer

For several years, I was on retainer to the CEO of a $600 million subsidiary of one of my largest clients. The CEO had access to my smarts, if you will. He could call at any time and ask about anything on his mind, providing it was within my competency. Nutrition, for example, was off-limits, since my life is the quest for the perfect cheeseburger.

The president would call me about once a week or less. On occasion, he would call me on Monday night during halftime of Monday Night Football. He didn't like football, but he knew that I did!

Once or twice a year, he would call on a Sunday, apologize to my wife for the intrusion, and ask a question that had arisen and was urgent for a board meeting the next morning. One Thursday he called about a critical violation of company ethics and asked if I could possibly facilitate a retreat that weekend since he was bringing in the entire field force to address the issue. I dropped what I was doing, reoriented my schedule, and took care of it.

Every year around November 1, we would casually discuss the next year's retainer and agree on a handshake to continue it on the same basis: $10,000 per month or $100,000 total if paid in one sum on January 2. Each year, he paid the $100,000 right after the New Year.

In the fourth year of the agreement, we chatted as usual on November 1.

"Same deal?" I asked nonchalantly.

"No, not next year," he said, not looking me in the eye.

I was stunned and immediately ...