Survey says! If God and clients give you lemons, make lemonade

We are pleased to announce the 2012 Mattern & Associates Cost Recovery Survey results are in.  Survey participants are being contacted and are receiving their logins and passwords to review the comprehensive and comparative results, not to mention answers to questions like:

  • What is the percentage increase in firms recovering B&W and color prints?
  • In what areas are clients refusing to pay, and in what ways are firms responding?
  • What percentage of firms are implementing alternative cost recovery models—and do the alternative models work?

While analyzing the results of the 2012 Survey, it is clear one key concept continues to hold true since its inception in 2006:  clients have been and will pay for hard costs.

For example, on copying and litigation overflow, the recent survey results indicate that in excess of 95% of the hard costs presented to clients for overflow and litigation support are paid.  Compare this to the less than 50% net realization of the internally generated soft costs.

In light of this trend, why are most firms continuing to charge for soft costs?  Some reasons are:

  • It is the traditional method to recover on-site generated costs.
  • Firms have invested a tremendous amount of money for soft cost recovery systems and the infrastructure to support them.
  • Even with the dismal realization of less than 50%, it still contributes to covering these costs.

The 2012 Survey numbers show yet again the need for a change to this tradition. One possible answer is creating a hard cost pass-through model in which all onsite and offsite costs are structured as hard costs and passed through to the client as such. We call this Mattern Plan B Cost Recovery™ – US Patent Pending.  It takes your firm out of the cost recovery business, reduces the amount of charges to your clients and increases your firm’s net billable realization.  A win-win-win situation.

That’s no lemon, that’s like lemonade on a scorching summer’s day (like today).   Couldn’t resist.

Stay cool.