Negotiating service scope before negotiating provider fees

Built on Chapter 3 of Centimillionaire Strategies by Richard C. Wilson.

A fee negotiation should start with the service the family expects. A lower price for an incomplete assignment can leave the office managing the same unresolved problem. A billionaire family needs a clear account of the work before deciding what it should pay.

Chapter 3 connects fees with contribution and alignment. I would apply that principle by establishing the required output, the responsibilities retained by the office, and the conditions that change the scope. Those facts give both parties something concrete to price.

Define the problem the engagement should solve

State the decision or recurring obligation the provider will support. A request for better reporting might concern incomplete records, unclear presentation, or unanswered ownership questions. Those are different assignments and can require different professional skills.

Ask the provider to explain the proposed work in response. The family should be able to see how the tasks address the original problem. If the proposal solves a narrower issue, identify the gap before treating the engagement as complete.

Agree on the output and its limits

Describe what the provider will deliver and what the office will use it for. Identify exclusions and dependencies. A provider may need accurate source records or another professional's conclusion before it can perform its part.

Give those dependencies an owner. The family should know whether an employee or another advisor supplies the required information. Otherwise, the engagement can stall while each party believes it is waiting on someone else.

Make the commercial arrangement clear

In discussing proposed structures, I emphasize making the arrangement understandable to the parties and their attorneys. I would bring that standard into a service negotiation. The plain explanation should match the actual work and the terms counsel reviews.

Ask the provider to identify what would trigger additional work. The office needs a way to approve a change before the associated cost is incurred where the arrangement permits that process. The provider also needs protection from an assignment that expands without acknowledgment.

Identify the family's retained work

A proposal can look inexpensive because the office performs substantial coordination or preparation. Record those tasks alongside the external scope. The family should understand the full resource requirement before comparing the price with another engagement.

Ask employees whether they have capacity for the retained responsibilities. A service that depends on unavailable internal support may fail despite a competent provider. The solution may involve a broader scope or a different assignment inside the office.

Compare the same required work

Where the family seeks competing proposals, give each provider a consistent description of the need. Ask for explicit assumptions and exclusions. The comparison should explain differences in responsibility rather than simply rank headline prices.

Include the people performing the work. A firm's general capabilities do not establish which expertise is available to this engagement. Ask who is accountable for delivery and how specialist questions will be handled.

Negotiate the specific concern

If the family believes the fee is high, identify the basis for that view. It may have a relevant alternative or a concern that the pricing basis does not reflect the work. A factual discussion gives the provider a chance to explain or revise the proposal.

If the concern is service quality, address that directly. A discount does not necessarily solve missing expertise or weak coordination. The family should decide whether the assignment can be made useful before negotiating how to pay for it.

Approve a usable agreement

Have the appropriate professionals assess the final terms. Assign an internal owner who understands the scope and can check invoices against approved work. Keep material changes with the engagement record so the office can explain the current arrangement.

The useful outcome is a service the family needs at a price it understands. That arrangement gives the provider a clearer job and gives the office a factual basis for evaluating delivery and discussing any later change.

Questions and answers

Should the office ask for a discount first? Establish what the quoted price includes. A specific scope comparison makes the subsequent price discussion more useful.

What if the provider cannot define the work? Resolve the ambiguity before accepting material commitments. The family needs to know what the provider is agreeing to deliver.

This page is general information, not legal advice. Family governance documents and dispute processes should be reviewed by a qualified attorney.