The Most Misunderstood Element of Investigation
By Roy Miller, M.M., M.C.R.M., C.R.J.
It happens way too often.
Good, competent investigators who put themselves through the wringer month after month, jeopardizing their business, even their family’s well-being. And all because they don’t understand this one key area of the entire investigative process.
They don’t know how to get paid. Fairly, completely and on-time.
Yet, it’s a very simple process. Notice I didn’t say easy: it takes a certain amount of ... guts... to make it happen, and some investigators don’t find that easy. Many private investigators I know are humanitarians; they need to be businessmen. Because when they are businessmen, the process of getting paid is both simple and easy.
Here are the basics:
Identify the Scope
The first thing you need to do before starting any investigation is to clearly define the scope of the work, and this can best be accomplished within some form of written document or contract.
Here’s what typically happens. An investigator takes a case for $500 to go interview John Smith to find out what he knows about incident “A.” When he does, John Smith tells him he needs to talk to Bill Jones, because he knows about incidents A2 and A3. Eventually the P.I. files his report and submits a bill for $750 due to the extra interviewing he needed to accomplish. The client says, “Whoa, you said $500. I’m not paying for this!” Discussions (sometimes known as arguments) follow, somebody gives a little, some money changes hands and the P.I. never works for this client again. At least not happily.
It would have been better if the P.I. and the client agreed, in writing and up front, that, at a rate of $50 an hour, he would uncover as much information as possible about incident A, talking to all the people involved. This way it is not a surprise when you have to go talk to Bill Jones and charge for that interview.
Additionally, agree on the terms of payment: do you invoice after the work; do you work off a retainer; how are incurred expenses to be handled. Otherwise, when the job is complete, there is no assurance that you will actually get paid.
Perhaps you are among those P.I.s who believe that if you demand this type of agreement you will lose the project and that client. That isn’t likely. Demanding a written agreement actually elevates the professionalism of what you do. How many attorneys do you know who would enter into work for a client without some type of written contract? And, admit it, don’t attorneys present themselves as more professional for doing this, for knowing their way around the block, so to speak? Why then shouldn’t you be allowed to do the same? Your stock actually rises when you pursue this thoroughly proper course of action.
Other Parts of the Agreement
There are other elements which will also affect the investigation and impact the amount of money you will be paid. Each of these should also be included in the agreement. They include:
- What is the completion date for the assignment? Is this something the client needs (or, more likely, simply wants) to have completed right away? If so, are you accepting this assignment at the possible delay of existing work, in which case you can institute your higher “accelerated rate.”
- What resources are required for this assignment? If you need to use multiple automobiles, additional or contracted staffing, special cameras, etc., this will also have an impact on your costs and thus on your invoice. Be sure that all of this is spelled out in advance.
Keep in mind that a clear definition of the desired goals of the investigation can help you produce a clear definition of the hourly rates.
The Flinch Factor
You already have the talent and skill, the investigative tools, to conduct the investigation. There are tons of books on how to handle specific types of investigations. But you also need to have the moxy to strike a proper business deal if you are going to make a business, rather than a charity, of your work. It’s all a state of mind, and you literally need to be willing to walk out the door of a deal (case, assignment, client) that is not right for you. You must decide for yourself that you will no longer have cash flow problems, and that you are in the investigative business.
Here’s one other tip to watch for in the negotiations process with a client. It’s what I call the “Flinch Factor.” If I describe the business, the payment arrangements of a case to a client, quote my fees and explain the terms of my getting paid, and the potential client doesn’t even flinch at all, then I know I have left money on the table. If the client hesitates or seems to be concerned about the cost of the investigation, then it is likely that I am pushing the limits he has already set in his mind. But if he accepts my terms too quickly, then it is likely that he was expecting to pay more for my services.
This can be a fine line that you need to define, recognize and approach carefully for yourself. But when you do, you are well on your way to making even more money in your investigative business.
And, quite frankly, making and collecting the money due you is what being in business is about!
For further information, you may contact Roy Miller at 503-655-1405, 10774 SE Highway 212, Clackamas, Oregon 97015-9164, or Roy@case-works.com