Posted by ray@lcorn on October 15, 2009 at 11:10:18:
In Reply to: Attorney's/Contractors posted by Casey on October 14, 2009 at 20:13:16:
Hi Casey,
I deal with attorneys and other service professionals (e.g. accountants, engineers, architects, etc.) a lot, and generally have multiple ongoing relationships with several in each discipline. The reason is that there are times when I need a generalist, and others when I need specific expertise. The former is usually cheaper than the latter.
Look at it like choosing the proper tool for the job. If you use a specialist to perform general tasks its akin to swatting flies with a sledge hammer, besides the fact that you're overpaying for the job needed to be done. Conversely, using a generalist to deal with a complex situation that needs specialized advice can be ruinous to your deal, and your financial health.
I rarely ever question a bill after the fact. The time for the conversation is at the outset so that you know what to expect and the professional puts enough thought into the job to give you an educated guess, knowing that surprises are more the norm than the exception in this game. Ask for an estimate of fees up front, especially in the extremes of really simple deals and very complex. I've found that's where the most variance occurs. Once you've done a few deals with the same professional you'll know what to expect for the standard deal, but I still ask for estimates for the tricky deals.
With contractors we have always followed the three-bid rule, but with a twist. We don't generally do open bidding on contruction projects, and rarely use the lowest bidder. In my experience you get what you pay for, and the brain damage that comes with low bidders is above my pain threshhold.
We use an invited bid list, usually no more than five contractors, including a couple we know and a couple we don't, that might be recommended to us by an architect or engineer involved in the project.
Currently we're getting some of the best competitive bidding we've seen in years, but it's amazing to me how many contractors are still throwing out prices like it's 2007. Once we tell them how far out of scale they are about half will revise their bid, but some don't, especially if they're doing gov't projects. D.C. apparently hasn't gotten the memo that labor and materials are way cheaper in a recession... but that's another conversation.
For things like maintenance contracts and one-off repair jobs (e.g. parking lots, roofs, etc.) we get 2 to 3 competitive bids, and we check references closely. We also verify licensing, insurance and do as much background checking of the company and the principals as possible. We also insert 30-day cancellations into annual contracts, and require affirmative renewal on our part, as opposed to having to give notice to cancel an automatic renewal. (That's a favorite of the waste management companies, which just grates me to no end.)
ray