The Consultant - 2010 - (Page 27)

CONSULTANT’S FORUM Where Are the Conflicts of Interest in Timber Sale Fees? BY STEPHEN E. JAQUITH, CF, ACF BACKGROUND AND PURPOSE Over the years many interested people, including a number of consulting foresters, have expressed their strong opinions on the topic of charging percentage-based commissions for the professional forestry services involved in conducting timber sales. We’ll summarize some of that discussion here, but our main purpose is to see if it might be helpful for the profession to more clearly identify at which steps in the process confl icts of interest are perceived to exist. To keep things clear, we are not discussing salvage operations, forced liquidations, land conversions, etc. We’re discussing everyday forestry, where good long-term timber management is one of the landowner’s goals. Let’s acknowledge from the start that there is no perfect method for determining professional fees. (Other professions certainly have difficulties of their own.) Let’s also agree that no method necessarily results in poor forestry, and that obviously no method can guarantee good performance. We’re here to neither make accusations nor wring our hands over a dilemma. The hope is that we might gain a bit more clarity by looking closely at the steps involved in conducting a timber sale on behalf of a client. Perhaps we’ll be able to see how others perceive this transaction, too. Let’s explore the trade-offs involved in determining how to charge for a specific type of forestry service. LIMITING THE DISCUSSION There are all kinds of timber sales, conducted for many purposes. For the sake of clarity and simplicity, we are going to consider only one situation: an intermediate silvicultural cutting in a mixed hardwood stand, where long-term value increase and a periodic income stream are among the goals. The stand has been high-graded in the past and there is much work to do to make it more productive. There is a wide variety of quality, value and growth rates among the various species. We’re also assuming that the forestry fi rm providing the timber sale services has not guaranteed that it will conduct the next timber sale in the stand that is being treated. This might be the only time the forester will be working in this stand. We are not considering a land ethic or similar concerns. We’re keeping our focus on the relatively narrow issue of how consulting forestry fi rms determine their fees for timber sale services, and what this might mean for the profession. THE CONSULTANT 2010 27

Table of Contents for the Digital Edition of The Consultant - 2010

Executive Director’s Message
President’s Message
Putting Forests, Forestry and Forest Products on the Nation’s Agenda
The Average American Family Forest Owner
Growing Your Business in the Current Recession
Engaging Family Woodland Owners: A Social Marketing Approach
Making Numbers Tell the Truth
Where Are the Conflicts of Interest in Timber Sale Fees?
Marketing Your Business
Income Tax on Cost Share Payment from the Forest Health Protection Program
Improving Appraisals for Tax Reporting Purposes
Expert Witnessing
Meet Paddy Bruton… Again
Being Jim Spitz
The View from the Rockies
Musings of an Endangered Species, or What to do After the Rapture

The Consultant - 2010