8 ms·

If you need the money, don't take the job

271 points by gus_leonel 2y ago

cushpush 2y ago
>So it’s about being reassuringly expensive. > It really is. You have to actually be good at what you’re doing too, of course, or the whole scheme falls apart. What the client’s money really buys, though, is that delightful feeling of making the thing somebody else’s problem. You know, we’ve turned it all over to a top-tier expert, and now we just don’t have to think about it anymore. The more that person charges, the more reassured the client feels. Great advice.
- dgfitz 2y ago
  I don’t know why, but I wish the author had done an sed s/scheme/concept Edit: to be clear, it’s a fine word choice. It just jumped out at me.
  - dceddia 2y ago
    I felt the same. I took that as a bit of the author’s impostor syndrome showing through (perhaps feeling, even after all this time, that charging what he’s worth feels dishonest somehow).
  - mstade 2y ago
    I agree. Scheme sounds like its some kind of evil plot, but truly it’s just a matter of mutual respect between the consultant and client, and – crucially – the consultant’s self respect. Poor word choice aside, the advice really is solid. I’ve been a consultant for nearly 20 years, the last 10 as an independent, and it took many years of screwing this up before coming to mostly the same conclusions.
  - hn_version_0023 2y ago
    Schemes are inherently dishonest IMO. That’s the entire reason.
    - hiatus 2y ago
      At least in the UK people use it to describe things like pension plans. I don't think it's inherently unsavory.
      - deleted 2y ago
        [deleted]
    - mrob 2y ago
      The references to Land Rover and Doctor Who make me think the author is British. In British English, "scheme" does not usually have negative connotations.
      - hn_version_0023 2y ago
        Looks like I’ve outed myself as a provincial rube! Fair point; thanks
  - gausswho 2y ago
    My understanding is this preference is a little known schism in Britishisms and American English. In American English, a scheme is an unscrupulous, nefarious plan villains make. Often accompanied with riotous laughter. In British English, it's more general. Like a plan, but with superficial consensus and often spreadsheets. Trees die, but people don't. You see this neutral usage in government discussion regularly. It also reminds me: Europeans speaking English often use 'simple' before they start demonstrating things. Often painfully non-obvious things. Really boxes my ears. If it was simple I wouldn't be asking for an explanation and now you're insulting me.
    - alphabetter 2y ago
      Exactly this. As a British English speaker that works a lot with the US it was an early learning. In British English a "scheme" has no negative connotations. It's commonly used in all kinds of legitimate places - for example the company you work at will have a "pension scheme". In U.S. English it has a connotation that it is nefarious in some way.
      - sentientslug 2y ago
        Yeah, this always throws me off. In American English I’d always use the word “program” instead.
  - codersfocus 2y ago
    Neither concept nor plan are appropriate alternatives for scheme. Let's not argue with the inventors of the language on word choice.
    - dgfitz 2y ago
      I have no desire to argue. I like understanding things and I was hopeful to understand why I felt the way I did when I read that sentence. I learned a lot! I’m really grateful that people-who-weren’t-you read my question impartially and contributed their experiences.
- mr_toad 2y ago
  > making the thing somebody else’s problem. Do you keep a gardener on staff? Or hire one every couple of weeks? Or do you do it yourself? It all depends on the size and frequency of the job, your skill set, how much your time is worth, how old you are etc. The same applies to nearly every economic transaction on the planet. It’s always more expensive to have someone else do it. IT contracting shouldn’t be any different. Sometimes there’s a job that it makes no sense to try and do yourself, or have permanent staff do.
deleted 2y ago
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throwaway98797 2y ago
meh sometimes fixed pricing makes sense i’ve paid fixed pricing and i’ve taken fixed pricing it depends on the situation my favorite way to charge is on a per month basis if they start to abuse you, push back, if you can’t or they are good at manipulation leave also different people have different preferences for some the tracking of hours is painful, for others it’s comforting and fair meet the client or the consultant where they are at
- kjksf 2y ago
  In the context of the article, fixed pricing means pricing per project. Charging per month of work is not that.
  - Brian_K_White 2y ago
    They didn't suggest it was. They offered it as something that is neither fixed nor hourly.
- jermaustin1 2y ago
  I've done fixed pricing, but I also have an hours cap on that fixed pricing. I communicate how many hours are left in the project. Its less a fixed price deliverable, and more pre-buy some hours for a discounted rate. If the project is delivered and there are hours left, I came out ahead, if the hours run out, but I'm only a few hours from delivered, I will throw those in for free just to finish out the project.
  - throwaway98797 2y ago
    yep fixed with an implicit or explicit cap
- mstade 2y ago
  Fixed pricing can be fine, but requires a lot of due diligence with both parties, and much more detailed contracts and crucially – scope. Expectation management is key. (Btw, what you’re describing sounds more like a retainer which isn’t quite the same.) My experience is that fixed price only works for very short (days and weeks, not months) projects that can be scoped very strictly. Even then, there’s a lot of risk of miscommunication and uncomfortable discussions. My rule of thumb is that if I’m doing a fixed price contract, it can’t be longer than two weeks. This usually amounts to very targeted fixes, upgrades, research projects. Things that are typically not so hard to time box.
andai 2y ago
>The more they spend, the greater the kudos they’ll get from upstairs, and the bigger their budget will be next year. After all, the division with the most expensive problems must be the most important one in the company. I heard this is true in government, and it was presented as an example of why government has the wrong incentives, and private companies are much better: in a private company you get a bonus for being efficient and saving the company money, whereas in a government you get punished and they shrink your department. So I was surprised to see it presented here as a thing that happens in big companies too (but I've only worked with very small companies).
- sebzim4500 2y ago
  A lot of the stereotypical mistakes that governments made are also made by large businesses, but it's definitely to a lesser extent.
  - chomskyole 2y ago
    Having only worked at large businesses, I'd be keen to see some data on this. I would think that the incentives in large organisations are similar?
    - lazide 2y ago
      Large organizations have to at least pretend to try to make money - the gov’t has no such restriction. Also, the gov’t has a large scale, legally enforced monopoly.
      - stvltvs 2y ago
        Government orgs have public financial transparency that businesses don't. For example, when I worked for a public university, my salary was available on a publicly accessible website. Government budgets get a lot more outside scrutiny and pressure to avoid waste. It's not perfect. There's plenty of wasteful spending, but I wouldn't be surprised if research showed government and large businesses are similarly wasteful.
wouldbecouldbe 2y ago
Fixed pricing put lot of risk on the creator, but hourly pricing there is no risk. I prefer a proper balance of partially fixed, with a limit and out clauses, and then maintenance and further development on an hourly basis.
- mrbombastic 2y ago
  Could you give some examples of out clauses and limits? This sounds very appealing to me as someone who has gotten bit by the “one more thing” loop but has had a hard time selling hourly.
black_13 2y ago
[dead]
bryancoxwell 2y ago
The image at the top of this post led me to believe this would somehow be related to Golang? Editing to add: I did enjoy it regardless. Informative and well written.
pathfindershiva 2y ago
So you wrote the horrible career as book and pivoted to writing career :P
shoulderfake 2y ago
[dead]
osigurdson 2y ago
>> You know, take it slowly, invent problems and delays, anything to rack up a few extra hours I think this is a potential moral hazard with agile / scrum / mob programming, etc. It can have a tendency to minimize risk for the consultancy while maximizing billable hours.
Sytten 2y ago
The missing piece is retainers. They are IMO the cheat code of consultants because you can stack them and they are more stable. Being "available" has a price that way too many consultants don't charge for.
- dionys 2y ago
  it's an interesting point, could you please go into a bit more detail on how you structure the retainer (certain amount of hours per month)? How many you can stack and so on?
  - em-bee 2y ago
    i managed to change a multi year engagement that was billed hourly or by day into a fixed retainer. not knowing what to charge i simply asked the client to tell me what it was worth to him. he chose the amount that i earned with him in the past year. i accepted that, figuring that i would renegotiate if the work got more, or simply not be available for more work than what the retainer was worth to me. what happened in practice was that the work got less. this is circumstantial of course. it happened mainly because we both moved cities and were no longer able to work face-to-face. arguably that made my work more efficient as i no longer had to spend time to travel to the office and i could parallelize multiple things that i was working on. my effective hourly rate ended up being somewhere around $300-500. you can't charge that when billing hourly. i happily would have worked two or three times as much without asking for more.
  - 8organicbits 2y ago
    I've had concurrent retainers, but I'd avoid over-stacking them. Retainers are a liability, you could have multiple clients ask for hours simultaneously, and you'll suddenly be very busy. Weekly retainers are better than monthly because they smooth out the hours. Personally, I divide my availability into contracts and the more concurrent contracts I have, the more I pad for overhead. So one 40 hr/wk contract vs three 10 hr/wk contracts. It's possible to stack more, as often retainers aren't fully used, but I think it risks the relationship with clients, which is worth more than over scheduling yourself.
munchler 2y ago
I was a consultant for nearly a decade and far preferred fixed-price contracts, on the rare occasion we could get them. When you are paid hourly, you work at the customer’s whim, and are often treated like an employee, or worse. You are essentially just a body for rent. When you have a fixed price, you retain full autonomy. It’s up to you to decide the schedule, as long as you deliver on-time and within budget. The customer can’t change scope without your agreement. You feel like an actual human being.
- rascul 2y ago
  My experience is different. I have full autonomy whether I am paid hourly or a fixed rate for the job. Often I'll prefer hourly if it's hard for me to get an idea how long it will take.
- alsetmusic 2y ago
  I worked at a company where they'd switched from hourly billing to fixed costs not long before I'd joined. The incentive for the client was that there was no reason for the company to inflate job hours. The incentive for the company was to encourage longterm contracts for ongoing work. Seemed like a win for that particular environment. A bit different from an individual consultant, but an interesting case of comparing two models.
  - spwa4 2y ago
    I've found multiple times companies switch back from fixed price as soon as managers realize it is a very easy way to extract a lot of money from their employer via their cronies. Fixed price sounds like a great idea, but if you can't trust management, even middle management, it will rapidly turn into a disaster.
- _heimdall 2y ago
  I've found that whether I prefer fixed price or hourly depends heavily on the client. When the scope is clear and I have a feeling that the client won't be the demanding type with frequent, unplanned changes I often prefer fixed price. If the scope isn't clear though, or if I get a feeling there will be a lot of incoming change requests, I'll go hourly.
ITB 2y ago
As someone that has been on the hiring side, I always prefer to build a full time team, even if that means paying for someone in my team to learn something new. The part that consultants don’t talk about is that you have to pay them to learn your code / company too. Nobody can just jump in and add value immediately. So you’re paying for onboarding hours, you’re paying for other employees to educate the consultant, and so on. Likewise as an engineer, I think the most interesting projects and companies err towards primarily full time people. So if my goal is to work on the most interesting projects, I’d want to work full time. A lot of consultants, for example someone helping with SOC2 compliance, is mostly copy pasting a large document with recommendations and moving some paragraphs around based on interviews with the team. Not different from your average lawyer helping with an estate plan or will. The reality is that for many things you do want the cheapest lawyer, because the project is simple and repetitive. It’s the uneducated that pay more. So yes for a murder trial I want to pay a lot for a lawyer, but for small things I don’t, and you shouldn’t either. I simply don’t buy the analogy. Finally, while consulting might be good for cash flow to hours-worked efficiency, it’s not clear it will make a person wealthier than other forms of income. I’ve met rich employees, founders, but not so much independent consultants.
- deleted 2y ago
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- 2-3-7-43-1807 2y ago
  > So you’re paying for onboarding hours, you’re paying for other employees to educate the consultant, and so on. You also pay for the psychological friction and pressure that the consultant has to suffer from the fact that customer expects them to be geniuses with magical powers and the project managers planning the time line according to that.
  - agent281 2y ago
    If you're lucky and the consultant is experienced and has narrow scope, they can provide a lot of structure. They will also push back where applicable. If they have a wide scope and/or they don't have much experience, you are 100% correct that they have to figure it out like anyone else.
mrbombastic 2y ago
This all sounds very appealing on the consultant side but I am not very convinced on the buyer side. The argument that with hourly you can get rid of consultants faster might work on people with medium to large budgets but fixed pricing has the guarantee that at least at the end I have X or I don’t have to pay. People with small budgets often don’t even have the money to burn testing out a consultant with nothing to show for it.
- mckn1ght 2y ago
  I don’t know how it’s typically done but if I’m taking a fixed cost project as a consultant I’d ask for some portion up front. If you can’t even put up a portion or pay for the first few hours then how are you gonna pay for the actual project? If (not when) it starts making money? Might as well look for a “cofounder engineer” willing to work for equity.
asah 2y ago
Fixed price works great if the client's expectations are easy to meet and you've done the work many times before in a fraction of the time that others would take by the hour.
Winsaucerer 2y ago
> A fixed-price deal sets up the wrong incentive structure. It’s in the client’s interest to agree the lowest price possible, and then to squeeze the consultant for every drop of juice they can get. So that sucks. > > On the other hand, it’s in the consultant’s interest to do the quickest and cheapest work necessary to get the client to sign off on the job. After that, they have zero incentive to fix any problems that arise. It’s just bad news all round. I don't agree with this at all. If you give a fixed price contract that includes bug fixes for a period, then your incentives are well aligned. - You want to release robust code (to avoid warranty bug fixes), and your client wants that too. - You want to finish quickly to get final payment sooner, and your client wants it finished quickly too. - You set the price to what it needs to be and you'd be happy with, and if it's too rich for the client, you just don't take the job (does require you to be in a situation where you can reject underpriced projects, and requires you to be good at quoting). - Client shouldn't care if you took half the hours you estimated, and they don't need to know. You both agreed to a price that works for you both, so ideally both sides have had a winning experience. I have had experience with a client that tried to squeeze every drop of juice, and that sucked. They had no choice though because their budget was completely unmovable (came from grants). My thinking is that it's probably best to prune such clients when you can, and stick with those whose expectations align well with your way of working. Not every client tries to squeeze every last feature out of you. Hourly is easy for the seller, but it's a sucky experience for the client. It builds distrust, and unlike fixed price, I think it's actually hourly pricing that misaligns incentives. I also don't like the social aspect. E.g., where people question how you're spending your hours, or you have a chat about the weekend don't know whether to make it clear that you're not billing for that time, etc.
cudgy 2y ago
“And, so they know what they’re in for, I’ll give them a careful and realistic estimate of how many hours it’ll take to deliver what they’ve asked for. That gives them the cost control they need, but doesn’t commit them to the whole sum right away.” Do you get paid for estimating? To properly estimate takes a good deal of time.
adamtaylor_13 2y ago
I own a software studio that exclusively does fixed-price engagements. In fact, it’s a selling point to most of our clients. Hourly-billing benefits no one.
punduk 2y ago
That's exactly how companies that sell consulting work. No bargaining, you have to pay millions of dollars for enterprise software nonsense.
anovikov 2y ago
TL;DR: If money is an object for a client, look for another client.
karaterobot 2y ago
> What the client’s money really buys, though, is that delightful feeling of making the thing somebody else’s problem. You know, we’ve turned it all over to a top-tier expert, and now we just don’t have to think about it anymore. The more that person charges, the more reassured the client feels. The way it was phrased to me was "they're paying for your confidence". Confidence that you can just come in and get the job done without too much trouble for them. That was pretty much the best advice I got as a consultant. His advice about doubling what you think your rate should be is also good, and when my company started doing that, we didn't lose clients, instead we moved up-market and actually ended up working with better clients on much more interesting projects. I think both nuggets of wisdom are of a piece: act like you're an expert that is paid commensurate with your success rate. Of course, you have to back it up, but isn't that an implementation detail?
neilv 2y ago
> Clients who want a discount always turn out to be the worst clients, if you cave in to them. By offering you less, they’re really saying “We don’t think you’re worth what you’re asking.” You don’t want to work for someone who sees you that way. Sometimes it's the job of someone, like in Procurement, to try to get a better price from a vendor, regardless of what value the company thinks they're getting. But unless they think you're a commodity that they know they can get from another vendor, they can't push back too much. Other times (IME as an independent technical consultant), the executive/manager hiring you, who has some sense of your value, has to make a case to someone else, about why your rate is worth it. This can be due to sticker shock, or can be something they have to justify on government contracts. So they might ask for help with this case, subtly or directly. Like putting together a bio, itemizing some credentials, or answering specific regulation-based questions to make sure you qualify for some grade or exemption. IME, that's never been a negotiating tactic, and always worked out, getting the work with no discount of rate. (Just anecdata; I don't claim to be an expert at the business of consulting. I generally delivered very high value, like few people could, and some clients got a great deal, while I also turned down a lot of work where the client thought they had commodity needs. I could've addressed this by growing a consulting firm, hiring "associates", who I supervised and mentored as a "partner". But, rather than sell difficult-to-value billable hours from a distance, I'd prefer to build tech startups as a founder, where I can be holistic on an entire product/business, and reap bigger rewards if successful.)
lionelholt 2y ago
If my 2002 Land Rover Discovery II is vintage enough, I will gladly pay you to tinker with it, the next time you're in Oregon USA that is!
Thorrez 2y ago
>Unless you really can’t survive without that client, don’t take them on. Jerry Weinberg also says “If you need the money, don’t take the job.” Don't those 2 sentences contradict each other?
Manuellanzini 2y ago
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271 points by gus_leonel 2y ago

>So it’s about being reassuringly expensive. > It really is. You have to actually be good at what you’re doing too, of course, or the whole scheme falls apart. What the client’s money really buys, though, is that delightful feeling of making the thing somebody else’s problem. You know, we’ve turned it all over to a top-tier expert, and now we just don’t have to think about it anymore. The more that person charges, the more reassured the client feels. Great advice.

dgfitz 2y ago
I don’t know why, but I wish the author had done an sed s/scheme/concept Edit: to be clear, it’s a fine word choice. It just jumped out at me.
- dceddia 2y ago
  I felt the same. I took that as a bit of the author’s impostor syndrome showing through (perhaps feeling, even after all this time, that charging what he’s worth feels dishonest somehow).
- mstade 2y ago
  I agree. Scheme sounds like its some kind of evil plot, but truly it’s just a matter of mutual respect between the consultant and client, and – crucially – the consultant’s self respect. Poor word choice aside, the advice really is solid. I’ve been a consultant for nearly 20 years, the last 10 as an independent, and it took many years of screwing this up before coming to mostly the same conclusions.
- hn_version_0023 2y ago
  Schemes are inherently dishonest IMO. That’s the entire reason.
  - hiatus 2y ago
    At least in the UK people use it to describe things like pension plans. I don't think it's inherently unsavory.
    - deleted 2y ago
      [deleted]
  - mrob 2y ago
    The references to Land Rover and Doctor Who make me think the author is British. In British English, "scheme" does not usually have negative connotations.
    - hn_version_0023 2y ago
      Looks like I’ve outed myself as a provincial rube! Fair point; thanks
- gausswho 2y ago
  My understanding is this preference is a little known schism in Britishisms and American English. In American English, a scheme is an unscrupulous, nefarious plan villains make. Often accompanied with riotous laughter. In British English, it's more general. Like a plan, but with superficial consensus and often spreadsheets. Trees die, but people don't. You see this neutral usage in government discussion regularly. It also reminds me: Europeans speaking English often use 'simple' before they start demonstrating things. Often painfully non-obvious things. Really boxes my ears. If it was simple I wouldn't be asking for an explanation and now you're insulting me.
  - alphabetter 2y ago
    Exactly this. As a British English speaker that works a lot with the US it was an early learning. In British English a "scheme" has no negative connotations. It's commonly used in all kinds of legitimate places - for example the company you work at will have a "pension scheme". In U.S. English it has a connotation that it is nefarious in some way.
    - sentientslug 2y ago
      Yeah, this always throws me off. In American English I’d always use the word “program” instead.
- codersfocus 2y ago
  Neither concept nor plan are appropriate alternatives for scheme. Let's not argue with the inventors of the language on word choice.
  - dgfitz 2y ago
    I have no desire to argue. I like understanding things and I was hopeful to understand why I felt the way I did when I read that sentence. I learned a lot! I’m really grateful that people-who-weren’t-you read my question impartially and contributed their experiences.
mr_toad 2y ago
> making the thing somebody else’s problem. Do you keep a gardener on staff? Or hire one every couple of weeks? Or do you do it yourself? It all depends on the size and frequency of the job, your skill set, how much your time is worth, how old you are etc. The same applies to nearly every economic transaction on the planet. It’s always more expensive to have someone else do it. IT contracting shouldn’t be any different. Sometimes there’s a job that it makes no sense to try and do yourself, or have permanent staff do.

deleted 2y ago

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throwaway98797 2y ago

meh sometimes fixed pricing makes sense i’ve paid fixed pricing and i’ve taken fixed pricing it depends on the situation my favorite way to charge is on a per month basis if they start to abuse you, push back, if you can’t or they are good at manipulation leave also different people have different preferences for some the tracking of hours is painful, for others it’s comforting and fair meet the client or the consultant where they are at

kjksf 2y ago
In the context of the article, fixed pricing means pricing per project. Charging per month of work is not that.
- Brian_K_White 2y ago
  They didn't suggest it was. They offered it as something that is neither fixed nor hourly.
jermaustin1 2y ago
I've done fixed pricing, but I also have an hours cap on that fixed pricing. I communicate how many hours are left in the project. Its less a fixed price deliverable, and more pre-buy some hours for a discounted rate. If the project is delivered and there are hours left, I came out ahead, if the hours run out, but I'm only a few hours from delivered, I will throw those in for free just to finish out the project.
- throwaway98797 2y ago
  yep fixed with an implicit or explicit cap
mstade 2y ago
Fixed pricing can be fine, but requires a lot of due diligence with both parties, and much more detailed contracts and crucially – scope. Expectation management is key. (Btw, what you’re describing sounds more like a retainer which isn’t quite the same.) My experience is that fixed price only works for very short (days and weeks, not months) projects that can be scoped very strictly. Even then, there’s a lot of risk of miscommunication and uncomfortable discussions. My rule of thumb is that if I’m doing a fixed price contract, it can’t be longer than two weeks. This usually amounts to very targeted fixes, upgrades, research projects. Things that are typically not so hard to time box.

andai 2y ago

>The more they spend, the greater the kudos they’ll get from upstairs, and the bigger their budget will be next year. After all, the division with the most expensive problems must be the most important one in the company. I heard this is true in government, and it was presented as an example of why government has the wrong incentives, and private companies are much better: in a private company you get a bonus for being efficient and saving the company money, whereas in a government you get punished and they shrink your department. So I was surprised to see it presented here as a thing that happens in big companies too (but I've only worked with very small companies).

sebzim4500 2y ago
A lot of the stereotypical mistakes that governments made are also made by large businesses, but it's definitely to a lesser extent.
- chomskyole 2y ago
  Having only worked at large businesses, I'd be keen to see some data on this. I would think that the incentives in large organisations are similar?
  - lazide 2y ago
    Large organizations have to at least pretend to try to make money - the gov’t has no such restriction. Also, the gov’t has a large scale, legally enforced monopoly.
    - stvltvs 2y ago
      Government orgs have public financial transparency that businesses don't. For example, when I worked for a public university, my salary was available on a publicly accessible website. Government budgets get a lot more outside scrutiny and pressure to avoid waste. It's not perfect. There's plenty of wasteful spending, but I wouldn't be surprised if research showed government and large businesses are similarly wasteful.

wouldbecouldbe 2y ago

Fixed pricing put lot of risk on the creator, but hourly pricing there is no risk. I prefer a proper balance of partially fixed, with a limit and out clauses, and then maintenance and further development on an hourly basis.

mrbombastic 2y ago
Could you give some examples of out clauses and limits? This sounds very appealing to me as someone who has gotten bit by the “one more thing” loop but has had a hard time selling hourly.

black_13 2y ago

[dead]

bryancoxwell 2y ago

The image at the top of this post led me to believe this would somehow be related to Golang? Editing to add: I did enjoy it regardless. Informative and well written.

pathfindershiva 2y ago

So you wrote the horrible career as book and pivoted to writing career :P

shoulderfake 2y ago

[dead]

osigurdson 2y ago

>> You know, take it slowly, invent problems and delays, anything to rack up a few extra hours I think this is a potential moral hazard with agile / scrum / mob programming, etc. It can have a tendency to minimize risk for the consultancy while maximizing billable hours.

Sytten 2y ago

The missing piece is retainers. They are IMO the cheat code of consultants because you can stack them and they are more stable. Being "available" has a price that way too many consultants don't charge for.

dionys 2y ago
it's an interesting point, could you please go into a bit more detail on how you structure the retainer (certain amount of hours per month)? How many you can stack and so on?
- em-bee 2y ago
  i managed to change a multi year engagement that was billed hourly or by day into a fixed retainer. not knowing what to charge i simply asked the client to tell me what it was worth to him. he chose the amount that i earned with him in the past year. i accepted that, figuring that i would renegotiate if the work got more, or simply not be available for more work than what the retainer was worth to me. what happened in practice was that the work got less. this is circumstantial of course. it happened mainly because we both moved cities and were no longer able to work face-to-face. arguably that made my work more efficient as i no longer had to spend time to travel to the office and i could parallelize multiple things that i was working on. my effective hourly rate ended up being somewhere around $300-500. you can't charge that when billing hourly. i happily would have worked two or three times as much without asking for more.
- 8organicbits 2y ago
  I've had concurrent retainers, but I'd avoid over-stacking them. Retainers are a liability, you could have multiple clients ask for hours simultaneously, and you'll suddenly be very busy. Weekly retainers are better than monthly because they smooth out the hours. Personally, I divide my availability into contracts and the more concurrent contracts I have, the more I pad for overhead. So one 40 hr/wk contract vs three 10 hr/wk contracts. It's possible to stack more, as often retainers aren't fully used, but I think it risks the relationship with clients, which is worth more than over scheduling yourself.

munchler 2y ago

I was a consultant for nearly a decade and far preferred fixed-price contracts, on the rare occasion we could get them. When you are paid hourly, you work at the customer’s whim, and are often treated like an employee, or worse. You are essentially just a body for rent. When you have a fixed price, you retain full autonomy. It’s up to you to decide the schedule, as long as you deliver on-time and within budget. The customer can’t change scope without your agreement. You feel like an actual human being.

rascul 2y ago
My experience is different. I have full autonomy whether I am paid hourly or a fixed rate for the job. Often I'll prefer hourly if it's hard for me to get an idea how long it will take.
alsetmusic 2y ago
I worked at a company where they'd switched from hourly billing to fixed costs not long before I'd joined. The incentive for the client was that there was no reason for the company to inflate job hours. The incentive for the company was to encourage longterm contracts for ongoing work. Seemed like a win for that particular environment. A bit different from an individual consultant, but an interesting case of comparing two models.
- spwa4 2y ago
  I've found multiple times companies switch back from fixed price as soon as managers realize it is a very easy way to extract a lot of money from their employer via their cronies. Fixed price sounds like a great idea, but if you can't trust management, even middle management, it will rapidly turn into a disaster.
_heimdall 2y ago
I've found that whether I prefer fixed price or hourly depends heavily on the client. When the scope is clear and I have a feeling that the client won't be the demanding type with frequent, unplanned changes I often prefer fixed price. If the scope isn't clear though, or if I get a feeling there will be a lot of incoming change requests, I'll go hourly.

ITB 2y ago

As someone that has been on the hiring side, I always prefer to build a full time team, even if that means paying for someone in my team to learn something new. The part that consultants don’t talk about is that you have to pay them to learn your code / company too. Nobody can just jump in and add value immediately. So you’re paying for onboarding hours, you’re paying for other employees to educate the consultant, and so on. Likewise as an engineer, I think the most interesting projects and companies err towards primarily full time people. So if my goal is to work on the most interesting projects, I’d want to work full time. A lot of consultants, for example someone helping with SOC2 compliance, is mostly copy pasting a large document with recommendations and moving some paragraphs around based on interviews with the team. Not different from your average lawyer helping with an estate plan or will. The reality is that for many things you do want the cheapest lawyer, because the project is simple and repetitive. It’s the uneducated that pay more. So yes for a murder trial I want to pay a lot for a lawyer, but for small things I don’t, and you shouldn’t either. I simply don’t buy the analogy. Finally, while consulting might be good for cash flow to hours-worked efficiency, it’s not clear it will make a person wealthier than other forms of income. I’ve met rich employees, founders, but not so much independent consultants.

deleted 2y ago
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2-3-7-43-1807 2y ago
> So you’re paying for onboarding hours, you’re paying for other employees to educate the consultant, and so on. You also pay for the psychological friction and pressure that the consultant has to suffer from the fact that customer expects them to be geniuses with magical powers and the project managers planning the time line according to that.
- agent281 2y ago
  If you're lucky and the consultant is experienced and has narrow scope, they can provide a lot of structure. They will also push back where applicable. If they have a wide scope and/or they don't have much experience, you are 100% correct that they have to figure it out like anyone else.

mrbombastic 2y ago

This all sounds very appealing on the consultant side but I am not very convinced on the buyer side. The argument that with hourly you can get rid of consultants faster might work on people with medium to large budgets but fixed pricing has the guarantee that at least at the end I have X or I don’t have to pay. People with small budgets often don’t even have the money to burn testing out a consultant with nothing to show for it.

mckn1ght 2y ago
I don’t know how it’s typically done but if I’m taking a fixed cost project as a consultant I’d ask for some portion up front. If you can’t even put up a portion or pay for the first few hours then how are you gonna pay for the actual project? If (not when) it starts making money? Might as well look for a “cofounder engineer” willing to work for equity.

asah 2y ago

Fixed price works great if the client's expectations are easy to meet and you've done the work many times before in a fraction of the time that others would take by the hour.

Winsaucerer 2y ago

> A fixed-price deal sets up the wrong incentive structure. It’s in the client’s interest to agree the lowest price possible, and then to squeeze the consultant for every drop of juice they can get. So that sucks. > > On the other hand, it’s in the consultant’s interest to do the quickest and cheapest work necessary to get the client to sign off on the job. After that, they have zero incentive to fix any problems that arise. It’s just bad news all round. I don't agree with this at all. If you give a fixed price contract that includes bug fixes for a period, then your incentives are well aligned. - You want to release robust code (to avoid warranty bug fixes), and your client wants that too. - You want to finish quickly to get final payment sooner, and your client wants it finished quickly too. - You set the price to what it needs to be and you'd be happy with, and if it's too rich for the client, you just don't take the job (does require you to be in a situation where you can reject underpriced projects, and requires you to be good at quoting). - Client shouldn't care if you took half the hours you estimated, and they don't need to know. You both agreed to a price that works for you both, so ideally both sides have had a winning experience. I have had experience with a client that tried to squeeze every drop of juice, and that sucked. They had no choice though because their budget was completely unmovable (came from grants). My thinking is that it's probably best to prune such clients when you can, and stick with those whose expectations align well with your way of working. Not every client tries to squeeze every last feature out of you. Hourly is easy for the seller, but it's a sucky experience for the client. It builds distrust, and unlike fixed price, I think it's actually hourly pricing that misaligns incentives. I also don't like the social aspect. E.g., where people question how you're spending your hours, or you have a chat about the weekend don't know whether to make it clear that you're not billing for that time, etc.

cudgy 2y ago

“And, so they know what they’re in for, I’ll give them a careful and realistic estimate of how many hours it’ll take to deliver what they’ve asked for. That gives them the cost control they need, but doesn’t commit them to the whole sum right away.” Do you get paid for estimating? To properly estimate takes a good deal of time.

adamtaylor_13 2y ago

I own a software studio that exclusively does fixed-price engagements. In fact, it’s a selling point to most of our clients. Hourly-billing benefits no one.

punduk 2y ago

That's exactly how companies that sell consulting work. No bargaining, you have to pay millions of dollars for enterprise software nonsense.

anovikov 2y ago

TL;DR: If money is an object for a client, look for another client.

karaterobot 2y ago

> What the client’s money really buys, though, is that delightful feeling of making the thing somebody else’s problem. You know, we’ve turned it all over to a top-tier expert, and now we just don’t have to think about it anymore. The more that person charges, the more reassured the client feels. The way it was phrased to me was "they're paying for your confidence". Confidence that you can just come in and get the job done without too much trouble for them. That was pretty much the best advice I got as a consultant. His advice about doubling what you think your rate should be is also good, and when my company started doing that, we didn't lose clients, instead we moved up-market and actually ended up working with better clients on much more interesting projects. I think both nuggets of wisdom are of a piece: act like you're an expert that is paid commensurate with your success rate. Of course, you have to back it up, but isn't that an implementation detail?

neilv 2y ago

> Clients who want a discount always turn out to be the worst clients, if you cave in to them. By offering you less, they’re really saying “We don’t think you’re worth what you’re asking.” You don’t want to work for someone who sees you that way. Sometimes it's the job of someone, like in Procurement, to try to get a better price from a vendor, regardless of what value the company thinks they're getting. But unless they think you're a commodity that they know they can get from another vendor, they can't push back too much. Other times (IME as an independent technical consultant), the executive/manager hiring you, who has some sense of your value, has to make a case to someone else, about why your rate is worth it. This can be due to sticker shock, or can be something they have to justify on government contracts. So they might ask for help with this case, subtly or directly. Like putting together a bio, itemizing some credentials, or answering specific regulation-based questions to make sure you qualify for some grade or exemption. IME, that's never been a negotiating tactic, and always worked out, getting the work with no discount of rate. (Just anecdata; I don't claim to be an expert at the business of consulting. I generally delivered very high value, like few people could, and some clients got a great deal, while I also turned down a lot of work where the client thought they had commodity needs. I could've addressed this by growing a consulting firm, hiring "associates", who I supervised and mentored as a "partner". But, rather than sell difficult-to-value billable hours from a distance, I'd prefer to build tech startups as a founder, where I can be holistic on an entire product/business, and reap bigger rewards if successful.)

lionelholt 2y ago

If my 2002 Land Rover Discovery II is vintage enough, I will gladly pay you to tinker with it, the next time you're in Oregon USA that is!

Thorrez 2y ago

>Unless you really can’t survive without that client, don’t take them on. Jerry Weinberg also says “If you need the money, don’t take the job.” Don't those 2 sentences contradict each other?

Manuellanzini 2y ago

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