Consulting Fees

[John Albee]

Derek,

From my experiences I have to agree with seems to be the majority opinion of
the group.  Consultants more often then not save the client significant
amounts of money over full time employees.  Even with the higher pay, the
overhead is signifacantly less for the client considering that they do not
have to worry about taxes, benefits and whatnot.

In addition, a consulting company typically employes people that have
experience in different areas of their field which is another benefit to a
client.  If the company hires an employee, they only have gained the
knowlege of that one employee.  That same client using a consulting company
has access to knowledge of the whole company which is typically greater than
a single individual.

Also, like it or not consultants don't really sell their time, consultants
sell solutions.  Even on a minor repair issue such as the usual fixing of a
windows system, a consultant is selling a solution to their problem (which
takes the form of a non-working windows system).

On a final note, the fee that my company charges clients is very resonable
when you consider a few things.  A few things that I did not see mentioned
by others when speaking of unbillable time include the time invested in
learning about a company and field to better serve their needs, time on
phone with client (well, my company doesn't bill for this) and the time
spent thinking about the clients problems when not in their office.
Finally, individual consultants and consulting companies work incredibly
hard to exceed their clients expectations on a regular basis.  Im sure any
other consultant would agree that there is no such thing as a 9 to 5 day in
the consulting business.

Derek, I hope that you can at least see that consulting is not just computer
work, it is much, much more.


--
John Albee
Active Computing, Inc.
602.448.4528
John@aciaz.com


-----Original Message-----
From: plug-discuss-admin@lists.plug.phoenix.az.us
[mailto:plug-discuss-admin@lists.plug.phoenix.az.us]On Behalf Of Derek
Neighbors
Sent: Tuesday, March 05, 2002 10:56 AM
To: plug-discuss@lists.plug.phoenix.az.us
Subject: Re: Consulting Fees


> In case you haven't lived in the real world, most consultants are NOT
going
> to be billing clients based on a 40 hour work week. The actual number will
> be less than that, often far less if things are tight, and you have to pay
> the bills regardless. You're also expected to keep your skill honed in
that
> same time, something that is not cheap in terms of time or money. Yeah,

Again we can agree to disagree.  I dont think a client should pay for ones
inability to find work (downtime) or training (after all if they need to
pay you to learn, why not pay one a staffer)

> The last profitable consulting outfit I worked for charged based on a 3.2
or
> higher multiplier. (My current outfit is in startup mode.) My salary X 3.2

Yeah that outfit need to make a profit off you as well as pay you etc
etc.. We call that gouging.

> Ah, well if we're going to snipe at each other here, let's see. When I'm
> called in, it's usually after some FTEs (aka "headcount") have been trying
> to get something done for months or years, and have failed miserably. We
> usually get the job done in less than 30 days, and most of that is spent
> waiting for the full timers to cover their asses and provide information
> they should've had at their fingertips. Considering the money that was
> wasted paying the dead weight, I think I'm a bargain. While I don't
actively

I think employees that dont perform should be cut.  But justifying cost
based on lazy employees is silly.

 > Slam my lifestyle, and I'll slam yours. Fun, ain't it?

Sure.  Generally, I dont take discussions personally you seem to.  I have
worked as an independent consultant as we well as a consultant for larger
consulting firms as well as a normal employee for both large and small
companies.

> If I go in and do a job that's going to save a client $100K+ a year, I
don't
> think the $30-60K (not me, my company) typically charges is "highway
> robbery". If they COULD do it themselves, they WOULD. We're far less than

As they get educated and are able to hire currently starving programmers
(according to this list) they will.  Just as people are leaving
proprietary software as they get educated.

> employees, and you don't have to pay us to keep our skills at a high
level.

Ok so which is it?  Should the companies factor in your cost your
'training'?  or are you saving them money because they dont have to keep
your skills at a high leve?  Im just curious?

 > OK I don't actually agree with that, but that's the the other side of
> Derek's rather insulting slam. It's not pleasant when somebody gets on
their
> stupid little soapbox and decides that the 15+ years I've spent in this
> business are only worth what they bring in themselves. It also explains
why
> this market is getting so nasty.

I do apologize if I insulted, soap box sure, but it wasnt meant as a
direct slam on anyone.

> Derek, it's very good of you to decide what constitutes "enough" for your
> fellow professionals. However, I wouldn't be billed at what I am if I
> weren't delivering VALUE.

Well I was a 'high paid' consultant at one time and stopped because I felt
it unethical.  I developed proprietary software at one time and stopped
because I felt unethical.  Now I consultant often for free to non-profits,
schools and small business and work as a salaried employee for which I
used to consult.

-Derek

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