[HN Gopher] The billable hour is a trap into which more and more...
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The billable hour is a trap into which more and more of us are
falling
Author : AndrewDucker
Score : 71 points
Date : 2022-05-26 19:15 UTC (3 hours ago)
(HTM) web link (timharford.com)
(TXT) w3m dump (timharford.com)
| gsibble wrote:
| I've been paid high hourly wages to build software and you
| definitely start to look at every minute of non-billable time as,
| "I could have made X in these 3 hours I spent relaxing." Leads to
| overwork. There's a healthy balance but took me a while to find
| it.
| radoomi wrote:
| Exactly in the same spot, I've recently gone freelance where
| I'm paid by the hour and I've yet to take a holiday cause I
| always think this week of holiday will cost me $$$ (huge amount
| of money compared to what a normal one week holiday would
| cost). Sadly, I will probably burnout soon and ignore that
| thought.
| heavyset_go wrote:
| Start charging day, week and month rates, along with retainer
| rates. For projects and clients you're confident in
| satisfying, also consider fixed prices for deliverables,
| revenue sharing deals, etc.
| simmons wrote:
| > _I 've yet to take a holiday cause I always think this week
| of holiday will cost me $$$_
|
| I'm a long-time hourly freelancer, and it's absolutely true -
| the lack of revenue for that period will indeed cost you
| money. But not taking the holiday will cost you a vacation. I
| personally think about the value lost from not working, and
| the value gained from the vacation, and usually conclude that
| taking the vacation is the clear winner. It's all about
| establishing a proper value system and being honest with
| yourself about it.
| rwky wrote:
| I used charge hourly years ago. I had the same problem where
| taking a holiday made me think about losing money. Now I
| charge a monthly rate based on the number of days a week I
| work (roughly equating one month to 4 weeks, granted they're
| not but it makes life easier). Now I don't worry about taking
| time off because once I've clocked my days for that week I'm
| done I won't get paid more. It also means you know exactly
| what your income will be each month which is handy for
| budgeting.
| MrRiddle wrote:
| I took this list to gauge how many hours I want to work per
| year, and decided that 1500-1600 hours is enough, if it's
| not, then the rate should be higher.
|
| https://en.m.wikipedia.org/wiki/List_of_countries_by_average.
| ..
| magicink81 wrote:
| Jonathan Stark is a thought leader / coach / writer / blogger etc
| that has been beating the drum on time-based pricing vs value-
| based pricing. He helps software engineers and others get off the
| time-based model and transition to value-based.
|
| Here's his website: https://jonathanstark.com/
|
| Here are some interviews where he covers the topic
| https://www.youtube.com/watch?v=UT32G9wmONg
| https://www.youtube.com/watch?v=B1b7QlQILRo
| aosaigh wrote:
| I'm a big fan of Jonathan Stark. As well as value-pricing he
| has lots of great content on writing proposals, developing
| productised services, moving to advisory roles etc. He has two
| podcasts that are worth listening to, The Business of Authority
| [0] and Ditching Hourly [1]
|
| [0] https://www.thebusinessofauthority.com/ [1]
| https://podcast.ditchinghourly.com/
| MisterBastahrd wrote:
| My side gig is that I have a few clients who pay me $1K a month
| for 10 hours of retainer. Most months, I barely put in 3 hours.
| A few, I might work 12 and I don't charge them because
| everyone's happy. They realize I have a day job and as such,
| I'm not going to be immediately available unless I can take a
| lunch break. A win for everyone.
| simmons wrote:
| I've been working as a freelancer for many years, billing hourly.
| I have absolutely no hesitation to take vacations. If anything,
| it makes me more likely to take a few more days off, since I
| don't feel bad about a client paying me for that time. I
| routinely take months-long sabbaticals between gigs, and use them
| to learn new things. I take extra long vacations over the winter
| holidays.
|
| If someone is feeling an urgency to work more hours beyond what
| provides true value for their life, the problem isn't how one's
| invoices are arranged. The problem is one's attitude.
| themitigating wrote:
| I agree but sometimes fear can play a role. What if the economy
| goes down? What if I can't find work?
|
| It might be very hard to ignore the nagging danger of poverty
| especially if you are in America.
| sph wrote:
| You need to include all that risk in your hourly rate,
| otherwise you're being severely underpaid.
| gnicholas wrote:
| Another downside of the billable hour: it encourages perverse
| incentives. I was recently talking with a potential customer in
| the legal field, and he was interested in my startup's software,
| which helps people read on screen more quickly/easily. But at one
| point he turned to me and said "I know one of the senior lawyers
| is going to ask me if using your software is going to cause the
| billable volume to go down for their associates. I know that
| sounds like a silly question, but how should I answer?"
|
| In short, efficiency is discouraged when dollars are on the line.
| lotsofpulp wrote:
| From the other side of the table, efficiency is encouraged when
| dollars are on the line too. A buyer is going to prefer a law
| firm that minimizes expenses.
|
| It is not like the law firm has a choice to keep using pen and
| paper to bill 100x the number of hours as others. They have to
| compete with other law firms.
| tomatowurst wrote:
| Does anybody make $1000 USD / hr? What is your day to day like?
| How many clients do you have and how many hours do you bill per
| year? Do you actually work 2087 hours per year which would net
| you $2MM/year?
|
| I'm curious how some people are able to bill such high amounts
| and how they got started. It must also be extra stressful since
| its not like you are working for a company either so you need to
| do marketing and find clients as well.
| [deleted]
| D13Fd wrote:
| It's not uncommon in my field. And quite a few of the people
| billing that rate or higher actually net greater than $2m,
| because they get credit not only for what they bill but what
| work they bring in for others to bill.
|
| That said, $1k/hr billed does not directly translate to $1k/hr
| earned. Usually there is shared overhead, etc taken out first.
| executive wrote:
| More like bill one client $1000/hr for travel and work on
| another client's $1000/hr case during the trip. /nojoke
| slagfart wrote:
| As a couterpoint, I've never been happier than at my current role
| where I'm expected to put in 40 hours per week, and not a minute
| more. Sure I do timesheets, but they cap at 40 hours.
|
| Prior jobs always had the implicit expectation that I could be
| working a little harder, or clocking off early on a Friday was
| evil. Now, 40 hours a week can be done any time, and that
| flexibility is hugely liberating. I honestly think they get more
| out of me as well.
| formerkrogemp wrote:
| I'm just going to say that the billable hour sucks in accounting
| and I hope i never have to keep (to lie) on a timesheet again for
| awhile to meet the "budget."
| RcouF1uZ4gsC wrote:
| > But I don't think I'm over-romanticising to suggest that just
| as there is something psychologically corrosive about the fact
| that the lawyer can always bill another six minutes, there is
| something psychologically healthy about the fact that the farmer
| can sometimes rest assured that there is nothing useful to be
| done until the morning.
|
| This sense of a "forced" break from work, reminds me of the
| Jewish concept of the Sabbath.
|
| You were literally forbidden from productive work, 1 day a week.
|
| So this forced time for reflection, spiritual care, and time with
| family.
| jrochkind1 wrote:
| "were"? There's still Jews who do this of course!
| pure_simplicity wrote:
| As are some Christian denominations such as seventh-day
| baptists and seventh-day adventists (and some lesser known
| ones).
| blendergeek wrote:
| And many Christians observe a sabath day's rest on Sunday.
| adamzerner wrote:
| Related: Bring Back the Sabbath
| (https://thezvi.wordpress.com/2017/10/07/bring-back-the-
| sabba...)
| InefficientRed wrote:
| The loss of the sabbath in Christianity really puts a limelight
| on the dark side of grace. Rest is for eternity; clock back in.
| humanrebar wrote:
| A lot of Christians still do some sort of Sabbath. It could
| be a sin to skip the Sabbath, even, depending on the
| theology. But the definition of sin in some theologies can be
| quite broad, personal, and circumstantial.
| invalidOrTaken wrote:
| As a Christian who observes the Sabbath---is this not common
| among Christians? (I am genuinely asking, somewhat
| disconnected from the wider world of Christianity)
| sph wrote:
| In my experience projects tend to go over specifications pretty
| much every time. Fixed billing means having to review the
| contract every so often, and it's much more of a pain than being
| paid hourly. You want something we hadn't discussed before? Sure,
| but you'll pay me for my time.
|
| The goal is eventually to be paid by day or by week, but still
| proportional to the work you're putting in, unless you're a world
| class talent and can bill $100k for a week long project; at that
| point fixed prices will be preferable.
| amlozano wrote:
| Penetration testing / security consultancy falls into this trap
| too. All the downsides are present.
|
| It is weird, though maybe not so weird if you think about it for
| a few minutes, how closely aligned law and offensive security are
| with business practices.
|
| One of the things I want to do with my consulting business going
| forward is to explicitly depart from this model. We will see if
| the market accepts it or not.
| kposehn wrote:
| I've moved away from billable hours and gone to a fixed-fee
| retainer block. Clients get up to X hours per week at a single
| price regardless of what they use. This scopes engagements more
| tightly and results in a natural prioritization of time where I'm
| most impactful and offloads busywork or meetings where I won't be
| productive.
|
| As a result I can handle more business and be more effective for
| my clients, while actually reducing the overall cost of an
| engagement and charging a higher effective hourly rate. So far
| results have been excellent.
| spyke112 wrote:
| Would you mind giving an example of how exactly you would bill
| your client, what does a "retainer block" mean?
| cammikebrown wrote:
| Does "X" change much per client or have you found a good
| average amount that most clients go with?
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(page generated 2022-05-26 23:00 UTC)