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Respecting the billable hour

by Alex in | | | | | |

Can I have $500?

One of the interesting things about being a consultant or entrepreneur is that people ask you for that kind of money all the time. I was reminded of this recently while catching up with a friend who (unlike me) is still involved in the daily work of running a web company. My friend had just received what I think of as a “can I have $500?” email, by which I mean an email that asks something like:

“I’d like your advice on my project. Do you have time to meet this week?”

“Would you be part of a brainstorming meeting with our team?”

“Can I take you to lunch and pick your brain?”

When you send an email like this to someone who earns their living by the billable hour, you’re asking them to give you money. When I running Social Signal full-time, giving someone a couple of hours of my time cost me $500: the $500 I wasn’t billing during that time.

One of the delights of focusing our work on projects with an environmental or social benefit is that I usually feel like my donated time is helping make the world a better place. Many of the people who were (implicitly) asking me for $500 were doing so on behalf of organizations or projects that are largely donor funded. In giving my time, I became one more donor.

It’s in the nature of running a business that you have lots of conversations with lots of people, only some of which will turn into actual paying work. We all need to invest a certain amount of time in leads that turn cold, in developing relationshiops for their own sake, in providing other up-and-comers with the kind of advice and insight that generous business people once shared with us.

But there is a big difference between meeting with a consultant to assess whether you want to hire her, and asking her to simply give you a couple of hours to do the work you need. When you are talking to someone whose work includes analyzing problems, offering insight or making recommendations, “picking their brain” is the same as asking them to work for free.

Sometimes that is appropriate. Sometimes you really would ask someone for $500, because you are working on a worthy cause that depends on donations, and you are approaching someone who you think might share your belief in that cause. Sometimes you really would ask someone for $500 because you have a personal relationship, or think they’d be excited about your project, or because you really really need their help and just don’t have the means to pay for it.

Just be crystal clear about what you are asking. If you wouldn’t ask someone to contribute $500 in cash to your project, don’t ask for $500 of their time. And if you do want to ask for that time, make your request with the same care and courtesy you would put into asking for a cash contribution. Make it clear you realize you are asking for a favor. Locate and schedule your date at their convenience, not yours. Pay for the lunch or the coffee, as a gesture of appreciation; don’t think you are paying someone for their time. Ask how you can reciprocate, or look for an opportuity — maybe with a referral or a speaking invitation. Take the time to plan how you use this donated hour effectively, and send a thank-you email that explains the difference that time has made.

That sensitivity isn’t just a matter of being courteous or considerate of the consultants and entrepreneurs you are approaching. It’s a mental shift that will help you make the most of the time and meetings people do give you for your projects. It will change how you see an hour of your own time.

Even though I no longer live by the billable hour, the experience of earning a living as a consultant still affects how I see both my time and others’. (It probably helps that I still do enough work with Social Signal that the billable hour isn’t entirely an abstraction.)  When someone asks for an hour of my time, I think not only about whether that hour would be genuinely useful to them (usually, though not always, I think it would) but abut the opportunity costs that hour represents. Who else could I help with that time? What projects could I move forward? Will that hour require me to move other work into my evening hours, in a way that affects my family? All these questions help to focus my time on the meetings and projects where I can help remove a bottleneck or solve a problem for someone in a way that saves hours or days of their time.

The billable hour isn’t a tyrant that should keep us from helping one another. It’s a discipline that ensures we all appreciate the pro bono help that so many consultants and entrepreneurs generously provide.

Do you have trouble saying no to requests for your time? Read 4 ways your computer can help you protect your time.

First posted on August 29,2011
  • http://simplifilm.com Chris Johnson

    I’ve heard variants of this argument.  Tamar Weinberg made it a while ago.

    This isn’t the right way to go about things – at all.  

    Why? Because the “pick your brain,” is the first step in a negotiating process. Nothing more. When you see it for what it is: someone valuing your input and offering lunch as an opening bid.

    Without rancor or emotion, a counter offer is necessary.  When you have empathy – in lieu of entitlement – you do this as a matter of course, administratively. “I’d love to do this – we offer a special session for ________, will that be alright?”

    There are a billion variants (people only act on my advice when they pay me, etc etc).

    But teaching freelancers to become aghast at people that value their services (and simply need to be educated) is going to cause less people to have billable hours.

  • http://www.alexandrasamuel.com Alexandra Samuel

    Chris, you are absolutely right…some of the time. But from the number of times the request evaporates as soon as I explain that I would need to bill for my time, I know it’s often not an opening to negotiations, but a request for free advice.

  • http://simplifilm.com Chris Johnson

    Alexandra-

    You don’t request, you just inform.
    “Sure, my rate is _____ the specials are _______ I assume you have budget approval for this.

    -Chris

  • Greg

    I guess it depends on how well you know someone, and how much you value them.  I don’t know many people who are charging and getting $250/hr for creative work, especially in the era of crowdsourcing. Even so, it seems crass to place a dollar value on friendship.  That really undervalues the concept. A little social altruism is how we got this far as a species to begin with.  There may be an opportunity cost later on if people are constantly (if politely) solicited for  500 dollars in exchange for your 2 cents.   Additionally, if you feel like you have to be “on the clock” all the time, and that advice can’t be given in a social context, I pity you.  You may enrich yourself, but you will be poorer for it.

  • Guest

    I once got a writing job and the guy who hired me complained that he’d had someone else lined up – a referral by a friend no less – and she wanted to charge him $250 just to meet up for a chat. You see she saw the chat as billable time and didn’t consider it prospecting for work or networking time. So she didn’t get the job. 

    I met him and spent a good hour or more chatting and giving him ideas. Sure, he could have taken my ideas and got someone else to implement them but other people’s time is money too and most people appreciate the time you spend in advance of a job. It’s then up to you to ensure your billing rate covers this extra time spent so you’re not out of pocket. That job turned into an easy project for good money. I more than earned back the time I spent at the initial unpaid meeting.

    Think of it as a pitch. Design and ad agencies do them all the time. They spend hours and days trying to win new contracts, even producing artwork. The clients get to see their ideas at the pitch meeting but don’t have to pay for them.

  • http://spiritsentient.com JasonFonceca

    Absolutely fantastic article!

    To Chris (+ Alexandra), if I understand correctly and can clarify, — I believe Alexandra was aiming to provide a fresh perspective to enlighten the portions of the population who may not have a real grasp on what it’s like to ask for moments (hours) of another’s day, with not even an iota of reciprocation intended.  This portion of the population does exist, and they would almost certainly benefit from an article like this. Whether they achieve your level of understanding or not, gaining a clearer awareness of value, time, and financial flow is helpful :)

    At the same time, you`re spot on. Teaching freelancers to understand the proposals as messages that others value you, and making a counter-offer is a brilliant evolution of what Alexandra’s written. Your contribution feels especially helpful towards freelancers who encounter these others.

    Either way, amazing post and comments. Rock on!

  • http://melodieofmovement.com Melodie Of Movement

    I love the freedom to go somewhere and just relax. Billing for my time feels troublesome. I feel like its clear in my interactions that it is always an equal trade. Sometime I get treated to a meal or get an envelope at the end. Most of all I loved that I feel free to give away my time because I’m abundant and always have more to give.

    I can totally see how this would work for many people and there are certain parts I defiantly agree with. As a whole I feel like the message of this article is that “Your time is valuable, value your time and others will do the same” If you do that by giving a bill for ideas and stuff, than so be it. Whatever steps you take to feel the value of your own time.

  • http://smartboydesigns.com Christian Hollingsworth

    I hear you.

    I guess I just “feel” it as I go along. If it’s a client I’d like to acquire, then certainly, I’m willing to talk for a time and let them “pick my brain.” If it’s a friend, sure, they can pick my brain. If it’s someone just wanting to “pick my brain” and move on, then often I can feel it coming, and react appropriately.

  • http://twitter.com/Boldtcom Lesli Boldt

    I completely agree with Alex on this one. A lot of progressive consultants are like those old country doctors during the Depression who took payments in chickens and corn – it was the right and generous thing to do, but in the end the bank got the house. As consultants (especially when we don’t have a second income earner in the house), we need to protect our time, and find a balance between our generosity and our need to pay the bills (and put food on other people’s tables, too). And so, we need clients, contacts and friends to respect and value our time. 

    I need to bill a certain amount each day in order to keep the lights on and people paid. That doesn’t mean I’ve “sold out to the man” – it means I know my value and…and am responsible for ensuring everyone else gets paid too. Salaried folks get paid the same no matter how long and frequent their meetings are, but for us, some hours are paid (billable), and many (including running one’s business or donating ones time) aren’t, so this is kind of a big deal for consultants.  

    By valuing my own time, I’m actually creating more room in my life to do pro bono work, leveraging my network in the best interests of my pro bono clients. But that pro bono should never be assumed or taken for granted.

  • http://twitter.com/brookeclay Brooke Clay

    This was a really great post! Thanks for sharing!

  • http://www.facebook.com/profile.php?id=1065774568 Becky Clark

    I have conflict on this issue.  I do think that your time is worth money and if it is obviously a ploy to get “something for free” (even if that is advice/information), then it is absolutely important to nip that in the bud.  At the same time, living your life by the clock seems so limiting.  I like the general ideas of doing what you love, giving things your best, and that the success/money will derive from that passion and dedication.  It takes that passion away for me, when I realize that I took time away from work (didn’t get paid) to do something else (that either cost money or didn’t make much).  But, it is most often still worth it to have done it for the experience, enlightenment and learning experience for me and so I try not to think of things in cold, hard dollars.  Perhaps I’m thinking of grander things than just a one or two hour meeting, however. ;)   All good things to think about; thanks for the post. :)

  • Kelly M Rivard

    As a chronic intern who is still learning the ropes of the professional world, this blog post is a huge help. My last two internships were in the agency world, where billable time dictated my work-day priorities. It gave me insight into the billable life, but it never really struck home until I started keeping invoices for my first big-girl-official freelancing opportunity. (To be fair, I had “freelanced” in the past but it was always an unofficial gig…you know, the kind where you get paid in beer or free meals at a restaurant or something.)

    I have a tendency to shortchange myself and my abilities. I have trouble saying “no.” Part of this is because of an anxious need to develop my resume, but on the other hand I’m just a giving person. After a few experiences where I wore myself out too thin on my many skills-related obligations, I’ve started to wake up to the value of my own billable time.
    Thanks so much for sharing. I’ve pushed this out over my social networks and I will be keeping this in mind as I contemplate any of those emails I get asking for time.

  • http://www.alexandrasamuel.com Alexandra Samuel

    I’m so glad you found this helpful, Kelly! Developing a “no” voice early on in your freelancing career will serve you well; it’s a lot harder to get people to appreciate your time when you have spent years saying yes to everything.

  • http://www.alexandrasamuel.com Alexandra Samuel

    Thanks for your thoughtful post, Becky. I think it speaks to part of the value of thinking in terms of the billable hour: it encourages *you* to focus on what is worth giving away, and what you want to charge for. I give my time frequently,  but as you say, it’s got to be something I feel passionately about. If it’s something I enjoy spending my time on (like jail breaking my friend’s appletv this week!) or if it is a cause I *would* give $500 to, then I’m thrilled when my expertise has value to someone. But if I’m going to feel dirty and used by the pro bono transaction (as I am afraid I have, at times) then it’s a sign that I should be billing.

  • http://www.alexandrasamuel.com Alexandra Samuel

    Believe me, I am a big believer in the pitch — and one of the things I love about doing so much work in the not-for-profit sector is that when I share ideas in a pitch meeting, I feel like they have some value to the world, whether or not they turn out to hire me.

    But those are the open-ended, let’s-see-if-we-can-work-together meetings. Like just about *every* successful entrepreneur I know, I also get lots of requests that are 100% not pitch meetings: people who need a couple of hours of strategy advice but aren’t planning to engage an external consultant or company, and just want that strategy advice pro bono. People who want career advice (which I provide to lots of people, but simply can’t offer *everyone* who asks). People who are interested in starting their own business (or have started one) and want our advice on some aspect of the business (again, something I try to do regularly, but can’t do for everyone who asks). 

    The danger of your story — and of every, “if you don’t give it away, you won’t get the work” anecdote  – is that it traps us in this idea that we have to say yes to everyone who asks, lest we miss the mythical Great Gig. Yes, that free meeting you turn down could have led to the breakthrough contract that changes your life. But likewise, the 17 hours you gave away in the past two weeks could have been the 17 hours in which you wrote the white paper that put your company on the map.

    Life is full of opportunities missed, and roads not taken. We can’t be so afraid of missing out on an opportunity that we cease to set limits on where, when and for whom we spend our time.

  • http://www.alexandrasamuel.com Alexandra Samuel

    Believe me, I am a big believer in the pitch — and one of the things I love about doing so much work in the not-for-profit sector is that when I share ideas in a pitch meeting, I feel like they have some value to the world, whether or not they turn out to hire me.

    But those are the open-ended, let’s-see-if-we-can-work-together meetings. Like just about *every* successful entrepreneur I know, I also get lots of requests that are 100% not pitch meetings: people who need a couple of hours of strategy advice but aren’t planning to engage an external consultant or company, and just want that strategy advice pro bono. People who want career advice (which I provide to lots of people, but simply can’t offer *everyone* who asks). People who are interested in starting their own business (or have started one) and want our advice on some aspect of the business (again, something I try to do regularly, but can’t do for everyone who asks). 

    The danger of your story — and of every, “if you don’t give it away, you won’t get the work” anecdote  – is that it traps us in this idea that we have to say yes to everyone who asks, lest we miss the mythical Great Gig. Yes, that free meeting you turn down could have led to the breakthrough contract that changes your life. But likewise, the 17 hours you gave away in the past two weeks could have been the 17 hours in which you wrote the white paper that put your company on the map.

    Life is full of opportunities missed, and roads not taken. We can’t be so afraid of missing out on an opportunity that we cease to set limits on where, when and for whom we spend our time.

  • http://twitter.com/blackgirlinmain Blackgirlinmaine

    This is very much something I need to work on, while I pretend to be a social media professional (not) my day job is non-profit management. In recent years I have really struggled as people often acquaintances and friends ask for advice about the world of grant writing. On the one hand I want to be helpful but too many times long discussions never materialize into work and waste my time.

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