We’re bumping this week’s Google Questions for a recently emailed Ask the Grumpies. Because we need your help to answer it.
Dr. Koshary asks:
Out of curiosity, has either of you had occasion to work out what your consulting fee would actually be? I assume it’s nuts to throw the question over to whomever might hire me, and that I would need to have some figures and rationales worked out. So far, all I’ve seen online about this is oriented toward sales consultants who would do that for a full-time living. I look to you both for this sort of wisdom: how should full-time academics – and yes, I hear you, I shouldn’t re-focus my time and attention on this – calculate what their time is worth for consulting? I have a private fantasy of saying my time is worth $1000 an hour, but I fear to tell that to almost anyone else.
This question relates to an earlier post of Dr. Koshary’s about a potential consulting situation.
Unfortunately, we don’t have a good response for Dr. Koshary. One of us is pre-tenure and the other has only been tenured for a year, so neither has really cultivated any outside consulting opportunities.
#1 does occasionally do some side-work, but it’s always something that would look good on her cv or is doing a favor for someone who may be able to help her out later, so the money is nice but not the only reason. She hasn’t done anything for a for-profit company. #2 has reviewed textbooks and things like that, but she doesn’t negotiate her fee.
One important thing when determining your consulting rate is to think long and hard about what *you* think your time is worth. In economics, we say, what is the marginal rate of your time? That is, how much would they have to pay you to work another hour on their project. That should be your minimum walk-away point. (We often approximate this with a person’s hourly wage on their regular job, but that isn’t really accurate as generally regular jobs don’t let you work hourly and you have diminishing marginal utility etc.) However, if you just give them that figure, you may be severely under-cutting yourself (as many academics seem to have a masochistic streak when it comes to how much to pay for work).
I don’t see why not to use the same methods to calculate hourly rates that you’ve been finding online that people use for their full-time jobs. Obviously, you do not have the same kind of overhead and there will be less paperwork than someone running a consulting company. But other than that, why would the calculation be different?
Someone in my partner’s lab now does full-time consulting and each time he gets a new job, he asks for way more money than he did on the previous job and they always say yes without blinking. He suspects he’s been undercharging from the get-go. But eventually he’ll hit the right point.
In terms of numbers, doctors and lawyers will often charge in the hundreds of dollars range for an hour of billable time. So 1K may be a bit much if you’re giving an hourly rate. Presumably your rate is somewhere in there.
So, to summarize, we have no idea. But perhaps the Grumpy Nation can help Dr. Koshary out.
Grumpy Nation, have you ever done consulting outside your main job? How do you figure out how much to charge? How do you know the value of your time?