[Sigia-l] Pricing the Design Process

[Listera]

jamie foggon:

> If you can convince clients to pay you per hour, that's zero risk
> isn't it? 

No, it isn't. Certainly not for the client or the project.

By-the-hour has a lot of shortcomings, a very short sampling of which would
include:

+   It gives every incentive to the biller to pad his time and maximize his
revenue at the expense of the client.

+   It introduces conflict of interest since the biller would be highly
motivated to maneuver the project towards more billable hours.

+   It focuses the mind of the biller on deliverables, instead of optimal
solutions or alternatives.

+   It practically eliminates any latitude for risks, mistakes, experiments
and learning, as it's very difficult to bill for those explicitly by the
hour, and yet any sufficiently rigorous design problems often require such
risk taking.

+   It de-incentivizes the biller from finishing (phases of design) early,
taking shorter (less billable) but more efficient paths and even exploring
design solutions that would mean fewer billing opportunities.

+   It reduces (at least in the client's mind) every aspect of Design to a
single hourly rate. (I spend 50%- 60% of my time on product strategy, for
example. Mistakes I make there would cost the client hundreds of thousands
of dollars downstream, whereas mistakes I might make while placing some page
component at the wrong place often won't. The 'value' of my time during
framing the problem is not the same as, say, doing the more visual aspects
of design.) Design is a holistic process, breaking it up in disjointed,
deliverables-oriented rates/steps is counterproductive.

As designers, we can't simply think of our own "zero risk" at the expense of
the client/project. That's not a sustainable professional approach.

> Lawyer's seem to think its a good way to go.

Most corporate law firms won't work without a retainer, which is a
guaranteed amount before hourly charges start.

Actually, the way I charge is close to what most corporate law firms do:
guaranteed project-based fee, payable in three installments, with
indications of contract renewal/extension options and hourly rates. I
generally know at about the 40% completion time if the project will need to
go beyond the contracted time and I then brief the client on reasons,
alternatives, etc.

----
Ziya

Respectable people do not write music or make love as a career.