No more day rates

Why we prefer project fees
Mike Reed
by Mike Reed

We work to project fees, not day rates, on almost all of our projects. Here's an old piece by Mike explaining why.

Problems with a day rate

1: You don’t know what a ‘day’ means. What can the writer or writing team achieve in a day? What’s their idea of a reasonable day’s productivity?

2: You don’t know how many days you need. Many new clients ask simply, ‘What’s your rate?’ The answer is meaningless unless you know how many days are needed for the job. (See Point 1.) £1,200/day is more expensive than £800/day – unless a job takes the ‘cheaper’ writer four days and the ‘expensive’ one two.

3: It doesn’t recognise the value of the work. I might come up with a brilliant strapline in an hour. Hell, I might come up with it in the briefing meeting. Or it might take a week of fevered attempts, drafts and rounds of feedback.

Either way, if it’s good, that line is extremely valuable for your company. It sums up your offer in a handful of words, crystallising everything you are in a single hit. So, do we judge it by the time it took? An hour, or a week? Or should we find a fee we both feel recognises the value of that product for you?

Of course, if the line becomes another ‘Just do it’, almost any price will turn out to be a bargain.

4: It’s a nonsense. So many jobs begin with some version of this conversation:

"What’s your day rate, and how long do you think this’ll take?" "It’s £1,400 a day, and we reckon it’s ten days’ work, so that’s £14,000." "Oh. I only have £10,000."

Instantly, the day rate goes out of the window. It’s about balancing the writer’s needs and the client’s. The client can’t go above £10,000. OK – now it’s up to the writer to decide whether they’re prepared to do the job for that.

The job won’t take any less time to do, of course. But now the writer is considering other things: is this a nice project for the portfolio? Might it open up other opportunities with this client, or in this sector? Will it be fun, or a drudge? Can he or she afford to let it go – or is it the first proper job to come along in months?

This reveals what a sham the day rate is. All the factors above, and more, are important in setting a fee. So why reduce the process to a blunt system of ‘clocking in and clocking off’?

5: It encourages dishonesty. Or at least, a sort of bad faith. A writer may be confident of doing a job in a couple of days, but be equally aware that the job is much more valuable than ‘Day Rate x 2’. So he or she ends up quoting five days just to secure a fair price.

Now you’re into ridiculous charades like delaying delivery to make it look like a job took longer. Early in my freelance career someone – a client, no less – advised me to do exactly this.

‘Wait a couple more days, then deliver it and say it took four days,’ he told me. ‘That’s how you make money.’ This struck me as cynical and dishonest at the time, and it still does. But you can see how day rates force people into such corners.

The good thing about a project fee is…

1: Everyone knows where they stand. The client knows from day one what they’re paying – unless the brief changes materially. And the writer knows what the job will bring in.

If the writer has underestimated the time required, then he or she will take the hit – not the client. And if the job gets completed more efficiently than expected, then the writer benefits. But it’s no skin off the client’s nose – the price hasn’t changed, and it’s one everyone has already agreed as fair.

2: It can recognise the value of the work. The writer can include in his or her fee a recognition of the value of the work. Again, a strapline is a perfect example: it’s very short, but done well its value can be inestimable.

It wouldn’t be unreasonable to quote the same price for a strapline as for a large brochure. Many clients wouldn’t go for that, of course, but that’s another argument for project fees: you’re free to negotiate something that suits everyone – or not.

It works the other way, too. If the job is a relatively straightforward one, which needs doing but isn’t so central to the brand, the writer is free to agree a lower fee – without devaluing himself or herself by arbitrarily dropping the day rate.

3: It can recognise the budget. If the client has £XXX for a job, the writer is free to decide whether they’re happy to do it for that. (See point 4 above.) They don’t have to worry about how many days it’ll take, and what that means for their day rate. Replacing day rates with project fees enables flexibility and common sense.

4: It’s honest. In contrast to point 5 above, project fees are more straightforward and honest. If a job is worth £10,000, it’s worth £10,000. Maybe the writer can do it all in ten days. Fantastic. But they won’t have to be coy with anyone. They won’t have to quote an artificially high number of days – and then hold off on delivery for appearances’ sake.

5: It saves arguments. Many writers will have had the difficult ‘It can’t take you that long’ conversation. Either during the estimating process, or the job itself, the question can arise: ‘Is this really X days’ work?’

It’s a corrosive question. The client feels (perhaps correctly) that the writer has overcooked the number of days. The writer feels (perhaps correctly) that his or her work is being commoditised and undervalued. Both start to feel they’re being done over in some way.

Ditching day rates makes this question irrelevant. You agree a fee, you agree the deadlines, and you get on with the work – without nagging worries about how long someone is actually tapping away on a keyboard.

That’s the way I see it, anyway. So far, happily, my shift to project fees has met with zero resistance. Every client thus far has seen the point immediately, and been happy to settle on a project fee. For many, I suspect it’s as much of a relief as it is for me.

I’d be very interested to hear what other freelancers, and other clients, think about all this. Feel free to comment below.

Update: an edited version of this post appeared in Creative Review in December 2012.

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