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High hourly rate guys- share your experience

I've seen that some of the poster here already in the very high hourly rate level (recent consultant thread for example --> 10K / month, some are even more 200 per hour). Could you share your experience - how are you progressing for the first time you work until now? 

Alamak
Tuesday, August 05, 2003

I am also curious about this.

What work are you doing that you can bill that kind of money? I'm assuming this is freelance consulting. What kind of companies are you contracting with? Are these long-time things, or are you being called in in superhero mode to pound out an enterprise app in 6 months?

Where do I go to be able to bill $10k a month 8-}

Mike Swieton
Tuesday, August 05, 2003

First, pick your industry carefully. You want an industry that is very profitable and that understands the real value that IT can contribute. Perenially good choices include investment banking (hot areas now are risk management and credit derivatives) and fund/asset management. Essentially anything to do wth the financial industry usually pays well. Another hot topic recently is energy trading - gas/oil/electricity. These industries pay their stars lots of money - for instance, my boss at Citigroup earned $15M in a good year. You look cheap in comparison, even if you're on a high rate.

Second, know your business domain. I mean *really* know your business domain, preferably as well as or better than the business people. THis helps with two major areas. You can talk with your customers in their own language, and this is a *huge* benefit. And you can fill-in all those holes in requirements specs that exist because business people don't know what they really want, and often don't understand their own business as well as they think they do. So When, for instance, a risk manager starts talking about using forward curves to analyze MVAR, you can also suggest ways of analyzing DVAR - in this way, you're educating the customer and helping to provide him or her with better IT systems.

Third, understand the whole software developemnt lifecycle, from requirements development all the way through to production support. Concentrate especially on the budgetary implications of different SDLC choices, and educating your customers about these implications.

Finally, learn enough about technology to be able to have a stab at debugging anything. Debugging is a primary skill for a good developer. Not just your own code or the code of your colleages, but also OS issues, network issues, database issues, security issues, performance issues, SCM issues, and so on and so forth. You don't need to know all of the fine details about these areas, but you need to have a general understanding of all of them and the ability to know where to find detailed answers when necessary.

Mark
----
Author of "Comprehensive VB .NET Debugging"
http://www.apress.com/book/bookDisplay.html?bID=128

Mark Pearce
Wednesday, August 06, 2003

And they wonder why their jobs are going offshore...

Chris
Wednesday, August 06, 2003

If you are looking for a programming job at $75-$100/hour you had better be in a niche or the last person willing to code in it.  OR, you are completely on your own. 

This last one is important, because unless you know what you are billed at, you do not have a real gauge.  For example, I can bill someone at $100-$120/hour, yet most of the time they get paid in the $50/hour range. 

Why?  Bottom line - It's my business.  I secure the customers, I cover the insurance, including the now required liability.  I may also supply health insurance, pay taxes, and unemployment.  I may also supply equipment, training, and a host of other expenses beyond that.

Over $100/hour requires you to be a consultant, not a contractor.  A good one can bill at over $200-300/hour. 

A consultant knows the business first.  Then they know what needs to be done, can articulate the need, show the _business_ value in doing it and the accomplish the task.  I can place a consultant on an account and they will make more money, because they recognize business need.  A consultant does not require supervision to accomplish tasks.  They are a developer, project leader, account manager all rolled into one. 

A consultant understands and can comfortably speak with CIOs, CTOs, and CEOs.  The very idea of a "suit" does not enter their mind.  That know business drives IT not the other way around.  They feel comfortable talking about business, technology, and the future, while playing a round of golf. 

So you want to earn the big dollars?  Now comes the difficult, high risk part.  Mark is correct, you need to know the industry.  This means years of experience not in just coding for banks, but understanding banking.  Not just building the new UI for the claims system, but understanding insurance.  This takes time and you need an incredible drive, so people allow you to learn the industry.

While gaining that experience, you also need to know technology.  Not just coding, but all facets of technology and how in impacts business in general and your industry in particular.    Beyond knowing it you need to be able to explain it so anyone can understand it.  If you are asking a company to spend $5,000,000 on a system, you better be able to explain and justify it.    And nothing is "obvious."  If you are recommending XYZ products as part of a solution, you need to know the alternatives, and competitors, as well as why your solution is ideal for this project.

Chris is also mistaken.  These careers are not going offshore.  These demand "face time" and almost no one will pay high rates for remote work.  You need to be in the office with the teams showing value, every single day.  And you get your appraisal every week, when they ask you to come back. 

It also means you need to go where the work is.  In five years I spent four on the road, literally.  Road warrior takes on a whole new meaning.  If you can get into it, I highly recommend it.  You will meet some of the best, worst and most influential people in the industry. 

Mike Gamerland
Wednesday, August 06, 2003


Aw man... ya mean I can't earn megabucks by just sitting around like a doorknob and having people tell me what to do?  Bummer... <laughing>

Joe AA
Wednesday, August 06, 2003

I am about to start a year-long contract at $80/hr because they know I am worth more than 3 $50/hr guys so they are getting a great bargain.

It also helps that this contract is for the government.  In the private sector I am sure my skills would be considred average, but here they think I am some kind of superstar.

Jason W
Wednesday, August 06, 2003

The answer is you have to go were the money is. Usually this comes together with a high cost of living. The NY and California command higher salaries but the rise in the cost of living more than offsets the gains.

If you include all perks and bonuses, a full time job with a financial company will be probably equivalent with a $75+ hourly rate. I am considering here a skilled programmer with 5 years or more experience and a good knowledge of the business domain. Basically this is a person who brings value to his employer as opposed somebody who just codes, level 12 and up on Joel’s scale.
http://www.joelonsoftware.com/articles/fog0000000038.html

As a side note, a plumber in my area (northern NJ) tried to charge me $185 for a one-hour job. Suddenly a programmer’s $75 rate does not seem that much.

19th floor
Wednesday, August 06, 2003

I started out as an Access/Excel programmer.  Took an incredibly useful and knowledgeable 6 month contract at a commerical software company where I learned OOP in Visual Basic 5.  (I'm still amazed at how much that company was doing with VB).  These jobs were all ~$40K developer jobs.


Then I took a job as a VB Developer at an company that sold small-mid size businesses accounting software.  Anything more complicated than Quickbooks no one uses as it comes out of the box.  So our dev team wrote customizations for it.  This is where I started to see a difference.  I wasn't a VB programmer anymore, I was a solution development consultant.  The difference was I was still taking home a $45K salary but when I billed the clients I was entering $140-$160 an hour.  Now of course you have down time, research time, travel time, screw around time, etc.  so you don't bill 40-50 hours a week normally, (some weeks in a big project will be that way, but that's the exception).  But even at 20-30 hours of billable work a week, it works out pretty well.  Also, this was 1998-early 2001 so everyone and his brother were replacing their accounting systems to get them Y2K compliant, so we were swamped. 

Alas, the ownership of that company got grand ideas in their head and hired lots of $50-60K consultants and developers and rented out big expensive office space and went out of business in 2001 due to insane overhead expenses in a down economy.

Myself and another Microsoft guy (more on the networking side) took the customers we had relationships with and started our own company.  We hired a sales guy, (totally necessary, techies are not salespeople), and are in our third year.  The sales force from our old company reconsistuted themselves as a virtual company and now they sell software and contract to us to do the implementation and development.  Our bill rates range from the $80 - $160, (would be higher but for (1) slower economy and (2) this is Metro Detroit and the Big 3 beat down prices for all their suppliers and that attitude pervades even unrelated industries around here) depending on the type and specialization of the work, and without the overhead we get to keep a lot more of it.  Even more than the money, I love the freedom and time flexibility and the ability to pick my jobs and clients.

Just to re-emphasize Mike's and Mark's comments:

-knowledge of the whole dev cycle is key

-knowledge of a scope that's more than just the language you program in is invaluable.

Being able to write ASP code on IIS that talks to SQL Server is good.  Being able to write ASP code, AND being able to setup and configure IIS, AND being able to setup, configure and administer SQL Server and do database design and changes is priceless.  So many problems you encounter when writing or customizing enterprise systems are easier to solve if you know all the technologies involved.

-knowledge of a particular business is very helpful, but being able to learn a customers business practices no matter what is even better.  You can design and write a better solution if you reallly understand what the users are trying to do with it and why

-be able to explain the important technical details in a way business people will understand.  know what matters to them and what doesn't.  Just because you think it's cool, doesn't mean that the CFO will understand it or care about it.

-presenting yourself well in a businesslike way is critical.  you have to make them feel comfortable that you are worth what you are charging. 

-being self-directed and having the ability to figure out yourself what the next step is.  Every customer wants something different, so you will constantly be charting unknown territory. 

Okay, I've written way too much but I get excited about this.  Hope it's somewhat informative and illustrative of the differences in job types.

Jason Catlett
Wednesday, August 06, 2003

I knew loads of people, including myself, who are (me==were) billing ~ $20k/month.   

And dont believe the hype consultants spew about overhead and benefits.    The HMO cost me a whopping $350/mo.  I think FICA cost me $500/mo.  All told, not even ONE day of billing.  Consulting = rolling in money, compared to FT.

Bella
Wednesday, August 06, 2003

Thanks for the input guys.

Alamak
Wednesday, August 06, 2003

i consider myself more of a small business owner than a contract programmer. in general, if you want to make a good rate, target rich clients. i.e. clients for whom $10K a month is like a rounding error.  unfortunately if you don't live somewhere like manhattan or maybe boston, these places don't exist.

also what i've learned since being a consultant is that you can make a much better living than most people doing ANYTHING so long as you run your ship like a business vs. being an employee. $10K/m as a tech consultant seems like a lot, but i know marketing consultants who bill out much more than that per month. i even know an artist who bills out way more than that doing photography for advertisements.  and has been mentioned many times, just think about what your plumber or electrcian charges per hour.

someone said this in a previous thread: the USA is an interesting place in that the economic system is set up in such a manner that it is almost always much better to be an entrepreneur than it is to be an employee.

.
Wednesday, August 06, 2003

this should have read more like:

also what i've learned since being a consultant is that you can make a much better living than most people doing ANYTHING YOU WANT so long as you run your ship like a business...

.
Wednesday, August 06, 2003

. said:

>>so long as you run your ship like a business vs. being an >>employee

Can't agree more.  The longer I'm running my own business, (2.5 years now), the more amazed I am at how much overhead and inefficiency crept into my former employer after only 7 years, (granted they were 1993-2000 so boom times can cover a lot up I guess).  I'm doing my best to make sure we are vigilant about staying lean and mean. 

>>the USA is an interesting place in that the economic >>system is set up in such a manner that it is almost >>always much better to be an entrepreneur than it is to >>be an employee.

Yeah, I agree here as well.  I think it used to be more of a trade off.  "Stability and security but less upside income limit" of being an employee vs. "risk and freedom but more reward" of an enterpreneur.  But since the early nineties the "stability, security" is out the window for employees (or at least on the ledge ready to go).  I'd say the current situation is heavily biased towards entreprenuership.

Jason Catlett
Thursday, August 07, 2003

Incidentally, a lot of this is also salesmanship. I don't know how Bella pulls it off, but in general to pull in good rates you have to be a salesman.

Philo

Philo
Thursday, August 07, 2003

I pulled it off b/c I was straight with my clients, worked like I didn't care about money, stayed very current, got along great with everyone I worked with, was no-nonsense when I was at work, a lean mean efficient coding machine.  NO wasteful hairbrained ideas, staunch advocate of KISS,  and stayed away from bleeding-edge hype bullshit that saved my clients millions, thorough understanding of the value of ANALYSIS and DESIGN.  etc.  THe list is endless, but it all boils down to common sense.  THAT was my greatest stength.  Conversely, learning XHSLXLT, or getting a Master's will do shit for you.

Bella
Friday, August 08, 2003

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