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Retainers

I’ve been approached by a small but growing company that has three relatively inexperienced “IT guys” – in house programmers/system administrators that keep the custom applications that the company depends upon going.  Management has a clear idea of what their systems need to do, but needs some help evaluating the technical decisions these people make, making sure that projects proceed on schedule, etc.

I know quite a bit about the business, and have experience in different technological approaches they might take. They want to hire me to “sit in” on meetings of developers and management on a monthly basis. Although management has said “I want to know when they are blowing smoke up my ass”, they are generally happy with the developers, and suspect that past failures are the result of their limited perspective. The idea is that I can introduce new ideas, say “why not….” when developers say something won’t work, etc.  I know a couple of the developers, and have respect for what they can do, but they have been at this small company for a while, and the in-bred software culture is a problem.

I’m inclined to spend a few hours a month on this, and will charge a hefty hourly rate.  My question is: should I ask for a retainer?  It seems like a way to simplify the billing – one big check that they would peel money off of as it is earned.  Would it also demonstrate their commitment to me, so that they could not cut me off after the first few months.                 

I’m new to this kind of situation, but does this sound like a good way to proceed?

New to Consulting
Tuesday, August 17, 2004

You  might want to bill them on a monthly basis for the first few months just to see what you're getting yourself in for. If it looks good then maybe a retainer would work in your favour for the long term.

Nonetheless, it sounds like you're in the position of being a trusted 3rd party so there's a good chance that a gravy train will be delivering wagons of cash into your bank account.

Best of luck!

TheGeezer
Tuesday, August 17, 2004

Geezer,

The usual way retainers work is the opposite - you get them up front, then switch to monthly billing once the initial retainer is used up.

OP,

I see no reason why you shouldn't ask for a modest retainer in the range of $500-$3000. It shows their good will and intent.

Advisor
Tuesday, August 17, 2004

Yes, definitely charge a retainer. You're providing expertise which requires you to stay up to date generally, and the value of your expertise does not depend on how many hours you work for them. Your role is like that of a member of a company board.

Charge some fixed annual amount, payable monthly, which includes attendance at a monthly meeting. Then if there are any additional projects arising out of that, including reviewing documents or mentoring outside that meeting, charge that at an hourly basis.

.
Wednesday, August 18, 2004

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