How I Roll: The Ten Day Rule and Other Consultingology
I thought I would clarify some work-related questions that come up consistently in my consulting work.
Ten Day Rule -- I base my consulting algebra around the central notion that I will be working ten days each month on client work, with the other working days being dedicated to research, networking, travel, and goofing off. As a result, my per day rates may look higher than someone who assumes they would be working 22 days per month. On the other hand, the reason that most clients want my participation in their projects is due, in no small part, to the way I spend those other ten or so days per month. I am investing that other time in remaining at the top of my game. Just as professional athletes need to work long hours to remain in condition before they walk on the field, the same is true of someone applying their expertise to business.
Advisory Capital -- Often I have a long-term relationship with a client where my full-day rate (see Ten Day Rule, above) is discounted based on the attractiveness, length and level of effort involved in a project, and in some cases, based on a stock grant of some form or another. Note: I am actively working to move toward a situation where all of my work is linked to equity, and I am picking through opportunities in large part based on my assessment of the likely value of such equity.
Attractiveness - I am inclined to discount my work based on a lot of factors, such as doing good, the involvement of fascinating people, or projects likely to be fun. These don't swamp everything else, but are very important.
Length and Level of Effort - When I am engaged with a solid, long-term contract with significant monthly or quarterly involvement (more that a day/mo or 3 days/Q), I will discount my rates, but never below a dynamic floor, derived from an estimate of how much other discounted work I will have in the period involved.
Impact - I want to change the world through the social revolution. I believe it is the only hope for homo sapiens. Projects that seem to be headed toward a big impact are more interesting to me.
Work Products -- Unless otherwise agreed to, my ideas and insights are my own. In general, I will not agree to signing over ownership of ideas that I may have been developing for decades in exchange for a day's consulting, two Starbucks, and a catered pastrami sandwich (hold the pickle). Brilliant ideas have a value that exceeds the value of nearly any short term agreement. This is one of the reasons that I look for longer term strategic engagements where equity is involved, since then all parties share common cause.
Work tracking -- I track work at an hourly basis when appropriate, and will provide these records in my invoices. Occasional phone calls, coordinating meetings, and socializing is not really work, but at the same time, trying to move a bunch of consulting into the cocktail hour does not make it unbillable. If you pull out a powerpoint or give me a demo, that's consulting, not telling jokes. Likewise, making introductions, interviewing prospective employees, or reviewing documents is work, even if I am doing it over a ribeye steak with a nice Malbec, or on the deck of a boat in San Francisco Bay.
- I travel a lot on behalf of clients, and while I do try to keep expenses low, I do not guarantee to take the lowest cost flights, stay in the cheapest hotels, or eat hot dogs on the street corner.
- Unless arrangements are explicitly agreed to otherwise, I will make my own arrangements and invoice after the travel is completed.
- I do not provide receipts unless agreed to in advance, although my invoices will be detailed.
- If clients' changes in plans lead to me changing travel plans, all expenses incurred will be invoiced.
- When travel involves meetings with more than one client, I will try to apportion expenses in a fair way. For example, when meeting several clients in Europe, I will allocate airfare in some sort of proportionate way.
This is less a blog post than a page in a folio about working with The /Messengers, but those interested in acting as independent consultants might take heed to the philosophy underlying this.