Dear Dr. Young:
Disclaimer: I'm not an attorney or accountant, just someone with some
experience bumbling around, so this should not be taken as definitive
legal or financial advice, but only on the basis of whether it seems
to make sense to you.
Attorney's charge on an hourly basis for everything they do. So should you.
You charge by hour, door to door (time you leave your house or office
to the time you get back), for the date of your court appearance and
for any preliminary pre-appearance conferences for which you drive;
you charge straight hourly rate for any prep time, or visits or phone
calls the attorney makes to you. Many attorneys log their time in 5
minute increments which might sound silly, but if you're charging
$180 per hour, 5 minutes is worth $15; and for the higher priced
lawyers, at $500/hour, 5 minutes is worth about $42.
It goes almost without saying that being accurate about your hours
contributes, in the long run, to your reputation as a consultant.
You have the option of charging by the hour for prep time and giving
1/2 day and full day rates for conferences and court appearances; I'd
do it all by hour for commercial consulting and day rates (with some
reduction) for work with schools.
You determine your consulting hourly rate (CHR) this way:
1. Take your annual salary (AS), divide it by 2080, your annual
working hours (WH) to get your normal hourly rate (HR):
HR = AS/2080 or HR = AS/WH
Example: $41,600/2080 = $20 per hour
2. Double your hourly rate to get your consulting rate:
CHR = HR x 2
Example: $20 x 2 = $40 per hour consulting fee
Brief explanations:
a. WH: The 2080 is working hours if your work week has 40 hours; you
could do 35, but for professionals 40 is pretty standard. If you're
on an 8 or 9 month contract and any Summer session $$ are extra, you
can get a little more precious about it and divide by 1400 (35 x 40)
or 1560 (39 x 40). But if you normally consider your 8-9 month salary
to be what you live on, then it is your annual salary. Annual salary
divided by total annual working hours does give you your actual
hourly rate. Best to be honest and straightforward about it instead
being too cute and then having to refigure in more complicated ways
in subsequent years depending on the workload you choose.
b. x 2: The reason that CHR is double your HR is taxes and overhead.
When you declare your consulting fees on your 1040,that money is
taxed differently than your AS. In very rough terms, you will need to
pay approximately 50% of your consulting fee in taxes. (Essentially
you have to pay taxes and Social Security on it.) By doubling your HR
to get CHR, your net consulting income is about the same as you would
get at your normal HR. Because you've already paid the taxes on it,
you can consider the difference between your net consulting fee and
your HR to be either a bit of profit or a few $$ to cover your home
overhead for doing the work. This is not a big deal after one
consulting gig, but if you end up doing lots of consulting, or go
into business for yourself, and claim a home office related to
either, that overhead comes in handy.
All the best!
Paul Wilson
At 10:47 AM -0400 09/20/2004, Beth Young wrote:
>There's a slim possibility that I'll be called locally as an expert
>witness . . . question about punctuation of a statute.
>
>The atty has asked me what I would charge. I have no idea what a
>normal rate would be. I'm asking colleagues here, too, but would
>like to know your experience: what do expert punctuation witnesses
>charge? Anything else I should know about such responsibilities?
>
>Thanks,
>
>Dr. Beth Rapp Young
>Director, University Writing Center
>Associate Professor, English
--
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Paul T. Wilson [log in to unmask]
Professor of Reading Western Michigan University
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