Freelancer filter: Any way to roll back a discounted hourly rate?
December 12, 2018 10:05 AM   Subscribe

Last year at this time, my main client (70%+ of my income, eight-year history, well paying, reliable) asked to move to a 'day rate', on the basis that they would be giving me an additional week's work a month. I agreed a discount representing 10% off my previous hourly rate. The additional work has not manifested, client is still being wishy washy on hard dates and I am hundreds of pounds poorer for it. Can I somehow walk this discount back when we sign our new contract? Or should I chalk this one up to experience?

I'm trying to think what additional detail would be helpful here:

The client is a subsidiary of a large company, more than capable of paying my original rates. I do around a week and a half's work for them each month and have done for around eight years. We are already planning work for next year, though we haven't signed the renewed yearly contract as yet.

I have a friendly relationship with my long term contact in this company and he was the person with whom I arranged the discount. However, the additional work is a project belonging to his boss, the CEO of the subsidiary company, and another long term employee who I know less well. The client for the additional work is the large company of which the subsidiary is a part.

Apart from one conference call back in March and a couple of days of initial planning work, I've not been able to charge anything on this project. Communication has been very low / non-existent. I've been chasing up each month and the most recent news was that they were "preparing a presentation". Seems the additional work hasn't even been signed off yet by their client (the main company) and so still may not even go ahead.

At the moment this 10% discount has moved me from being able to save a little each month to just barely making ends meet. I have a very few other clients but the work is sporadic and none pay even half as well (yes, need to work on this in the new year!).

I am an imposter-syndrome-suffering woman. The rate I was getting for my work previously was generous but not out of the ordinary. I worry that I could be replaced quite easily.

What would you do, freelancers / contractors / folks who commission work? Should I be having a conversation about this with my client or let sleeping dogs lie, chalk it up to experience? Thanks in advance.
posted by doornoise to Work & Money (9 answers total) 3 users marked this as a favorite
I would try to write the discount into the contract as applicable to any month where they actually do give you "an additional week's work a month". If that extra work doesn't materialize, the discount does not apply. Maybe think about asking for more than that as your opening offer and let them talk you down to that.

If they want to stick to the discounted rate, see if they will agree to pay you for at least X numbers of hour per month. X should equal at least 2.5 extra days per month, even if they are not yet using you for those days.
posted by soelo at 10:13 AM on December 12, 2018 [18 favorites]

Best answer: Hi. I'm a freelancer, so I feel your pain. It's a hard situation to be in, but I would:
-- Absolutely walk that discount back. "We negotiated this rate based on the idea of X hours/days of work per month. Since that projection turned out to be incorrect, I'll be returning to an hourly rate." You're not asking them. You're telling them.
-- "My rate for 2019 is Z." Charge the market rate. Do not discount. Yes, you could be replaced. We can all be replaced. But there's going to be inertia on their end: it's easier for them to stick with someone who knows them/the work at hand.
-- At the very most, you can think about offering them a discount AFTER you've achieved Y number of days/hours of work per month. It should be short-term only: meaning, it kicks in for one month but then resets. They shouldn't be able to get a year's worth of discount by using you a lot in, say, January, and then never again. Use calendar months to make it easier on your end.
-- Put a decent amount of energy into trying to attract new clients. Charge new clients Z or Z + a little more.
posted by BlahLaLa at 11:26 AM on December 12, 2018 [17 favorites]

it is common to up your rate every year, or every time you renew a contract. up your rate back to what it used to be.
posted by misanthropicsarah at 11:28 AM on December 12, 2018 [5 favorites]

Yep. You negotiated a new rate a year ago. It's common to re-evaluate rates and year end, and often to raise them. This wouldn't/shouldn't raise eyebrows in normal circumstances. Since you have slightly less than normal circumstances, you should definitely walk that discount back in any case.
posted by ImproviseOrDie at 11:37 AM on December 12, 2018 [1 favorite]

Best answer: Yes, give yourself a 10+% raise every year, possibly 20+ this time since the client is kinda bad, interactionwise.

You got lucky that your client suggested the day rate originally, because lawyer-time accounting is a drag, and day rates are much more professional (strive for weekly rates!), but from now on you should set your rates. You draw up the agreement for them to sign. Large companies aren't crippled by you charging $2000 more per week, and there is a truism in consulting/freelancing that higher rates get you better clients.

The one thing I'd add from between the lines here, is: get more clients! Honestly your situation sounds similar to mine when I was trying to freelance 5-10 years ago. I failed to get more clients and much sadness resulted until I threw in the towel. If you don't actually like networking and selling, do try to use your work with this client to get a salary job before your portfolio gets stale.

Lastly, and this is an important subtlety: raise your rates, but keep the discount going, maybe reducing it to 5% with a time limit ("if paid within two weeks of the invoice date" or similar), but don't get rid of it. The internet is full of stories about people having trouble getting paid from both large and small companies, and one thing I learned along the way is that if there is a discount available, a lot of companies have to take it, so you can use a small discount to ensure you're paid promptly. Alternatively, I've seen other people advise a clause that says "if not paid within a week of invoicing, work stops until payment is received."

Good luck!
posted by rhizome at 12:40 PM on December 12, 2018 [4 favorites]

As others have said, use the new year to re-set your rates. Continue offering the discount, but under the conditions that Soelo said above.

And get more clients. You have way too many eggs in one basket, and shit happens.
posted by spilon at 1:29 PM on December 12, 2018 [1 favorite]

You could write the contract so that X number of hours equal to your normal yearly load is charged at your previous, non-discounted rate. Once the client has reached X number of hours in a year, the rate converts to a lower, discounted rate for the balance of the work. That way, you're assured billing your expected number of annual hours at your standard rate, and the client is incentivized to give you more work so that they can get to the discounted rate faster. I wouldn't build a discount into your monthly charges, I'd count the hours charged in a year so that a lighter month or two doesn't collapse your overall rate.
posted by quince at 2:22 PM on December 12, 2018 [1 favorite]

Response by poster: Thanks everyone!

I'm emailing now. In case anyone happens to be checking back on activity this afternoon, does this sound OK?


[Greetings, friendly blurb]

Our contract from 2018 is up now, so obviously I’m hoping that you still want to continue working together on X projects? If so, I’d like to return to the agreements previous to 2018, where I invoice at the end of each month for the hours that I’ve completed during that month and at the original rate of £Xph + VAT.

I can draw up a contract for the year based on [the monthly work in hand at the moment]. As previously, we could then agree any additional work - Y projects and campaigns - on an ad hoc basis. Any new monthly requirement, such as the Z programme [the one yet to manifest], could be put as an addendum to the contract once content production begins.

[Suggest Skyping if need be. Over and out.]
posted by doornoise at 7:22 AM on January 4, 2019

Response by poster: Just had a Skype call with them and problem solved. Back to the original rate with no discount structure.

Thanks very much to everyone who offered advice.
posted by doornoise at 7:04 AM on January 9, 2019 [2 favorites]

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