Professional fees

General Questions
#1

Until recently I hadn’t really worried about this situation. About a year ago I was talking with another consultant in my business and the subject meandered into ethical questions. While this other fellow was summing up a general outline of his professional code of ethics, he made the statement, “…and I charge everybody the same rate.”

Well, I don’t charge everybody the same rate and I hadn’t really thought of myself as facing an ethical quandary. Now I’ve come to realize there is some debate in fields related to mine on this subject.

I’ve gathered that the guts of the argument for an unvarying rate is that you’re possibly perceived as taking advantage of someone if you charge them a higher rate for the same kind of work. Contracts and the type and amount of work they entail vary and differences in compensation on that score are quantifiable. The grey area arises from the differences between clients. Whereas there are people who seem to interpret charging different clients differently as taking advantage of some, my perspective had been that of trying to help out some who are less able to pay or reward those who provide regular work or don’t make me wait 90-180 days to get paid.

Anyway, long preamble I realize; question:

Is it somehow unethical to charge different clients at different rates for the same type of work? Why?

#2

I have not had any “clients” other than yard customers; for these I used two main criteria: The size of the job and my appraisal of the customer’s ability to pay. (I once spent nine hours painting wrought-iron trim for a customer and they paid me five dollars! Naturally I never did that work for them again.)
I used to work in a legal clinic in Los Angeles; I would answer clients’ questions about fees feom a rate schedule we were issued: involving the prospective client’s taxable income, or whether or not the person receives welfare, SSI, or other public benefits. The agency was, and is, dedicated to serving low-income clients; the “ethics” of charging different clients different fees is moot.

#3

Nah. You’re just making up for the big corporations that give their buddies “volume discounts” while stiffing the individual purchasers. < eg >

I would not consider it very ethical to charge two similar customers different rates because I “liked” one of them. However, along with the idea of “ability to pay” that you and dougie_monty have mentioned is the aspect of value recieved.
Suppose that you can throw up a simple web page in x hours. You do pretty much the same work for the local flower shop and the Fortune 500 giant around the block. Despite the fact that your effort is identical, there is a huge difference to the two customers. The flower shop will probably not live or die depending on whether the web site is functional while the big company could lose hundreds of thousands of dollars in orders if their site is down. Your effort is the same, but the value to the customer is remarkably different. The corporation needs more reliability from your efforts, they will reap more sales because of your efforts, and they can afford to pay more for your efforts.

Having said all the above, I do not have a specific belief on the subject. (I’m currently mad at big business, so my examples tend to be a bit skewed.)

These were just thoughts that occured to me as Iread your question. (The other thought that occurred to me is that this clearly belongs in the Great Debates Forum–or, at least, the Pretty Decent Sized Discussions Forum.)

Tom~

#4

I charge a non-profit organization less.
I charge a steady customer less (volume discount if you will.)
I’ll charge a premium if it’s a gotta-have-it-now-drop-everything type job.
And I always, always tell them up front what it’s going to be.

#5

Tom,
I always appreciate your input.

Hmmm…, Tom I hadn’t thought of it in that sense, but your perspective makes some sense. The cause of concern then is, adopting that view that those who have more to lose are subject to higher tariffs, are we not then taking advantage of them?

I pondered the appropriate forum before posting and chose GQ because I wondered if there existed “out there” some generally accepted ethical standard. I realize a question of ethics would most likely be a candidate for the GD forum.

kunilou,

Just out of curiosity, do you bid (or quote) based on a rate and estimate of time involved or give a turnkey price?

#6

I’m not sure what kind of work we are talking about here, but the market should be proportional to the value of the work, and if I’m overpriced, a client is gonna pass me up for someone cheaper. If the client can’t really afford the work he needs done, I might take what they can pay, I don’t consider this taking advantage of anyone except maybe me when I find that a client can, but just didn’t want to pay.

My origial bid usualy includes an hour estimate, but its often too low because the client misrepresented or changed the deliverables.

Completely disregarding the original bid because you think you can milk the client for some more cash, is of course highly unethical, and everbody knows it happens.

#7

If I can’t make $15-20 an hour, I often do it for nothing. Some jobs only take an hour [plus travel time]. If I want to get paid I have to invoice, which takes time, then waiting for the check, then writing back if they forget. Shoot, just easier to do it for nothing [except for parts].

I notice often if I do that, people tip bigger than i would charge them or they give me things I need worth far more.

#8

Professional fee ethics, why? If you’re charging an “unfair” fee then people won’t use you, I think it’s really that simple. I don’t see why you are so concerned with charging a fair price when people can look out for themselves.

“The first thing a man will do for his ideals is lie.”

–Joseph A. Schempeter

#9

I’ve cited this before, but…

So the judge says, “A divorce will cost you $10,000. You may think that’s a high price, but let me assure you, Bill Gates could not get it for any less. This is not a country where we have one law for the rich and another for the poor.”

#10

If you’ve ever sat through a day in traffic court you know people are often ordered to pay different fines for the same offense.

#11

I assure you doctors get very different amounts from different insurers for the same service.

Their “requested” fee is probably the same for all, but what they get is often less than 25% of that, especially from MEDIcare.

Sue from El Paso
members.aol.com/majormd/index.html