One of the most underrated pieces of advice I would give to a younger version of myself, and in fact, a younger version of anyone (and most older versions, as well) is the following:
You will never get your hourly fee just right. Therefore, whatever you charge, it will actually be slightly too high, or slightly too low—or maybe a lot. And whether it’s too high or too low, you have two strategies: if it’s too low, it’s okay to charge for every moment you work and every little expense; but if it’s too high, don’t charge for every second and every little expense.
Let me explain. George Carlin has a great observation: when you drive down the highway, every other driver is either a maniac speeding too fast, or a grandma barely crawling along. The genius of his joke is that (in true Carlin-style) it makes a key insight that balance is difficult and you will never get any balance right. You’ll always be a bit too much to the left of the scale, or to the right of the scale.
And in terms of how much you charge and clients pay you, this observation is as true as always. Your hourly will never precisely reflect your value or what the company can or is willing to pay. It’s just a proxy. And as a proxy, it could go a bit towards either side.
But in terms of making your clients happy, remember they don’t just judge you on an absolute level—they always judge you in relation to how much they’re paying for you! So, if you’re charging more, there’s a much higher expectation than if you’re charging less. Expectations are embedded in the price. Always. (This is also one of the least obvious points of investing in the stock market: a stock’s price already includes, embedded in the price, the expectation of future value. Thank you, Mr. Weintraub, for teaching that to me 15 years ago.)
So once you have your price, it will either be too high or too low. And you know it. You know whether you are being underpaid or overpaid, even if it is just by a tiny amount. Follow your gut.
And then, depending on what your gut says, if you’re being overpaid, and you ALSO charge for “oh, I spend 1 minute in the shower thinking about my client, so I will charge in for that 1 minute of work” then you ARE the definition of an A$%^*)&$)@#$. Please don’t do that. They’re paying you a lot and only the most horrible lawyers everyone hates do that. And they fire those people the first millisecond they get the opportunity to do so. Just put yourself in their shoes, would you want someone who isn’t just charging you a ton (remember, you’re overcharging) but ALSO charges for time in the shower? C’mon!
But on the other hand, let’s say you’re undercharging, even if just a bit. Then, you have much more flexibility. The client knows that he’s getting great value from you and benefiting from your work substantially more than he’s paying you for. As a result, it’s no problem to say, charge for the time you were stuck in traffic to go to the client’s work (transit time), or time you are unclear whether you should charge for (you took an extra 2 hours for something, but maybe because you didn’t know much about that issue so you had to spend some of that extra time learning; or maybe it took longer because you made a mistake and you were fixing your own mistake.) When you’re undercharging, you can charge for all these ambiguous cases and very granularly, and it won’t be a problem, precisely because you’re undercharging.
Conclusion: follow your gut. You know which side of the scale you’re on. And then, once you’re on one side of the scale, don’t be an A$%^*)&$)@#$ about it.
