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Any one understand the rationale why consulting firms still charge by the hour!? It's not like 19th century where more manual hours = more work

Comments
  • 9
    Because people are generally paid by hours?
  • 9
    Because it make sense
  • 7
    Project timelines can creep or should I say landslide out the ass end, they need to cover their financials in the event that happens.
  • 8
    Paying by the hour seems logical to me. If I spend twice as long working on something, I should earn twice as much. I can't bill based entirely on complexity because there's no easy way to prove it. But hours are easy to track.

    Also, time is money. More time, more money.
  • 9
    Pay me for lines committed and watch me come up with a reason to commit node_modules.
  • 6
    Because you're an idiot if you ever commit to fixed bid contracts for anything of size. T&M or GTFO.
  • 3
    While paying by the project is definitely better for everyone involved (when accurate), complexity is an incredibly difficult thing to predict.
  • 1
    On a more serious note - because this is something that actually took me years to concretize. The work includes/is the bits where you're staring at the screen trying to figure it out. Even if you are an omnipotent oracle in whatever language, this will still be your first time figuring out the business logic for the spec.

    If I got penalized for reverting a change that didn't do what we needed, or by spending 10 hours to avoid 5 bugs that we later could spend 10 hours each to fix (would the latter be "more work delivered"?) I would walk out on the spot. Easy.
  • 1
    Because most of them don't know or want to use Value-Based Pricing or Project-Based Pricing.

    And it seems quite _popular_ to have consultants seating on their asses or trying to squeeze as many hours out of the projects to get more money. Of course, not all consultancy firms do that but such pricing method often invites for hourly inefficient work (at least from what I've seen).

    And also, it's not as easy to do VBP/PBP compared to the hourly one and not many people seem to venture in those directions.
  • 1
    you buy knowledge, not a product. why i would learn 10 years to have expertise and give it away for cents?
  • 2
    Because it's better to say:

    "Give me 200€ per hour and I think it'll take 100 hours"

    ...than to say:

    "Give me 20 000€ now and then more when I am still not done after 100 hours".
  • 3
    I run a consultancy--it's because that's the only way to convince a client not to ask you for features you didn't agree to build and then threaten you with a lawsuit if you tell them no. I know that sounds crazy, and that must be a rare occurrence, it has happened to me twice. Client gives you information regarding their business, you deliver their app, then they say it won't work. You point out that it looks exactly identical to the designs they approved, and perfectly matches the spec sheet they signed. Doesn't matter. Doesn't work. Their money is useless, blah blah blah. In the US at least, it really doesn't matter who's right or wrong in a case like this. There are eight of us, we can't afford a lawsuit of any size. They are a larger organization with around 150 employees. What they want, they'll get. It can still happen if you charge hourly, but it is much less likely in my experience.
  • 0
    @timothyfarrow Ah I wasn't aware of this, I can only imagine it'd suck to spoil client relations like that.

    Does this problem also apply to the larger ones like Big4/MBB firms as well?
  • 1
    @Root That was essentially my line of reasoning.... estimate complexity to a reliable level, estimate time and charge by the project. This would eliminate the nuances of filling in time sheet hours and improve overall efficiency
  • 0
    @ltlian Wasn't exactly referring to pay by lines committed. More of a complete project based charge. I get your second comment though, thanks
  • 1
    just stop such stupid questions and comparisons
  • 0
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