[nycphp-talk] Pricing methodologies, business practices and copyright

David Sklar sklar at
Thu Aug 28 12:13:10 EDT 2003

When I do consulting, I generally bill based on the time I spend on a
project. (Or I agree on a fixed fee with the client after estimating the
time the project will take.) One motivation for this is to emphasize that
what the client is paying for is my time and attention. Software I write or
recommendations I make for them are obviously a byproduct of that time and
attention, but what they are buying (well, renting, really) is me.

The language in the consulting agreement that I use (and in my professional
liability insurance) also reflects this. Except in extraordinary cases, if
something goes wrong and money has to be refunded (which has never happened
to me) the client is entitled to a refund of whatever they paid me, not
another amount calculated on the potential value of whatever software was to
have been developed, etc.

Within this framework, you have plenty of room to adjust fees based on
project complexity, how much available time you have, how badly the client
needs your services, what kind of business the client is (e.g. perhaps you
want to discount your rate for a non-profit whose mission you agree with),
and so forth.

As for copyright, I like to retain ownership of code and give the client a
perpetual, sublicenseable, whatever-they-want-to-do-with-it license. This is
primarily so I can re-use the code on other projects. Once you've spent some
time developing an web-based data maintenance interface, it saves everyone
time and money to be able to re-use it on future projects. If part of an
assignment involves developing something for a client that they want to own
and I can't re-use (because it's a core competitive advantage for them, they
want to keep it secret, or whatever), I try to adjust my fees to compensate
for that restriction.

If a potential client has a project in an area that I think is
extra-interesting, or I want to gain more experience in, then sometimes that
extra draw of a project is worth discounting my rate.

In general, I try to be as flexible as possible for a client. They pay me
some money to have my attention and skills focused on the problems they need
to solve. I advise them on how best to use my attention and skills, but
ultimately, the decision on how to deploy me is up to them and I try to
present a fee structure that reflects that decision.

Hope this helps,

On Thursday, August 28, 2003 11:56 AM, you wrote:

> Greetings...
> I would like to start a discussion of pricing and protecting one's
> work. This would not apply to employees but rather free
> lance/independent work.
> I believe that could be subject to many differing ideas but I'm sure
> that we will all benefit. To start the discussion, please advise
> regarding any of the following:
> Pricing methodologies...
>     hourly ... how to set rate
>     perpage ... how to reconcile complexity
>     royalty ... calculated as % of sale or other metric for right to
>     use software value to customer's business
>     other???
> Protection ...
>     Who will own  the software when it is complete.
>     Copyright ... are rights retained or is non-exclusive license
>      given to customer. Is software encripted with product like Zend
>      offers or do customers demand source. If source is provided, how
> can author protect interest when licensing software?
> Trade groups ...
>     Many trade groups have business standards... Is anyone aware of
> any group that has standards for either PHP or web programming?
> Would this be a good start for NYPHP business guidelines codification
> that could enhance our businesses.
> John
> ___________________________________________
> John W. Markert
> 14 Joanna Way
> Kinnelon, NJ 07405
> Phone: (973)838-8956
> Cell: (201)788-1740
> Fax: (973)838-4561
> email: markert at

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