Ask HN: High end” consultants, what does your day to day work look like? | Hacker News Reader

Ask HN: High end” consultants, what does your day to day work look like?

55 pointsangarg1232 comments

I recently read patio11 article on pricing for consultants [1] and it encouraged me to think about freelancing/consulting for the first time in my career.

Currently I'm working at a big tech , and I estimate I would need to charge a few hundred dollars an hour (or equivalent) to maintain my income level. However I find it hard to believe clients would pay me that much to fix broken builds or hunt down bugs (a big part of the job now). I'd also be happy to move away from such tasks and into more energizing and valuable work, and increase my potential long term income.

What kind of task do well paid consultant/freelancers do?

[1] https://www.kalzumeus.com/2012/09/21/ramit-sethi-and-patrick-mckenzie-on-why-your-customers-would-be-happier-if-you-charged-more/

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To give you a bit of an lay of the land before you jump into (or even start researching) consulting.

There's mainly 2 types of consulting: staff augmentation ("staff aug") and engagement-based.

In the first case you simply work for the company the same way FTE (full time employee) would but it's easier for them to lay you off, and they don't have to pay you benefits. You typically would be paid much higher rate than an FTE.

You can either work for yourself, e.g., have a small LLC/S-Corp, or work for a company which matches employers in need of consultants and consultants looking to sell their skills. That company would typically get the percentage of your rate from your customer (this is sometimes referred to as "bodyshop" model).

As others already pointed out, one way to get work as independent staff augmentation consultant is to have an inside knowledge of a particular company and have them pay you for that knowledge. Another way is to specialize in a very narrow technology (e.g., Cobol) and be well known within the industry, and you will have a steady stream of work coming your way (until that technology becomes obsolete or otherwise loses relevance).

For engagement-based consulting work you come into a company to perform a particular project with defined end goals and the budget. You first pitch the project to prospective clients and if you mutually agree on the end goals and the cost, the engagement starts. Engagement-based consultancies have 2 sides to their business: sales side and delivery side. People on the sales side will be working with potential clients, looking for opportunities, pitching projects, and tending to any issues on the projects that they sold if necessary. People on the delivery side will be... well, delivering the service, or running a project.

Once the project is over, you either have to find a new client, or find a way to extend your engagement with the same client by maintaining or expanding the product you built, expand into the new areas at the same client, etc etc.

Hope this helps.

Fixing problems and adding value to the business can pay very well. Much of my freelancing work amounts to unglamorous but essential debugging of code and infrastructure.

The sweet spot for freelancing comes down to providing expertise companies don’t have in-house and can’t easily hire for. That can describe a lot of things. In my case it describes cloud infrastructure and difficult software bugs. In my experience most programmers working full-time jobs have poor debugging skills and limited expertise outside of their domain. Someone who has specialized in mastering, for example, Ruby on Rails likely can’t figure out a SQL database performance problem or how to set up a secure hosting infrastructure. You just have to figure things out quickly and solve problems.

You can’t look at it in terms of cost per hour. The correct way to value yourself its to determine cost or value to the business. That’s summed up in the old joke about the consultant who fixes a broken machine in a few minutes and bills $10,001 dollars — one dollar for pushing a button and $10,000 for knowing which button to push.

> bills $10,001 dollars — one dollar for pushing a button and $10,000 for knowing which button to push.

IIRC not a joke - was IRL.

The story has many variations. Likely apocryphal.

https://www.snopes.com/fact-check/know-where-man/

I saw a variation on this. Mostly with old legacy systems. At a well known grocery store chain (GSC) in Sweden they decided to outsource their IT department. Then realised that noone understood the AS/400 systems, so the outsourcing company hired the old GSC IT employees back at a much higher salary. One I spoke with basically tripled her salary as she was not interested to come back and wanted to scare off the recruiter and gave what she though was a fantasy number as monthly salary, and the recruiter accepted it within the hour.

An other guy I've spoken to, who is a retired sales person, and this is way back, he's dead now. He still got sales consultancy work from his old employer in the 1990s and early 2000's because he was the only person a very large Japanese company would deal with and refused to have their account managed by anyone else but in return they would not shopp around for cheaper prices. Apparently the guy had managed to impress during Nomenkai during the 1980s, and I think he managed to save the customers CEO's face in an unrelated matter without realising it until later.

Nomikai

I had a customer for years, was on retainer for a few thousand dollars a month. I knew their systems inside and out, managed their hosting infrastructure. They couldn't hire anyone to take over -- not a glamorous business, didn't offer competitive salary, not a great workplace (I worked remote). I reported to the COO and all was good, I would deal with whatever problems came up and implement whatever upgrades or enhancements they needed.

The COO left and the CEO/founder took over. I didn't have much day-to-day interaction with him before that. He called a meeting and told me I had to start submitting detailed invoices and charging hourly. I said no, I preferred the retainer arrangement and they got guaranteed priority response from me in return, and no unpredictable monthly bills. He then asked "What exactly are we paying you for?" I said they were paying me not to quit. He didn't exactly like hearing that, but after he talked to his managers he dropped the issue, and I kept the gig on retainer for two more years, until I fired them for asking me to do something legally questionable and definitely unethical.

>> "What exactly are we paying you for?" I said they were paying me not to quit.

Respect for that, I'm gonna steal that line :)

Go ahead!

Lots of people keep their jobs because the employer can't afford to lose them. That goes for freelancers too. I have freelanced long enough to know that a lot of people in my industry lack basic competence, or don't care about their customers over the long term. I have customers now worried about what they will do when I retire in a few years. That's not because I have so many special talents but because the smaller companies I work for find it very hard to find good people, and they don't have the expertise to judge whether someone actually knows what they are talking about or not.

It's an ancient joke, I read a version of it in a jokebook from the 1940s where the protagonist was a mechanical engineer who knew just the right place to whack a broken machine to make it start again.

All those stories about a priest, a minister, and a rabbi, however, are 100% true. I know because I was the rabbi involved.

That's why the cloud is sometimes A Good Thing - it creates its own Byzantine problems to long-solved issues that you can resell fixes for at $3k/hr as an "expert".

What a time!

No doubt. All of my customers moved to the cloud a long time ago. Without exception they either paid some outside company to do it and now can’t get support, or they had one of their own people who doesn’t know enough about it set it up. Cloud infrastructure generates problems faster than npm.

Consultant with 20+ years of field experience here. What I get tasked with mostly is code-reviews for security and performance, and fixing elusive (and painful) bugs. My specialty is to be able to rush in and take over from quitting employees and then train a replacement hire, or just help "put out fires". Over the years I've developed an intuition for where bugs hide. I just need an employee who works with the codebase to explain how the bug manifests. From there I can usually nail it in a short while. In short: experience gets paid.

to piggyback on one of your points: I see a lot of the same, regarding the rushing in and taking over from quitters. A surprising amount of companies have data platforms with a bus factor of 1.

On the data/analytics side it's a lot of documentation (though clients are often very hesitant to pay for that, which leads to more billing when I have to train replacements), trying to understand data flows, and rewriting band-aid solutions that have stacked up over the years. A fair bit of work goes into balancing what the client wants (new features/reports, new environments etc.) with what the client needs (stability/reliability work, documentation, scalable code).

Consulting freelance is more profitable than working for a firm, but also a lot harder. How will you find clients that have problems you can fix, how will you convince them to take you on, what kind of portfolio/experience can you sell them, etc. It dances this very interesting balance of being a salesperson, a technical expert, and a good communicator (I've often found that these are skills that are NOT positively correlated with one another). Unless you are confident that you will be able to sell yourself, it's easier to start with a firm to learn the role and build a network, but you know your own situation best

Is it you, Mr. Winston Wolf?

I am very curious and trying to learn different ways to be employed. Are you interested in taking an apprentice under your wing?

To charge a lot, you need to either have very specific skills, or you need to be engaging at the right level.

A lot of the time you'll find yourself at the extremes - either incredibly technical, no one else knows how to do this.

Or, extremely strategic/high level - fractional CTO/Engineering Director type work.

The danger with the latter type of work is that you are often involved because the exec team does not like what their tech people are telling them. e.g. The CTO is saying one thing and the board/CEO want to hear something different.

Is it equally challenging to acquire the skills to acquire leads and deals? I have some experience with dealmaking but literally no idea what the playbook even looks like for a technical consultant at this level.

Where does one learn how to do this? And are there any online communities dedicated to supporting this profession and those seeking to enter it? There are books on how to pass a Google interview but I haven’t stumbled across much in this department yet.

I’ve considered a website but a compass would be even better for starters.

No, it's harder

There are quite a few communities of fractional CTOs now that can be very useful.

A good source of prospects and probably quite a good training ground will be whatever local incubator/coworking space is near you. Networking with the founders there and finding out what challenges/problems they are having. Get well known amongst them as someone who can actually help and word of mouth will get you more work.

It’s a lot of work and it’s not easy. It helps if you’ve already held senior roles and been through the journey that a lot of these businesses are on.

It’s will be hard to pívot to it from just being a senior engineer or even staff engineer. Sadly you really need the job title before you will be allowed to do the job.

There are however a lot of non technical founders who need technical guidance. Being their tech sounding board can be very valuable.

End of the day, to make it work you will need to be an amazing networker and you will need to be very credible.

You want to be at the point where people at the board level know and respect you. When they see problems in their companies you want them to be recommending bringing you in to help.

Not sure if I am high end. But I am a consultant. All my daily tasks revolve around making sure that what's going on (day to day) on a particular direction is expected, sensible, understandable to the key stakeholders, and (most importantly) contributes to the company goals. I have to use my expertise to get all the information and insights myself, because I am almost never told what's going on and what's supposed to be going on and why. I tally up the aspects of the big picture almost daily, by talking to people, reading docs and code, connecting all the layers, comparing to the desired state, and then inferring the tasks for myself and my team. Which can be very different in nature from this week and the next.

>I now rarely do consulting. I turn down the vast majority of clients. When I do charge, I charge $3,000 an hour.

A 40-hour week at that rate is a cool $120k. Whew.

I suppose I can kind of see it making sense in situations where there's a time crunch, the stakes are high with a lot of money on the table, and highly specialized knowledge and/or exceptional leadership is required—with a very low amount of billable hours.

So basically the plot to Inception.

You can’t compare spot rates like that to a sustained income. A huge part of high-end consulting is doing administrative, marketing, and sales work that’s unpaid.

>You can’t compare spot rates like that to a sustained income.

Fair enough. Although my comment was somewhat tongue-in-cheek, I was legitimately shocked at that rate. Personally, I view a week to be an extremely short-duration contract. A "spot rate" is presumably much shorter still (there's very little information for the term in the context of software development).

I suppose the curiosity I have is: what's the rate falloff typically like?

For example, an individual is able to earn a $3,000/hr spot rate.

What's their rate likely to be for a week? A month?

>A huge part of high-end consulting is doing administrative, marketing, and sales work that’s unpaid.

May I ask why it's unpaid and not covered by the contract?

It’s administrative/sales/etc work for the consulting business, not for the client.

There’s something fishy about the $3,000/hr rate, though, because the high-end consultants I know—and I suppose I count myself among them—don’t charge hourly. Many charge a daily rate, and the higher end ones charge a monthly retainer. I personally do fixed-price work with the occasional monthly retainer.

(This is excluding consultant mills like McKinsey, which are a separate breed.)

I’m not going to share details, but with some mental gymnastics, I suppose I could find a circumstance where I earned thousands in an hour. But that isn’t reflected in my yearly revenue figures, because it excludes the time in spending on marketing, figuratively waiting for the phone to ring, and other non-revenue-generating activities.

>It’s administrative/sales/etc work for the consulting business, not for the client.

Ah, right. Apologies, my head was still in short-term, executive-level emergency staff augmentation land when I asked that.

>There’s something fishy about the $3,000/hr rate, though, because the high-end consultants I know—and I suppose I count myself among them—don’t charge hourly. Many charge a daily rate, and the higher end ones charge a monthly retainer. ...

Yeah, that was my understanding as well—that hourly is less desired and not very common on the higher end.

Thanks for the reply.

I run CRFYI, a site that basically operates like levels.fyi or glassdoor but tailored specifically to freelance/consulting rates.

I'd encourage you to check out some of the submissions on the site to see what people are doing when they earn x amount of money per hour. Don't want to spam the link everywhere but it's in my profile.

Like any service, price is a filter, on both sides. If you're hiring a consultant and they're way cheaper than everybody else, red flags start to go off. Why are they so cheap? Same on the other side - if the consultant is very expensive, you wonder why, and generally conclude that they must be high caliber at what they do. If you have the budget for it, you'll almost always prefer the person that seems to provide the "premium" service.

A funny part of it though, to appear as a "premium" consultant, you don't really need to do anything differently than a regular consultant. You just need to have way higher rates, clients make the assumption from there.

You run a site which is patently relevant to the discussion. Save your comment readers a click! https://contractrates.fyi

This is great Thank you for making this

Nice site. I question the design decision to require a visitor to "add a new rate" to see existing pay though. It seems to incentivize making stuff up and brings the reliability of your data into question.

Thanks! It's definitely a valid point. We do get a lot of made up, totally BS data from people doing exactly what you're suggesting. It's usually obvious though and we filter it out. Nothing gets added to the primary DB without us looking at it first. If it looks anomalous, we'll deny it. You don't have to add a rate though, you can still view 99% of the data without doing that.

Things we show to everyone, regardless if they added a rate or not: - Title, location, hourly rate, skills, industry, org size. - Role based search

Things that are locked only to people that made submissions: - Additional notes by submitters, which only about 10% of submissions have - Charts, which are really just formatted versions of the already available data - Location, skill based search - Project based rates (we will eventually unlock this similar to hourly rates, but for now, we don't have enough data and are really in collection mode)

We are actively working on a feature for verified rates though, where we validate that the submitter actually earned the rate they claimed by requiring additional information.

As a side bit, I encourage people - if you don't have a rate to submit, just submit a rate with total default values and leave a comment saying "dummy rate". We will filter it out and you'll still get access to everything.

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