Here are some additional considerations that enter into determining a reasonable and acceptable rate.
Let me preface these considerations by noting that my PhD is in Sociology, MA in Economics with three years of undergrad physics so my statistical training has been in the kinds of courses taught in engineering schools (engineering measurement), social statistics and econometric analysis rather than in a statistics or mathematics department. So my comments may or may not be relevant to the more pure situation of starting to to consult from an academic statistical position where your role as analyst and as an indicative consultant for an outside client may focused on answering technical questions without developing a full understanding of context.
Social justice & Inclusion. If you are on the corporate side of an issue that requires statistical analysis, the going rates are much higher than if you are assisting a group of citizens or a non-profit that is challenging some corporate action. If you want to be on the side of the people, my experience is that it does not pay enough to support regular practice. The only situation where I have seen this work is if you are both an applied statistician and an attorney. But, you can work in a few projects of this type if your university position or your corporate and government consulting practice is strong enough to enable taking a loss on these projects. Often, if you are approached by a group of citizens or a non-profit or community group all they will have to offer is $3000 or $5000 plus expenses. And you will be the only one or one of a few members of their team. Typically, the corporate side will be thinking in terms of spending $500,000 to $1,000,000 or more on a combination of legal and expert analytic talent, just as a normal and expected price of doing business. And their team will cover areas of concern in depth with excellent specialists so that every relevant area is covered by someone who is at the top of their form. Sometimes the community group will offer only expenses, and that means expenses for a low-end hotel, discount airfare, and a small daily amount for meals. So, if the technical issue in dispute has social justice aspects and you are concerned for inclusion and social justice in decision-making you will need to take these things into account.
Corporate consulting. This is where the money is. It helps to understand the importance to the corporation of what is being contested – if something related to the core interests of a corporation is in dispute, what they are prepared to spend on a combination of legal talent and analytic talent is whatever it takes. Also, they will commit funding with ease and if you report to an officer, they are able to make decisions and honor "handshake agreements" (followed up by a contract) to get you on the ground and running immediately and accommodate changes in scope. However, if the issue is limited to technical concerns and does not have specific officer support, what they will expect to pay is much lower, managers are usually bound by rules and processing takes much longer. Officers usually are something like princes – they can step outside the bureaucratic rules and make the paperwork flow overnight. In the best corporate work situations, you report directly to an officer. As has been pointed out on this thread earlier, when an assignment involves expert witnessing (or providing analytic support in a juridical situation) you are providing litigation support. These situations work by (what, until you learn them are confusing) legal rules that often contradict rules of science. For example, any mistake in any part of your analysis – however irrelevant to your argument – may cause the whole analysis to be rejected by a judge or a hearing officer under the doctrine "falsus in uno, falsus in omnibus". If this happens to you, you lose your credibility and your usefulness to the client. Your personal risk is very high because the proceeding is not under science rules. It may take three or five years to learn the tricks opposing lawyers use to undermine scientific testimony (and there is always a new trick to learn to be ready for) – but in juridical settings we learn through experience. Under these conditions the client expects to pay a higher rate in recognition of your risk.
Government consulting. As noted earlier in this thread, there are often caps and limits. So, for example, if you are charging $225 or $250 an hour for regular analytic work for corporations (and $350 or $450 for juridical work) you may find that city, state, or federal government will cap you at $175 an hour, $125 an hour or even as low as $75 an hour.
Also, federal, state and local government will typically require you to follow federal expense guidelines, even though you are not a federal employee and are not entitled to government employee discounts on travel. Usually they will whatever it costs for airfare or a rental car. But where you lose is on the cost of hotel nights, meals and incidentals. So, your pay will likely be low and you will have to pay about half of your hotel bills (they will pay up to the government room rate plus taxes on that lower amount). Always ask if the hotel will permit you a government rate even though you do not have a government ID, because you are doing statistical work on government service. Every once in a while a hotel will grant you the government rate, especially in the Washington, DC area.
When your are reporting to a seasoned government administrator, they will suggest that you build travel costs into your fees to escape the travel regulations. This helps them and it helps you. So, why consult for government rather than corporations? Partly because you can do some meaningful technical social justice work and get paid for it, though the work will be highly rule-bound in nature since it is work within governmental terms and conditions. But also because you can sometimes develop long-term relationships for projects that will keep presenting you with work over several years if you are consistently reliable and faithful to the mission of the agency and its managers.
In government consulting, if you are doing work related to defense it pays way over what Housing and Urban Development or Health and Human Services or the Department of Energy pay. This can make difference in the kind of hotel you can stay at and what you clear after expenses. Government is sort of in the middle – it often does not have the resources, speed or flexibility of corporations, but the people are good, the projects are sound and you can feel good about it because the outcome of your work is of benefit to society and the people.
------------------------------
Hugh (Gil) Peach
H. Gil Peach & Associates, LLC
------------------------------
Original Message:
Sent: 08-14-2018 19:57
From: Giovanni Petris
Subject: Consulting fees - hourly rate
I have been asked to do some consulting work. I am an academic statistician and I was planning to charge hourly fees. Does anybody know where I can find information about rates, or have any suggestions about current rates. I know there was an old survey about that on the newsletter of the Section, but it seems a bit outdated. Any fresh info would be welcome!
Thank you in advance,
Giovanni Petris
------------------------------
Giovanni Petris, PhD
Professor
Director of Statistics
Department of Mathematical Sciences
University of Arkansas - Fayetteville, AR 72701
------------------------------