Remote Consulting

There is much misunderstanding of remote consulting.    Many companies have been burned, sometimes badly, by less than ethical consultants who promise the world and deliver nothing.  They may have offshore outsourced a large contract, only two years later to be out millions of dollars and have no results at all.  They might have received incomprehensible spaghetti code or deliverables which literally are a black box to them and no one available to support that project after the fact.

Firstly, I am in the United States, working with Companies under the jurisdiction of Oregon state law and U.S. federal law.  One doesn’t need to worry about international law or lack thereof to ensure they are getting what they paid for.

Secondly, Contractual law enables fairly narrowly defined business relationships if one wishes to write them into a contract.  For example, I write into contracts support clauses as well as intellectual property defense clauses.  This guarantees after the project is complete, if there is a support issue, a question on implementation or God help us all, an intellectual property challenge of some sort, as long as payment is received, I am obligated to support the work.    These clauses are actually superior to an employee, for once that person is gone, there is no getting her/him back without some sort of renegotiation.

Many believe that team building can only happen in an office, or in a physical space.   Remote consulting is really more of a paradigm shift.   One can see from the massive build up on the open source community as well as social networking, the blogosphere, that advances in technology, when utilized, can structure a well organized and managed project that is almost superior to the traditional white board meetings on site.   The reason for this is the electronic paper trail remote communications generate.  Every instant message has a logging system.  Online meeting software literally enables users to control the other’s computer remotely.  VoIP systems have call logging (recording) capability.  For those who want to remember what was said, these technologies  are literally instant note takers and assist greatly in focusing meeting topics, clarifying requirements and detailing project execution.  With today’s technology, one can have an online brain storming session or white board meeting which is in many ways superior. The software itself logs everything, from chicken scratch to the seed of the next killer app for you.  Nothing is lost or forgotten by software, unlike my brain without a cup of coffee.

Remote access to CVS repositories, the advances in Subversion for software control, enable ease of project management better than peering over the Cube wall and asking if that class or function is integrated yet.

Sometimes, in spite of all of this, on site might be necessary.  This can be especially true in large embedded, firmware projects or large custom boards with integration issues.    I will come on site as needed in these cases.  One can be quite surprised at just how much can be achieved offsite even with large integration issues and possible software module resource conflicts and other integration bugs though.  I have been remote consulting for years and when the consultant is responsible, professional as well as the client, it is astounding what one can achieve remotely.

There are other sorts of consulting that require travel, such as to standards bodies.  My general rule of thumb is if the work itself truly requires on site or travel, I will do what it takes to get the job done in these cases.

Let’s Talk Consulting Rates

Anyone considering using a consultant needs to know their total outlay of expenses.   There are also different methods of payment for consultants.   I am a sole proprietor, for tax purposes.   This means all payments are 1099-misc., and you are contracting with a small business. It also means you are not responsible for FICA, additional social security, workman’s compensation, insurance, retirement, office space, utilities, recruitment fees or 3rd party add on fees.

To compare a 1099-misc. consulting rate to a full time employee salary, a good general rule of thumb is to take what the base salary would be and divide by 1000.   Let’s say you believe a skill set is market value @ $120k/yr, FTE.   Then, the corresponding 1099-misc consulting rate would be $120/hr.

I give different rates for different projects, skill sets and time lines.   Bear in mind, Consultants must be their own sales, marketing , accounting and tax advisers.    So for each new client, there is a period of negotiation and discussion where the consultant is not actually being compensated by the potential client.   All of these costs are small business expenses and should give a little insight as to why a consultant is not equivalent to a permanent full-time employee.    The reality, for a typical corporation in terms of total business expenses, the consultant can be less expensive or equivalent.

For those used to thinking in salary terms, these differences are critical to realize.   While one may perceive a consultant is highly compensated, in reality they are earning, in net income terms, probably the same as a full time employee or less.   More importantly your total expenditure outlays are the same or less.

Here is a employee true cost calculator which can assist in seeing these hidden expenses for those who think in terms of salary and not CFO/COO overall business costs.