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RE: SE Fees for Building

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Title: RE: SE Fees for Building

Jake Watson wrote:

"I don't think [billing] by the hour is the answer either.  It sounds like you are starting with a losing plan..."

Once again, Jake makes a good argument.  I would like to supplement that argument with one other perspective.  Billing by the hour becomes an increasingly flawed strategy as we individually and collectively strive for greater efficiency.  We consciously try to do more work in less time, and our clients eventually come to expect more for less.  Just a few decades ago, in the era of slide rules and T-squares, labor accounted for nearly 100% of structural engineering production costs and man-hours was the logical basis for billing.  Today, that is no longer the case.  In addition to labor, we now pay significant annual sums for computer hardware and software, ever-changing codes and references, travel expenses, marketing expenses, rent, professional liability insurance, etc.  Hourly billings cannot effectively recapture these costs.  In the future, as analysis/design/drafting becomes increasingly integrated and automated, labor will represent an ever-shrinking fraction of our production costs.  Consequently, billing by the hour will not be appropriate for technical professions such as structural engineering.

What to do?  Consider what you are actually selling as a structural engineer.  You are not selling drawings, specifications, or other "products".  You are selling your unique services.  More specifically, you are selling your special expertise, your personal experience, and your proven ability to creatively solve problems.  Good clients are willing to pay for the fair value of your services.  You just need to go find them [hint: most of them are not architects].

Regards,

Stan R. Caldwell, P.E.
Dallas, Texas 

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I have tried to lift France out of the mud.
But she will return to her errors and vomitings.
I cannot prevent the French from being French.
                          ...Charles de Gaulle
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