Reply to: Mid contract negotiations (rate increase)

[FreeAgent]

the other is a new contract which should command a new rate (else you will be under client direction)

I had the agent re-write the contract - with responsibilities etc changed.

so in neither case have you actually challanged a running budget. A rate increase against a planned burn rate causes a different set problems.

Agree - but in the second case maybe they had a budget - or they were just looking to do it on the cheap

If you were an agent it would be different if you were just taking a better part of his cut. You didn't mention if this was via an agent or not.

Unfortunately, most agents I have worked with have been useless in dealing with the client - so I don't involve them, I renegotiate direct with the end client.

These examples are not quite the same as the OP just asking for an unqualified rate rise cause they think they are worth one.

Agree - I thought his role had changed. In my case, everyone in the bank assumed I am in-charge of the project - including the MD running the division, so getting a new contract with the right rate was a no-brainer.

I am glad you liked some of the comments - I hate contractors/umbrellas who cannot get out of permie mindset and treat expenses as 'perks' on the 24-month clause etc- they are business expenses. No wonder HMRC is peed off and wants to correct the situation.

[northernladuk]

I have re-negotiated my rates mid contract twice and I have got it both times. There are no empirical formulas nor a accepted procedure/practice. Judge your circumstances, weigh all the results of the outcome and be prepared to be 'equally' happy to deal with any outcome.

This how the scenarios unfolded

1st Renegotiation

At a Merchant Bank in the City got a 10% rate cut (around the time Lehman went Bust) - looked around for a role - got one, asked for the old rate to be reinstated 6 weeks into the reduced rate, had a 24 hr Mexican stand-off - but got the rate restored.

2nd Renegotiation

A different Merchant Bank in the City, was recruited as a senior technical consultant - but 3 months into it became the project manager, lead BA, technical guy, test co-ordinator /manager - asked for a 100 quid/day more and I got it.

I have subsequently have had a 10% rate cut (mid-contract!!!)

Both good news but with my pedantic head on one is fighting off a cut and the other is a new contract which should command a new rate (else you will be under client direction) so in neither case have you actually challanged a running budget. A rate increase against a planned burn rate causes a different set problems. If you were an agent it would be different if you were just taking a better part of his cut. You didn't mention if this was via an agent or not.

These examples are not quite the same as the OP just asking for an unqualified rate rise cause they think they are worth one.
[quote]

- I dont cite inflation, mortgage rates, cost of living, kids, holidays etc and ask for a raise mid-contract - unlike clients who talk about market conditions / quarterly result and apply a rate-cut.

Love this. The number of times contractors believe they need a rate rise because they are now over the 24 month rule etc. Like your personal costs are an issue to the agent/client. What is an issue is if you are willing to walk fair enough, but your extra travelling costs are no business of theirs.

As far as reputation and burning bridges go - most agents/clients have a short memory and besides I don't want to do business with people who carry baggage of dented egos.

Nice point.

[FreeAgent]

I did get a 100 pounds/day increase

Hi,

I lurk here a lot but don't post often, probably because there are lot many posters who have more experience and I think I cannot add much value.

I have re-negotiated my rates mid contract twice and I have got it both times. There are no empirical formulas nor a accepted procedure/practice. Judge your circumstances, weigh all the results of the outcome and be prepared to be 'equally' happy to deal with any outcome.

This how the scenarios unfolded

1st Renegotiation

At a Merchant Bank in the City got a 10% rate cut (around the time Lehman went Bust) - looked around for a role - got one, asked for the old rate to be reinstated 6 weeks into the reduced rate, had a 24 hr Mexican stand-off - but got the rate restored.

2nd Renegotiation

A different Merchant Bank in the City, was recruited as a senior technical consultant - but 3 months into it became the project manager, lead BA, technical guy, test co-ordinator /manager - asked for a 100 quid/day more and I got it.

I have subsequently have had a 10% rate cut (mid-contract!!!)

Few principles I apply and I understand that it may not apply for all

- I do my work professionally and do not give a damn about clients/agents. 10 years ago I left a premie role only for the agent/client to withdraw the contract.

- I have worked on a project where the client has refused to pay the last invoice (small 5 people consultancy firm in the City) and the agent liquidated the company as he could not pay.

- I dont cite inflation, mortgage rates, cost of living, kids, holidays etc and ask for a raise mid-contract - unlike clients who talk about market conditions / quarterly result and apply a rate-cut.

As far as reputation and burning bridges go - most agents/clients have a short memory and besides I don't want to do business with people who carry baggage of dented egos.

PS: I am going back to the 1st IB where I had renegotiated, through the same agent/agency - working on the same project. Don't want to be a PM and reversing the 10% rate-cut helps.

[BolshieBastard]

Sounds like he didnt ask for an increase after all. Im sure he would have pointed out to all that he did in the reminissing post.

[Scrag Meister]

Personally I wouldn't ask mid-contract, I'd wait until renewal.

You signed the contract and have been taking on this extra work, I'd just slow it down a bit, taking a bit of the slack but not all of it and wait.

[psychocandy]

Heres my take:-

Asking for increase during renewal negotiations is fair play but £100 a day? Good luck with that one. In my experience, clients tend to think that whatever rate they give you to start will be good for the next 50 years.

Not to say dont ask but like someone said the client will usually need a BIG reason for any substantial increase. Again, it always seems to me that the once you've been with them a while the client usually moans that contractors are costing them a lot so an increase is way out of their scope.

Usually when it gets to this point, you've just to hope that they can't do without you and dont try the rate cut bollacks.

As for mid-contract, to be honest, I'm not even sure I'd ask unless the role was significantly different to what I signed (Then as NLUK says its got IR35 implications surely?). Client might think taking the piss.

[MyUserName]

I say do two things:

1 - walk in there and demand the appropriate raise and threaten to walk if you do not get it.

2 - send me details of the client so I can apply for the vancancy that has just appeared.

[northernladuk]

I was thinking about this thread the other day?

In terms of an update, the contract ended last year but I spent a really good 12 months plus there. In the end only myself and another guy survived the project to delivery, all those other colleagues were routed out and replaced (or not renewed) as the project progressed.

So what is the update here? You got your rate rise or are you just reminising?

Probably useless to make comment on this thread now but....

Agreed, but you've agreed to provide a certain level/scope of services, not all services the client might happen to send your way, expecting it to be done for the same fee.

I'm in the same position by the way, about to renegotiate at contract renewal. Build a factual demonstration of how the level/scope of services has changed number/size of tasks/projects, level of interface within client org., number of people to manage etc.

So you are demonstrating that the client has directed you away from the existing scope so putting yourself inside IR35?? You have to be very careful here. I would be looking for a new contract covering the new deliverables, not just a rate rise here.

[Barley]

I was thinking about this thread the other day?

In terms of an update, the contract ended last year but I spent a really good 12 months plus there. In the end only myself and another guy survived the project to delivery, all those other colleagues were routed out and replaced (or not renewed) as the project progressed.

[AnthonyQuinn]

Why would the client increase your rate?

Just wondering what the collective opinion is in terms of potentially pitching for a rate increase mid contract.

Initially I was happy with my rate but now im finding it a little frustrating to be on a finacial par whilst informally taking a more senior role. Ordinarily thats something id accept as it goes with the territory, however you accept a rate on vaguely defined responsibility and little or no knowledge of the structure youll be working within.

Thank you

I have always asked for rate increases only on renewal. The questions you need to ask yourself is
1. Why would the client agree to increase the rate? What do they gain?
2. If they say no, and you say, ok, does that lower your credibility? you should be ion a position to walk if they dont increase.
3. What is your worth in the market? Does it depend on what role the client is willing to offer you? Or do you have an intrinsic worth based on the market which you base your rate expecttaions on?

[TFour]

generally rate increases should be done at renewal time since you've alread agreed
to provide services for a fixed period and the client has secured the budget for this period.

Agreed, but you've agreed to provide a certain level/scope of services, not all services the client might happen to send your way, expecting it to be done for the same fee.

I'm in the same position by the way, about to renegotiate at contract renewal. Build a factual demonstration of how the level/scope of services has changed - number/size of tasks/projects, level of interface within client org., number of people to manage etc.

[Not So Wise]

Unless the position/role is vastly different to what was speced/agreed to at last contract discussion, requests for rate increases mid contract never go down well

[malvolio]

OK, let's put it this way...

You ask me for a rise, I will ask what have you done over and above the job I pay you for?

You say you're doing higher level work, I'll ask you how much have you saved me?

You say you're doing the job very well, I'll say that's what I pay you for...

If I have to make a cost reduction to a live budget (or P&L) then I will look at lowering rates where I can. After 20 years in management I have yet to be in a position where I might want to make a cost increase.

You are an asset as long as you deliver what you need to deliver, and I will happily pay you the agreed rate as long as you do. But unless you add significant value to the deal, you are not worth a rise.

Understand?

[lukemg]

I wouldn't consider doing this mid contract, then again some clients think it's ok to push a pay cut mid contract too ! These types of informal supervision arrangements are common and happen organically so unless you have specifically been asked to perform this role, it's unlikely you will get instant recognition. I would keep in mind any obvious areas that you have taken the leadership role which you can mention later. Often, when you push for a rate rise (other than an annual bump) the agent will ask for evidence of increased responsibility or a change in the role.
I would also be careful that your own impression of your worth matches the view of others (especially budget holders). From performing a number of performance reviews over the years, I know that a person's own perception of their work ability can vary widely from everyone else's view of them. Almost without exception they value themselves higher. This is dangerous for permies but can be fatal for a contractor who gets too ahead of himself.
In short, wait for the offer of renewal and push hard for a rise. Over many years I have been in similar situations and almost never managed to squeeze a decent rise (>10%) from an existing contract.

[rootsnall]

then again have worked in an above scenario where one mercenary has taken 'command'.

And that individual is usually nowhere near as good as they think they are, and gets kicked out first when they start acting above their station.

If you are happy enough with the client then I'd wait until the end of your current contract, even if you are the gun contractor, mid contract demands won't go down well with most PMs and it will come back to bite you. If you don't really care about getting booting out then go for it.