Lets talk about design consultancies and gross income

I was just surfin’ a little and found a few notable design consultancies company information. It appears that decent size firms of 35 employees make about or less than 10 million a year. In my experience a staff of 35 at a consultancy sounds about right. Unfortunatley that firm folded.

If that isn’t too far off the mark then let me continue to say isn’t that slim pickins as far as money goes? I would think a more comfortable income would be somewhere around 15-20 million a year.

Isn’t 10 million (gross) or less for a staff of approx. 30 is a small amount?

…don’t forget freelance help as well!

Yes it IS slim pickens. I think the way current time/fee based models simply does not bring in the bacon. We’ve got to look for other revenue streams. If only we can charge like attorneys.

Ive kinda been thinking that Photographer’s model can work too, with the ideas of licensing and such?

There were some links about the topic of revenue models for the next generation of designers/ creatives.- but I’ve lost them… I’ll try to find them again and post them.

I’m not sure what you mean though MP- about charging like lawyers? Do you mean because they can charge down to the minute, or by amount they command?

Personally, I think there might be something to the idea of not being strictly on the front side of the life cycle. But I’m not sure you can make a career let alone a firm work on future unknowns either.

You’re right! Charge like attorneys or architects. We also need to get recent graduates and freelance designers (not all of them) taking on projects by themselves to charge an acceptable rate. Rather than a cheap by the hour fee which undermines the competition.

I agree. If we don’t value ourselves, who will?

The trouble is when we start to loose confidence, bet bullied, believe Asia will do it free and amortize it into the mold cost, or think people can “open source” it for free.

Good design has value. Great design has even more. Believe in, demonstrate, and charge your value.

I think making profits on royalties sound great but in reality, not many clients would go for that and just move on to the next designers that will work cheap. This could change if it became the norm in the industry and was expected. I know advertising or music industry uses different compensation models where the creator gets a piece of the action.

Most clients just want work for hire terms and all you can hope for is that your design makes them zillions of bucks and they come back to you and hire you for the same rate you gave them the first time. It’s like going to McDonalds and having a suprisingly tasty meal for $5. The next time they come back they still expect the meal for $5 again…eventhough you’ve proved your worth by helping hey make zillions.

Yeah it sucks to find out you lsot a gig to a low baller but that jsut tells you they are teh wrong client. Some clients do go to students or worse yet, get free design from the factories, albeit lousy design. I know others who can’t tell value and go to a big firm only to have it done by an intern unbeknownst to them.

I know of at least 3 second-hand examples when corporations are hiring design consultancies, simply based off of the firm’s initial quote and brief introductory communication-- the corporation will actually accept the highest bid.

Their line of thinking is that the lowest bid is the lowest quality. This is surely not true, but it provides an excellent example of the value the client will put on your design. If your work is done for $20 per hour, the client knows it, and it becomes just a side project. They may go spend $200 per hour to have it redesigned. It might not even be better, but they will listen to the higher paid designer as if they are a professional, rather than worker for hire. Regardless of it’s execution and professionalism, the value of the product/project is directly related to the price the client paid. The price you can demand and the client agrees to spend is a correlation to the confidence they have in the project and your professional ability.

If I were to go get a tattoo tomorrow, if two studios were precisely the same, one wanted $5/hr and the other wanted $80/hr… I would choose the latter.

Great… Now an MD, and an MP on the same thread.

I have to agree with you guys on the principles, regarding lowballing, and using younger, less experienced talent. But, its tough enough to get into a decent design position, let alone past the first couple years to re-learn how things get done- process flow- vendor correspondence- ect.

These younger/ aspiring designers have to take what they can get in some cases, just to get some experience.

I agree that licensing design sounds great, and the people/ firms have to pay the bills too. I guess I was thinking we might see some newer ideas of how it could work better- thats all.

I’m guilty of low balling. Oddly enough though, the only people who ever asked me to work for free were consultants!

im a big believer of the saying “you get what you pay for”. in my experience as a consultant (whether by luck or having good clients), ive never had a client come back to me with an issue of price. part of it i believe is the experience i bring to the table, but also is a factor i believe in clearly communicating what you are billing for. i make it a habit to make really detailed project proposals that outline every phase deliverable and estimated hours, but bill per project. this way, the client can see where the time/$ goes and what they get in return.

half the battle i’ve found is how you pick you clients. if you will accept anyone, just to make some coin, you are bound to have clients who dont really understand the process and value of design, and cost will always be an issue. plus, you’ll end up with a final project you are not happy with and not portfolio-ready if you pick your client/projects wisely,you’ll be able to charge a fair price, and in addition have the benefit of a great project that is worth even more in terms of portfolio and experience to help you move up the ladder to bigger clients and projects.

the only time i’ll lowball or quote low on a project is if its something that i know the client doesnt have the budget on (ie. a one person start-up), but the project is something i’d really enjoy and would get good experience from. its not so much about underquoting the competition, but putting the time into it for the result in product/self-marketing.


So, what is the hourly rate charged at a big name design firms?

Senior Designer:
Junior Designer:

I charge $250/hr. as an attorney, but by the time my clients haggle it comes down to about $175/hr. w/ lots of free advice - don’t shoot me.

I’m trying to add revenue stream, and get back into design by providing product design and development and market strategy to my product-based clients.

I have to agree with the point about young designers having a rough time as it is. I am one, and I am having a hard time.

I laughed at 914’s comment, because of my three internships, the only one that didn’t pay me was a consulting firm, but I’m not hurt about it, I would cut off the rest of my finger to get a consulting job right now lol. (shop accident)

Has anyone brought up the point of liscensing? architects, engineers even interior designers have to be liscensed in order to call themselves such. maybe if you had to be liscensed after going to a design school, we wouldn’t have all these people calling themselves designers after they went to a tech school and learned CAD for two years. Engineers couldn’t wake up one morning and deside they were a designer either. They can feel free to go to school and get liscensed, just as I would have to do if I wanted to be an engineer. you can’t just get some creative marketing guy to design your new headquarters, so why should he be able to design your new product and corporate identity?

Then once were getting more money, hire some newbies so the firm is the one paying them 20 an hour instead of the corporation needing the work done. Freelancing isn’t that appealing when your student loans kick in after 6 monthes lol.

Perhaps a third party group?

Requires portfolio review and/or phone call by a group of professional designers, pass or fail. Small fee required to get your portfolio reviewed.

I both love and hate this idea.

Hate it because I’m depending on some panel to tell ME whether I’M a designer.
Love it because ultimately it can protect this niche and overflowing field from under classified individuals.

As I mentioned in another post how about an industrial designers union? IDSA can only do so much.

  • setting guidelines for hourly pay
  • seeting guidelines for an “accredited designer”
  • negotiation guidelines for royalties, licensing, etc.
  • others: _______________

    AFTRA - American Federation of Television and Radio Artists
    SAG - Screen Actors Guild

what incentive would there be for clients to use union labor?

yeah, I’m not all about us unionizing. Licensing might be a better option, what we do is similar to an architect or an engineer, so maybe start with a similar career path

Creating a union is just a thought because it is obvious that the same gripes that we had in the '80s have not been addressed in any material way.

Having a “union” is more to protect the design talent that’s much exploited, less appreciated and even commoditized in places like China.

Anyone using a union designer would know that that designer has met certain industry standards that are upheld and respected in the design community. As someone has mentioned industrial design profession is NOT a licensed profession; thus garners relatively less respect than say architects.

Again, it’s just a passing thought.

I would personally never join a union.

Licensed seems the better path.

unions, yuck. they are for workers who cant hold their own.

licensing likewise would be a waste of time. to make it work, the bar is always set so low. just look at architects for example. you can have a licensed architect do a crap condo/cookie cutter townhouse, and in fact they are the most common type of projects.

the fact remains, that license or not, there is a spectrum of talent out there. economic rules of supply and demand, IMHO remain the best determinant of value. if you suck, you wont get hired or will bill so low, only those who arent looking for good design will be your clients. excellence is rewarded by economic forces.

call me capitalistic, but i really do believe in a free market economy and the cream will rise to the top. unions and the like are only for the benefit on those on the bottom.


rkuchinsky has got it right

“what would Roark do?”