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Mar 14

No. 68: What should I consider before I consult on the side?

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What should I consider before I consult on the side?

Note: To obtain possibly diverse views, the questions above were presented to several senior PIs/consultants. The comments that follow are an edited synthesis of their opinions.

Reader question: Because my basic research bears on their product development, a corporate lab has asked me to accept roughly four hours per week as a “consultation” for 10 weeks. I could make time in my schedule for this, but I have no idea what to charge them. What is a typical hourly “consultation fee” for a pretty good PI — although I’m not a department chair or Nobel Prize winner? Can I keep the money, or do I have to give it to my department or the university? One last point: they are located about one hour’s drive from my campus. Do I charge for the two-hour round-trip drive at my per-hour rate, or do consulting scientists “throw in” travel at no additional charge?

Expert comments: PIs often cross over between teaching and consulting, and they may charge on a per-project basis.

One such researcher estimates that the resulting fee generally falls between $100 and $200 per hour, with some compensation for travel time above and beyond expenses. Another with significant consulting experience explains that you should expect $150-$300 per hour.

In addition, you generally should charge travel time at half the rate — $75-$150 per hour — plus all travel-related expenses, such as airfare, mileage and hotels. If you need to be away for several days as part of your consulting duties, most charge the base rate ($150-$300 per hour) for a standard, eight-hour day. That is, you shouldn’t bill all the time you are away as travel time.

Examples: If you have a four-hour round-trip drive for a three-hour meeting, he would charge four hours at half rate and three hours at the full rate. If you have a three-day trip, you would charge the half rate for the direct travel time and each individual day away at the full rate for eight hours.

As far as, “Can you keep the money?” That depends on the specifics of your institutional policies. If you work outside your normal business hours and not using university resources or intellectual property, then you probably will be able to keep your fees. But check with your institution — not only for policies, but also to fulfill disclosure requirements as well as to determine if there are any significant conflicts of interest.

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Comments (3)
Elite campus
written by Consulting prof, March 07, 2011
You can earn a tidy sum if you do it right and honorably. Two suggestions: First, consult your faculty handbook for limitations on outside work. Second, be sure you have an accountant or CPA help with your taxes; there are many aspects that could get complex, plus deductions you may not be aware you can take.
written by Dr. Barbara, March 07, 2011
Here's what I did when a company asked what I charged to consult. Knowing nothing, I just said "The Customary". So they told me their usual allotment was $250 per hour, and would that be OK? I said "Fine". and that was that.
written by David E. Harrison, March 14, 2011
The final sentence of the advice is vital. Check with your department head and get written approval to do the consulting. There may be a problem with secrecy.

Before consulting, you almost surely will have to sign a promise that you will not share any information you learn from the company. Fair enough, but since you are an expert, you will know a lot of that information anyway, and things might get sticky if they think you are using ideas from them, when in fact you had already thought of such ideas. Make clear that your expertise belongs to you, but details about their product and what you tell them about their specific product belong to them. Be sure such points are dealt with in the open and in writing.

Basic researchers are usually eager to share our data and ideas. Industry does not work that way. They get very concerned about keeping their ideas and what they get from you secret.

I have heard of consulting fees up to $1000 per hr for solid basic scientists, however personally I never got more than $500, and often less. I did not charge travel time, just time that I was working, usually an 8-10 hour day. Obviously costs and what is charged should be agreed on in writing before doing any consulting. In one case, they took me to a nice dinner and continued to pump me for ideas - OK, no problem, made them feel good.

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