Here’s Why It’s Good For a Consultant to Tell the Employees How Much He Makes

I swear I had decided to write this before reading Pam Slim’s latest post about earning more by working less. But her thoughts dovetail so perfectly with mine.

Recently, the hiring manager at a client company reluctantly agreed to my rate. But he asked me please not to say anything to the other people on the team, because there are some working for a third that. It’s a great feeling, by the way, if it’s never happened to you. (A third? You couldn’t get me to sneeze for that much.) I had no objection to keeping my rate secret, since it is standard procedure. But that got me to thinking.

One of the biggest problems I encounter is that once I’m working for a client, people on the team throw tons of work my way. They figure, I’m there; why not get me to help them. You might not think this is a problem. I mean, when I don’t know where my next paycheck is coming, you’d think I’d be happy for any hours I can get.

But that’s just the problem. Pam has it exactly right:

We easily fall prey to the outdated notion that more work = more money. In reality, doing the right things will lead us to more money, more free time and more satisfaction, if that is what we desire. A lot of the work activities we spend our time doing are either:

  • Unnecessary
  • Low value
  • Low priority
  • “Delegate-able” as in someone else could do them better, cheaper and faster

Remember, 80% of the results you achieve come from 20% of the work you do. What if you could do only that 20%, but do it 5 times over? You’d achieve 80% * 5 = 400% of what you do now. Or better yet, you could work half as much… and still accomplish twice as much. Doing more work is not the way to financial independence. Doing less work is the way… as long as you cut out the right 80%. That’s the trick.

Now, there are people who could help me cut out the right 80%. Unfortunately, they’re the same people who keep throwing me work willy-nilly. Because they think of my time as a commodity. And the most dangerous thing for a consultant is to be commoditized. Being commoditized means the specialized knowledge and skills that I have are no longer so special. And that’s dangerous, because it means they’re no longer so valuable.

Perry Marshall told a story about a high-tech start-up he was involved in. Now, if you know Perry Marshall, you know that he knows Internet marketing inside and out. In fact, he was brought onto the board of this start-up specifically because of his marketing expertise. He’s also Mister Google AdWords, author of The Definitive Guide to Google AdWords and The Ultimate Guide to Google AdWords. If you do a Google search for “Google AdWords,” his site is the top commercial site in the list (after Google’s own site).

Anyhow, he told this story in an interview with Glenn Livingston. Perry was on the board of directors of this start-up. And he told them about a cutting-edge, on-line survey methodology they could use that reduces risk, costs relatively little, and would help presell their product even before they have an actual product to sell. But they said, no, they wanted to hold off and start marketing in six months, after product development is complete. And Perry said, no, we have to do this; we have to use Glenn Livingston’s survey method. Otherwise, we’ll be throwing valuable time down the drain when we could be contacting all these people and finding out what they want and which ones are likely to buy and so forth.

The company president finally agreed that this was a good idea. But when Perry contacted him again, he had changed his mind. In Perry’s words:

I get this email that says, “Well, we decided against this, because well, I don’t have time to explain right now.” Well, I was too busy to try and go fight him. So I just let it ride. Well, whatever. I thought, obviously, I am not charging these people enough money, because they are not listening to me.


To finish the story, Perry did have it out with them at the next directors’ meeting. And he answered every one of their objections. And they finally agreed that the marketing expert they were so lucky to have, whom they could never afford at his usual rate, that he was right about the marketing strategy. Duh.

Yeah, I’ve been there, too. Unfortunately, years of expertise does not buy you respect. Not respect for your knowledge, nor for your skills, nor for your time. Commoditization.

But what if they knew I was being paid three times as much as they were? Would they ask me to do something they could do just as well themselves? No! They would ask me only to do those things that I could do at least 3 times as well as they could.

Or what if I were paid 10 times as much? They’d only hire me to do what I could do 10 times as well as they could do themselves. Yes, it would be more difficult for me to find work. But I would only need to do half the work in order to make 5 times as much money. And I’d be doing only what I did best and what I enjoyed the most.

You may think this is unrealistic and frought with problems. But from what I’ve heard–and what I’m learning first-hand… There’s only one hard part in all this. And it’s not the expertise part. Is there anything I can do ten times as well as the average corporate drone? Yes. Lots of things. The expertise I already have. The hard part is not the expertise. The hard part is quoting a price of $300 an hour, or $400 an hour, or $500 an hour… and keeping a straight face.