Charging consulting fees for SOP development and guidance

[mscottf]

I am a former Quality Manager, presently out of work and was considering retirement. Now the former VP at my last company is recruiting me as an independent contractor to help him create a QMS and develop SOPs for a European company developing a medical device very similar to what we were working on at my last employer (now closed).

All the work is remote from home (at least in the short term). They are hoping to have these done in phases, starting with Document Control, Quality Manual, Risk Management, Design Control and Design V&V in the first 2-3 months and then a full complement within 2019.

I have never done this on a contract basis before and am unsure how much to charge per hour or per SOP, how many hours to budget per SOP or how long to estimate each SOP will take. Everyone speaks English, so that should not be a complicating factor. It's a small group of people (10-15 for now) with one major point of contact. Video conferencing, e-mail and WhatsApp are all available communication tools for collaborations.

I have a suite of applicable SOPs, instructions, forms and other documents in editable Word/Visio/Excel formats from my last company to use as templates. I plan to use process maps, SIPOC diagrams and turtle charts extensively.

Can anyone provide me guidance for an hourly rate and average estimates for time to develop SOPs? Thank you.

 

[AndyN]

The most you might anticipate is maybe $60/hr

 

[Marc]

Medical devices is a hot field these days. A young friend in the field charges $175/hr. He also does most of his work from home.

 

[Ronen E]

Pay can vary vastly. It depends on so many factors, the least amongst not being one's sales skills...
I think that there are no golden numbers.

 

[mscottf]

Hello and thank you for the feedback so far. That's quite a range of hourly pay just from the first two respondents.

Can anyone provide guidance on time to take one companies' SOPs and convert them to a new company in a similar business, average per SOP? I know this is could vary widely but I don't want to limit myself in a presentation nor do I want to to price myself out by estimating too high.

 

[Marcelo]

Can anyone provide guidance on time to take one companies' SOPs and convert them to a new company in a similar business, average per SOP? I know this is could vary widely but I don't want to limit myself in a presentation nor do I want to to price myself out by estimating too high.

This is very difficult to estimate, that's the reason why it's usually better to:

a) Charge an hourly rate that you are comfortable with and keep the hours open

b) If the client requires a fixed pricing, make a general guessing on hours required and multiply by hourly rate, I usually give a discount for fixed pricing

The real thing about consulting fees is that you really need to charge a fee that you think:

1 - Is what you want to get (usually you need to think the amount you want to earn monthly and divide those by the hours you want to work per month)​

2 - can be justified by the value (not amount) of work done​

3 - Is not totally out of bound with what other are getting (but this really depends on how you present/see yourself as compared to others).​

​

The real important one is 1, the others are mere general control.

Specifically, you mean "converting SOPs", but you will note that this is not usually what you do (unless you want to sell a crap service of changing names only and give the client a generic documentation that only serves to pass the first audit, if any). Also, you sell a service of "converting SOPs" only, why would people pay a lot for that? Anyone can change names and small parts. Of you probably should be selling is an implementation of a QMS, including the creation of SOPs and records specific for the new client (even if they are based on other SOPs, (which is common practice so as not to start from scratch), or something like that. Then estimate an amount of time for that in general (for example, I usually estimate that creating a system consisting of simple SOPs and some records take in general 15-20 hours, but this is in the case the client only wants that explicitly - because it will be a crap system. Even so, I always try to convince the client to do the right thing which usually includes:

- Create quality policy (based on mission/vision/values​

- Identify quality objectives at the enterprise level derived from the quality policy​

- Identify all requirements of the system (including regulatory requirements to each applicable target country and related role)​

- identify all required explicit documentation from each applicable regulatory requirements​

- Define system high level processes​

- Identify all sub-level processes​

- Create quality plans for all process identifying all specific requirements for each processes, including things like objective, human and physical resources, need for documents and records, etc, see for example, ISO 10005)​

- Create task analysis for all processes to identify tasks​

- Create SOPs, record and other documentation​

​

If you do it this way, it will take a lot more than 20 hours. Usually more than 100.

(also, I just showed some of the steps for creating a QMS, for a more detailed discussion, see ISO 9004 - Quality management — Quality of an organization — Guidance to achieve sustained success).

 

[optomist1]

Medical devices is a hot field these days. A young friend in the field charges $175/hr. He also does most of his work from home.

Amen to that Mark, if the "current Cove traffic", is any indication, it is very robust...re: rate I would tend to agree with your figure...at least based upon my interactions. Cheers-

 

[Marc]

@optomist1 - I do not have a way to associate traffic here (which is actually very low compared to the pre-2012 and earlier period) with "what's hot". It is general knowledge that medical devices is a field that is gowing fast and in which there is a lack of qualified people in it (thus typically good pay rates) vs. demand.

From my consulting days (not in medical devices) pay rate was also very broad. @Marcelo Antunes 's post above is an excellent explaination why. When I was consulting, I charged very different rates depending on what any given client specificlly wanted done as well as the size and complexity of the company. For example, I charged much less for small businesses. I never did have a single set rate.

My approach was to offer to visit the company, for free, to evaluate their needs. After that I would return home, do a writeup and made a "project plan" (back then I used Microsoft Project) which I submitted to the company. Some hired me for their project, and some I never heard from again.

I cited one person I know who is mostly into statistical analysis of data - He doesn't create QMS's or write SOPs. I can't say that I personally know anyone else in the medical device field other than some people here who I can not say I personally know. Part of my perception with regard to rate is from the number of people/companies which contact me who incorrectly think I work(ed) in the medical device field. I assume that impression is from my having worked in hospitals for many years (from the late 1960's through the early 1980's) which is on my resume.

There is also the aspect of reputation. The 1990's was a very prosperous time for me because of my reputation in DoD electronics and automotive - Both high reliability high risk environments. I never looked for business - I was known so people/companies contacted me, and I could charge more than the "going rate". I never advertised and did not actively seek clients.

Thus it is very hard to say what a person should set as a consulting rate. For me almost every job had a different rate. And like Marcelo mentioned, I typically proposed a fixed project fee rather than an hourly fee.

As a side note: In my active days, the internet was young so "work at home" wasn't as easy as it is these days.

 

[Ronen E]

@optomist1It is general knowledge that medical devices is a field that is gowing fast and in which there is a lack of qualified people in it (thus typically good pay rates) vs. demand.

(Emphasis added)

I beg to differ.

There's more to it.
If it was that simple, any qualified person in medical devices consulting, who is out there, would have at least been subject to a continuous stream of initial enquiries, not to mention having enhanced terms-negotiating power.

 

[Marc]

Could be a location factor. And I guess we differ in that by saying there is a lack of qualified people doesn't necessarily mean that every qualified consultant will have a steady stream of customers. For example, qualified network professionals (computer systems) are also hard to find vs. demand. Getting a job is easy if a person is open to relocation, but consulting is a different thing all together.

We have gotten far afield of the original poster's question, but I will add this:

Consulting is a difficult "occupation". I know this from my years of consulting only to find, in my case, work pretty much dried up for me back around 2001. Part of the reason was my fault - I didn't advertise and I didn't actively seek clients, and part of it was I didn't network. And I turned down a lot of jobs because I was burned out on travel. For me for many years I was on a flight somewhere on Sunday night and a return flight Friday night or Saturday morning. And a lot of the time I would be away for 2 to 3 weeks at a stretch.

I know a couple of people here who struck out on their own, so to speak, both of whom were/are highly qualified and both of whom ended up taking full time jobs again because of a lack of continuous work. I have never recommended working as a consultant to anyone. To any one who has asked me I have pointed out that in my world finding continuous work was difficult. Even when I was a consultant I did not have continuous work in consulting. There were times I did contract work through a contract firm like Aerotek, a company which pretty much always had work for me. For quite a few years the combination of consulting and contract work kept me busy pretty much continuously.

And, times are changing. I personally think it is harder for contract workers and consultants these days because fewer companies want to spend money on contract workers or consultants. Yet, now and again I also hear that companies are seeking more contract workers to lessen their exposure to liabilities such as, in the US, medical insurance and other benefits. Uber anyone?

As a last thought - I was going through some papers earlier today, cleaning out some old "junk". One of the things I came across was a paper I picked up probably around 2004. I had gone to a GM facility to talk to them about a consulting job. I had worked for the facility as a contractor some years earlier. I saw a paper in the HR department and picked it up and took it with me as a "my, times have changed" type of thing. When I did contract work for them some years earlier, direct hires were starting at something like $20/hr. + benefits like healthcare. Not too many years later, back at the same place I had worked they were offering $8/hr. for new hires with raises over 3 years to $10/hr. In the US (I can't speak to other countries) wages were (and to a large degree still are) declining significantly, as were/are benefits such as healthcaare coverage. As an aside: GM to cut jobs, bonuses, and dividend

To anyone considering consulting - Even in specialty fields in which there is a lack of qualified people, consulting is a difficult proposition. The old saying "Don't quit your day job" applies.

I could go on about this but it's so open and different scenarios come into play. We even had a conversation here not so long ago in which a place in Tennessee was having problems finding workers. The conversation came down to pay - The company paid less than the local McDonalds and other fast food "restaurants". Yet, the company claimed it couldn't be profitable if they paid more. It was a "no way to win" scenario.