The Top Four Questions About PR Billing Practices

The way public relations firms bill for their services seems a mystery to many clients. Since mysteries in billing are neither good nor necessary, I’m going to answer questions we frequently get from clients about this. There are some variations in billing methods by different PR companies, but the basic principals are the same. Varying too much from these general billing rules is unwise for any PR company that wants to stay in business.     

1. How do you charge for your services?

We charge based on the length of time it takes to do the work, and the level of difficulty of our services.  I assign an hourly billing rate to each staff member at Bridge Global Strategies. The rates are based on the salary and amount of experience of each individual.

2. What are your hourly billing rates and how do you come up with them?

Our hourly rates range from $120/hour to $350/hour. We do not charge clients for the time spent by interns. (This is not at all universal, since many firms do charge for intern time. In addition, we pay our interns, which is not widespread in the PR industry.).  We take into consideration the tasks that are being performed and not just the usual hourly rate of the person performing them. For example, sometimes I do work that someone at a much lower level could do. We have a small staff, and if more hands-on work is necessary to meet a deadline, everyone pitches in. I don’t charge my usual hourly rate of $350/hour for lower-level work.

I learned from my management experience at other agencies how to calculate hourly rates so they will cover overhead, pay salaries and leave some profit after our expenses are paid. Not every hour spent by our staff is billable to a client. We have to allocate time for administrative tasks, training, holidays and vacations, etc. All of this non-billable time has to be calculated into our billing rates along with our rent, equipment and other costs that are not billed directly to clients. We are able to charge lower rates than larger PR companies because we don’t support the kind of overhead they do. Bigger agencies have layers of non-revenue-producing staff that we don’t. Public companies have to set aside revenues to pay shareholder dividends.

3.  These rates sound like law firm rates! Why are they so high? We could do it ourselves for a lot less.

We hear this sometimes from people who have never worked with a PR firm before. Our rates are not high. Larger agencies in the northeast of the U.S. charge considerably more for people at every level. (And law firms charge $600 or $700/hour and up for partners’ time and a couple hundred dollars an hour for newly minted lawyers.) As for doing PR internally, my blog post about the hidden costs of in-house PR shows that it’s a lot more expensive than most people realize.

4. Do you charge a monthly fee? Is it a flat fee? How do you come up with it?

We charge a minimum fee every month that includes a certain number of our hours. It is not a flat fee. If the amount of work ends up taking more time than is covered by our monthly minimum fee, we charge for the extra time.

Before we start working with each client, we develop an estimate of how many hours it will take to do the work to accomplish our goals for the client, and we base our monthly minimum fee on that estimate. However, sometimes our work has to be adjusted for changes in the environment or changes in our client’s plans. We ask a client before we go over the budgeted amount of time whether they would like us to or not, since there is extra fee involved. We can’t work without being paid, and have to charge for the time we spend.

I will follow up on this post with a second one on billing that will cover several additional FAQs, such as:

  • If you spend less time than you estimated for your monthly minimum fee, do you refund the minimum fee that wasn’t used?
  • Do we have to sign a contract for a year, or can we make an agreement for less than that? Do you work on a project basis?
  • What about expenses? Do you pass them along at cost?
  • When do you bill us and what are your payment terms?

I hope this explanation of our fee billing is helpful. It’s important to be transparent about how fees are calculated. I don’t want to accept any engagements that are going to be financially upsetting for either the client or to us! If you have additional questions about how PR services are billed, please comment here or send me an email and I will be happy to answer them.

Lucy Siegel

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