An American Editor

August 19, 2013

Business of Editing: What to Charge (Part V)

The previous four parts of this series (I, II, III, and IV) discussed the effective hourly rate, how to calculate it, and how track it. The remaining question, as several colleagues have noted to me, is: “Why bother?”

Professional editing is a business. If it were a hobby, it would not matter whether or not we made a profit because we would be pursuing editing purely for our love of editing. Yet, for most of us, editing is a business, and as a business we need to be concerned with profit and loss. Even businesses that are organized as nonprofits need to be concerned with profit and loss. The difference between a for-profit and a nonprofit business arrangement is that the former distributes any profit to its “owners” whereas the latter uses any profit to further its goals (i.e., there is no distribution to owners because there are no “owners”).

A business cannot make a profit if it does not generate income in excess of its costs of doing business. It’s a simple concept but one that seems to be just outside the grasp of many business owners.

Knowing whether we are making a profit or suffering a loss is important to editors because we, just like all other businesses, need to constantly evaluate whether what we are doing is worth continuing to do. If we are not making a profit and if we cannot adjust what we are doing so that we do make a profit, perhaps we need to pursue a different career path or conduct our business differently.

Tracking one’s effective hourly rate (EHR) is a way to determine the health of one’s business. It is also an alert system to tell us if and when we need to make adjustments in how we operate our business.

If we know, for example, that no matter what we do, our current client base will not pay a rate higher than $20 an hour (or its equivalent), and if we know that our EHR, as we are currently operating, needs to be higher than what our client base is willing to pay (the required EHR), then we know that we need to make adjustments in how we conduct our business.

This is the critical and most important reason to know and track the EHR. When we operate without knowledge of our EHR, we assume that if we bring in $1,000, it represents mostly profit. This is the allure of the hourly rate: an hourly rate makes us believe that we are earning a decent income because we are assured that for every hour we work, we earn that hourly rate. In real-world business, however, it is not so simple.

Editors, like all businesses, have a production line. I know we do not like to think in those terms, but the fact is that we do operate a production line. (A “production line” is not synonymous with “assembly line.” Production line refers to the manner and order in which we do our work.) We receive a manuscript and we take certain steps in dealing with the manuscript, steps that we repeat with each project. For example, the first thing we may do is clean up the file to remove extraneous elements like extra spaces. Then we may break out reference lists from the main text, or put figure legends in a separate file, or insert bookmarks, or whatever. Ultimately we get to the editing phase, but it is rarely the very first thing we do.

As part of our production line we may do multiple passes. We may do a rough edit, then a second edit, then a cleanup, then a final pass to search for anything we may have missed. What exactly each of us does is not as important as that we recognize we have these steps and that we can articulate them. The articulation is important because part of what we need to do if we are not making a profit is determine what steps in the production line can be omitted or modified so as to make the step more efficient.

One publisher, for example, looks for the least-expensive editor who meets certain minimal qualifications and then provides a multipage checklist of things it expects the editor to do. There are several interesting aspects to the list, one of which is the blurring of the roles of the developmental editor and the copyeditor. The publisher expects copyeditors to fulfill both functions for one very low price. In addition, the publisher has its own style. which differs from standard styles in small, subtle ways. However, failure to comply with the publisher’s house style results in requests for the editor to repeatedly go over the manuscript to fix it for no additional fee.

Faced with not earning the EHR, an editor has to determine what changes can and must be made in the editor’s production line in order to earn the EHR. Will, for example, eliminating a second or third pass over the manuscript reduce the hours sufficiently to raise the EHR? Will changing the production line to a single-pass process do the trick? What other adjustments can be made that will result in increasing the EHR? Or does the editor need to drop this particular client? Can the editor afford to drop this client (i.e., how easily can the revenue this client generates be replaced)?

The reason to bother with calculating and tracking the EHR is to create a foundation for making business decisions. Bringing in revenue of $50,000 a year is nice, but meaningless, if we do not know what our cost of doing business is or whether the procedures we follow are hampering, increasing, or having no effect on our profitability — or even how many hours we need to work to make that income. It is also meaningless if we do not know whether doing work for a particular client is profitable. If working for a particular publisher is not and cannot be profitable, should we not know this so we can decide whether or not to drop the publisher and find other clients?

Perhaps even more importantly, bothering with the EHR lets an editor determine how well the editor is doing over time. Is the editor’s speed and efficiency and productivity increasing or decreasing or remaining stable — month to month, year to year?

The EHR also spreads the earning requirements over the full work week, thus accounting for the nonbillable time we need to devote to business, such as for marketing. It also is (usually) a rate we can more realistically expect clients to accept. More importantly, unlike an hourly rate, the EHR forces us to think in terms of a business week and not just in terms of billable hours. Too many small business owners think that the only hours that are part of the business calculation are the billable hours, which is incorrect.

Finally, the EHR, unlike an hourly rate, lets us fully measure productivity and efficiency. The more productive and efficient we are, the more often we exceed our EHR. When we charge by the hour, we can never exceed that hourly rate.

The EHR is foundational information that acts as a guide to business decision making. It is something against which a business can measure what the business is doing and determine whether the business is on the correct path or needs to alter its course — making calculating the EHR worthwhile.

Links to the other articles in this series:

August 14, 2013

Business of Editing: What to Charge (IV)

Originally, part IV was scheduled to be the last part of this series, and was to tackle the question, “Why bother?” However, what was part IV is now part V. The change was made because I have received several requests for clarification on how to determine what to charge. The confusion seems to stem from two things:

  1. The effective hourly rate (EHR) discussed in parts I, II, and III, is based on a 40-hour work week. The calculated EHR is what is needed to be earned each hour of that 40-hour work week. This does not mean that you must have 40 billable hours, just that this is the EHR that each hour has to earn even if the earning has to be compressed into 20 billable hours.
  2. I did not take the calculation to the final step, which is determining the actual hourly rate. I assumed that readers would be able to make that final step themselves. I have been using the EHR for so many years that what to do seems obvious to me, but in reality, it is not so obvious — as readers have pointed out — and so that is the topic of this post: How do you calculate the actual hourly charge?

For purposes of this example, let’s change the dynamic a bit. Although we’ll retain the $30 per hour charge, the 20 billable hours per week, and the 40-hour work week for purposes of calculating our current net EHR, let’s make our expense number a more realistic $4.60 per hour (based on these monthly expenses allocated to the business: rent/mortgage = $500; heat, water, and electric = $200; telephone = $40; and maintenance = $50). This changes our net EHR to $10.40 ($15 gross EHR − $4.60 expenses) based on a 40-hour work week.

(If your work week is only 30 hours, the method of calculation is the same but the numbers change. For a 30-hour work week, your gross EHR would be $20 and the same expenses would equal $6.13 per hour, giving a net EHR of $13.87. The figures change because the number of hours over which the EHR has to be earned has changed. You need to calculate the EHR using your work week, expenses, and hourly charge.)

Although some readers think we only need to pay attention to billable hours, that is not true. It is true that in a 40-hour work week we do not bill for 40 hours; we do have administrative matters and marketing, for example, that need to be addressed for which we cannot directly bill a client. But these are no different from the rent. They need to be paid for and every business calculates what it needs to charge customers by including time spent on nonbillable matters. The same is true for sick days and vacation time. These items are part of the expense of doing business; we just cannot give them precise numbers like we can give rent.

Consequently, the hourly charge that we determine accounts for the facts that we have only so many billable hours in a week and we also have hours in the week that we have to devote to nonbillable matters.

If we were to use the net EHR we calculated ($10.40), your average weekly earnings, after expenses, would be $416 or a yearly income after expenses of $21,632. But our goal is for that yearly income to be $50,000.

Here are the steps we need to take to obtain the EHR data and calculate how much we need to charge to reach our goal of $50,000 after expenses:

  1. Calculate the EHR for $50,000:
    $50,000 ÷ 52 weeks = $961.54 per week
    $961.54 ÷ 40 hours = $24.04 EHR
  2. Add the expenses to the EHR because the EHR currently only represents our net income (after expenses) goal
    $24.04 EHR + $4.60 expenses per hour = $28.64 EHR
    (or an average gross weekly income of $1,145.60 which translates to gross yearly earnings of $59,571.20)
  3. Calculate the number of billable hours in a year:
    20 billable hours per week × 52 weeks = 1,040 per year
  4. To determine the hourly rate you have to charge, divide the gross annual income by the number of billable hours:
    $59,571.20 ÷ 1,040 billable hours = $57.28 per hour

Now you know what you have to bill per hour to have a net annual income of $50,000 while having only 20 billable hours a week.

Your question is: This number can be calculated without calculating the EHR, so why go through the trouble of calculating the EHR? Why not go to the heart of the matter directly?

The answer is that few of us can directly charge the hourly rate we need to earn. How many of your clients would knowingly pay you $60 an hour for copyediting? Most of us have difficulty transparently charging and collecting that amount, especially if we work for publishers. That is why we began this series with the hourly charge of $30.

We need to calculate the net EHR to see what we are really earning under our current charging scheme. Most of us see that this week we brought in $600 and the week before we brought in $900 and last year we had a gross income of $41,628. And we also see that when it came time to pay the rent, we paid it, even if we struggled to do so — the same being true of our other bills. But few of us really know what we are really earning, and in the absence of knowing that, we have no foundation on which to evaluate the manner in which we run our business.

The hourly charge figure tells us that if we want to continue our current way of doing business, we need to double our hourly charge (from $30 to $60). In other words, our current business methods are not sustainable at the level of our economic goal.

The $28.64 EHR, which is based on your economic goal, tells you what hourly rate you need to average over the 40-hour work week in order to meet your economic goal. This number is important because it is often a more achievable number. It is also an argument for abandoning the hourly rate method for the per-page or project-fee method of billing, because, unlike the hourly method, these methods reward you for productivity and efficiency.

The result is that with these three numbers in hand, you are in a position to evaluate your current business and can align your goals with your decision regarding what and how to charge. For example, if you know you need to charge $60 an hour for 20 billable hours to meet your goal, you can either find clients willing to pay that rate, increase the number of billable hours in your work week, or lower your economic goal. If you increase your billable hours from 20 to 30, the hourly charge drops by approximately one-third, from $57.28 to $38.19 (or from $60 to $40). (Note: The EHR does not change. The EHR changes only if the work week total hours change and/or the economic goal changes.)

In my experience, it has been impossible to charge the hourly rate I would need to meet my economic goals. On the other hand, by analyzing my work habits, increasing my productivity and efficiency, and using a per-page/project-fee method of charging, I have been able to meet, and almost always exceed, my required EHR. There are weeks when I do not meet the EHR over the course of the work week hours, but those weeks are made up for by the weeks that I exceed my EHR.

The EHR also serves as the standard against which I judge my business. I evaluate clients and projects based on the EHR. Clients whose projects regularly do not meet or exceed my EHR become ex-clients, because I know they cannot be made profitable.

I am not in business to lose money or not meet my goals, which is why I rely on the EHR and review it constantly. Are you in business to lose money? Under your current setup, how do you know whether you are making or losing money, and if you are making money, how much you are really making?

Next is part V, which tackles the question: “Why bother?”

Links to the other articles in this series:

August 12, 2013

Business of Editing: What to Charge (Part III)

In parts I and II of Business of Editing: What to Charge, we discussed the effective hourly rate (EHR), how to calculate a true EHR, why it is important to have a definition of what constitutes a manuscript page, and why I think it is smarter to charge by the page or project rather than by the hour. But knowing your required EHR is not enough; you need to track it as well.

I use two programs to track my EHR: Timeless Time & Expense (TT&E) and Microsoft Excel. In the case of TT&E, I am using an older version because it does all that I need. TT&E is not freeware and it is a bit pricey if all you want is to track time, but I like that it makes it easy to track multiple projects. In any event, what you need is a good timing program that will track how much time you spend on a project and give you a total time.

Excel is a program that most of you are familiar with. However, as with TT&E, it is not necessary to use Excel; any quality spreadsheet program will do.

Tracking time is key. I round total time up to the nearest quarter hour. For example, if the total time I spent on a project is 25 hours and 1 minute (25:01), I enter that as 25.25 hours. I know that somewhere along the line I missed timing a few minutes of work, so this is a way to compensate.

Another thing I do is track the time based on billing cycles. If a project is to be billed only upon completion, then I track the time until the project is complete and being billed and use the single total time. If the project is being billed in batches, then I track the time for each batch and enter the time in Excel batch by batch.

As you can see from the following image, I use a simple form to track important data.

In the sample, I have given a spread of per-page price ranges. The key, of course, is to maximize price and minimize hours. (I know that some of you will point out the high pages-edited-per-hour rate that this illustration uses. The pages and hours shown are taken from a real project. Remember, however, that this is an illustration and your figures will differ.)

What is important is that even at the lowest per-page price of $2 per page, the EHR exceeded the required EHR of $25 (based on editing 16 pages an hour; at a rate of 13 pages per hour, the EHR would still be exceeded but at 12 pages an hour, it would not be met. However, at $2.50 per page, where the illustration has a 19 pages-edited-per-hour rate, even at a rate of 12 pages per hour the EHR would be exceeded). This illustrates that it is possible to have a low rate and still meet and exceed the required EHR if you are efficient and productive. Do not, however, take this as an argument for a low per-page rate, nor an indication that you will always exceed the required EHR, nor an indication that one can always edit at such a high pages-per-hour rate — this is just an illustration of how to calculate and track the EHR.

If the per-page rate had been $2 for the whole project, the EHR would have been $38.45 based on the numbers. However, to achieve that EHR, the editor would have had to average, as indicated in the image, 19.23 pages an hour. Depending on the project and the parameters of the project, that may be doable.

But we stray off course.

The key to determining what to charge is determining your required EHR. But to determine that EHR, you have to have accumulated data. In the beginning, you guess, but as data accumulates, you can be more precise in your calculation. The important data are the EHR for each batch of submitted manuscript, as well as for the entire project, and your average number of pages edited per hour (shown in the image at the bottom far right).

Unfortunately, the image doesn’t show the column labels. Column A is the Date; B is Batch #; C is Number of Pages; D is Per-page Rate; E is Number of Hours; F is EHR; G is Charge; H is Total; and K is the Average Pages/Hour. You need the column information for the following Excel formulas to make sense.

Although the information is important, columns A and B are not needed to calculate any of the other data in the table.

The formula to calculate the EHR of column F is:

=IF(E11=0,””,(C11*D11)/E11)

where, for example, E11 represents the data in column E row 11. The “” is an instruction to leave the cell in column F blank if the data in E11 equals 0.

To calculate the Charge of column G, use the formula:

=SUM(C11*D11)

The Total column (H) needs two formulas. The first is only for the very first row of data, which in this example is row 11:

=SUM(G11)

The formula is that simple because in this instance, the Charge and the Total are identical. To calculate subsequent Totals by row, the formula is:

=SUM(G12+H11)

which means to add the new Charge found in this row (G12) to the Total in the row immediately above (H11) so that the Total in this row is a running total. Remember that the numbers (e.g., 12 in G12) represent the row number; the letter represents the column.

All of the data is row-centric; that is, the calculations are for the row only. The exception is the Total column, which is a running total.

The Profit/Loss Data row is where we get our overall information. The formulas for the various entries are as follows:

Total Pages: =SUM(C11:C22)
Total Hours: =SUM(E11:E22)
Ave Effect Hrly Rate: =IF(E24=0,””,G24/E24)
Total Billed: =SUM(G11:G22)
Project Gross Profit: =SUM(G24-D24)

Finally, the formula for the Ave Pg/H is:

=IF(E24=0,””,C24/E24)

Because I hire other editors to work on projects, I need the IC Fee and the Gross Profit percent (%) information. For those who never hire someone else, these items can be omitted. For those that do hire, you manually enter the amount of total fee paid to the other editor under the IC fee and use this formula to calculate what percentage of the total fee you retained:

=IF(G24=0,””,H24/G24)

Although not shown in the illustration, you can also track your EHR over the course of time by adding up the total hours from each project and the total billed for each project and dividing the grand total billed by the grand total hours.

With this data at hand, you can determine whether you are charging enough for your services. Adjustments can be made as needed. This information will tell you the state of health of your business. If you see that you are not making your required EHR, you need to analyze why not. Are there things that you can do to improve your efficiency and productivity? Or is the only solution to raise your prices and find new clients?

Part IV adds some clarification and Part V concludes the series, tackling the question: Why bother?

Links to the other articles in this series:

August 7, 2013

Business of Editing: What to Charge (Part II)

In Business of Editing: What to Charge (Part I), we ended with this question: Is the $30/hour rate you charge sufficient to generate your desired annual gross income based on your EHR? The answer is “no.”

Your current charge of $30/hour is not enough to generate the desired gross annual income of $50,000 because your net EHR is $13.56 (based on 20 billable hours in a 40-hour workweek), not the required minimum EHR of $24.04. Your EHR is $10.48 too little. Based on your EHR, your gross annual earnings will be approximately $28,200, or a little bit more than half of your desired annual gross income.

There are several options for curing this problem. First, increase the number of billable hours you work each week. At the hourly rate of $30, you need to generate at least enough work to bill for 34 hours every week for 52 weeks a year (or its equivalent). That will generate a net EHR of $24.06 ($30 × 34 hours = $1020 ÷ 40-hour workweek = $24.06). That is not impossible to do, but if you haven’t averaged at least 34 hours a week of billable-at-$30-an-hour-work over the course of a year in past years, you will have to devote some time, money, and effort to bring your workload to that level.

Second, you could lower the amount of your desired gross annual income. That would certainly change the calculation, but it would raise other questions, such as: Are you earning enough to meet your bills? Are you earning enough to warrant remaining a freelance editor? Is your annual income sufficient to support the lifestyle you want?

The third option is to raise your hourly rate to $51 an hour and continue to generate an average of 20 hours of work a week for 52 weeks, which would give you a net EHR of $24.06 and meet your income goals.

The fourth — and best — option is to calculate the net EHR you need to meet, which is, in this case, $25 (it really is $24.06, but rounded numbers are easier to deal with and so we round up). Then, instead of trying to charge and collect an hourly rate of $50, charge a per-page or project fee and work to increase your efficiency so that you can generate your necessary EHR. It is more likely that clients will accept a per-page or project fee than an hourly fee that they view as too high or outside their budget.

Also very important to consider when deciding whether to charge by the hour or the page/project is this: If you charge $3 per manuscript page, you need to edit a little more than 8 pages an hour to meet the $25 EHR. If you can edit 10 pages an hour, your EHR will equal $30, which is $5 more than needed. As time passes and that extra $5 adds up, you build a cushion for those times when you have no work, a cushion that may still allow you to maintain the EHR of $25 over the course of the year.

And don’t forget this: The $25 EHR is based on your generating enough work to bill for 20 hours a week on average. Thus, to meet your goal, you need to copyedit approximately 167 pages a week. (A cautionary note: Remember that all of these example calculations are based on our net EHR but that our net EHR is incomplete. You must do your own calculations based on your own business.)

Option 4 is, in my thinking, the best option because, as many freelancers have noted, publishers generally do not offer rates above $25 an hour, and authors aren’t knocking down doors in a scramble to pay editors $50 an hour. Most publishers offer a rate between $18 and $25 an hour; some publishers, to their discredit, I think, offer rates of $12 or less an hour. In addition, we are competing worldwide with editors who do not calculate their EHR needs and will accept work at any price offered. Consequently, the best way to charge is a per-page or project-fee rate because you can compete effectively yet increase your productivity and efficiency and thus raise your EHR to a sum much higher than the offered hourly rates — in other words, by becoming more efficient and speedy, you can make a $20 hourly rate (when converted from a per-page rate) an EHR of $50.

Which brings us to the next matter: calculating a page. There are lots of ways to calculate a page. One of the most common formulas is 250 words = 1 page. But there are other formulas, such as counting characters. It really doesn’t matter what you decide equals one page; what does matter is that you have a definition, that you make it known to clients, and that you apply it before quoting a price.

Regardless of how you ultimately decide to charge — whether by the hour, the page, the word, or the project — it is important to be able to calculate the number of pages because for most people, the number of pages has meaning as a measure. In addition, editors think in terms of how many pages they can edit in an hour, not how many words they can edit in an hour.

In a recent online discussion, someone was looking for an editor to edit a 248,000-word manuscript that they said equaled 450 pages. Before bidding on such a project, you need to have a standard definition of what constitutes a page so that you can rationally determine what to bid. In this instance, the author calculated a page as 550 words, more than double the commonly used 250 words. Were I to bid on this project, I would bid as if the page count were 992 pages, not 450. One page equaling 550 words is not within my lexicon.

If I placed a bid based on the 992-page count, I would be prepared to explain what constitutes a page and how I calculated the manuscript’s true (for editing) size. This count is important to me because I have a pretty good idea of how many pages I can edit in an hour. That number is a range that covers badly written manuscripts through well-written manuscripts. Knowing the correct number of pages by my definition of what constitutes a page and knowing how many of those pages I can edit, on average, in an hour, lets me knowledgeably decide if I can undertake the project and how much I need to charge.

If the author insists that the correct page count is 450, my response would be that it doesn’t matter — this is my bid price for the manuscript as described, whether we call it 450 pages or 992 pages. What matters is that I have a definition for a page that I apply when calculating my fee.

This is important because I charge by the page, not by the hour. I have a high EHR that I want to meet and a key to knowing whether I can meet that EHR is knowing how many pages I can expect to edit in an hour. The more pages I can edit, the higher my EHR.

In contrast, if I charged by the hour, aside from the fact that my true EHR would be significantly lower than my hourly rate, it wouldn’t matter how many pages I could edit in an hour. I am being paid by time, not by productivity — and I will not be rewarded for being efficient or productive; in fact, I will be punished if I am efficient and productive because I will earn less (in gross) on the project. When I charge by the page (or by the project), I am rewarded when I am efficient and productive.

Every time I exceed my required EHR, I am given a bonus. In contrast, if I charge by the hour I can never exceed my required EHR (and usually cannot meet it), thus I can never receive a bonus.

I know the concept of EHR can be confusing, maybe even daunting, but combined with a firm definition of what constitutes one manuscript page, it is really the best way to determine what you should be charging.

In Business of Editing: What to Charge (Part III), we will discuss tracking the EHR.

Links to the other articles in this series:

August 5, 2013

Business of Editing: What to Charge (Part I)

One problem with editing as a profession is that it is easy to set one’s self up as an editor. The result is that every day brings new editors into competition with existing editors. And every day the question gets asked: “What should I charge?”

The first response to that question, at least in the United States, is to take a look at the EFA (Editorial Freelancers Association) list of editorial rates. It does no harm to look at the rate schedule, as long as you recognize the failings of the schedule and do not rely on it for setting your rates.

The EFA schedule of rates is based on surveys of EFA members. Consequently, the survey excludes data from the many thousands of nonmembers. More importantly, the portion of the membership that responds to the survey is just a small fraction of the EFA membership, which itself is but a miniscule fraction of the universe of editorial freelancers. There are other biases in the survey as well.

The EFA schedule is also problematic because it fails to define its terms. For example, what does “basic copyediting” include/exclude that distinguishes it from “heavy copyediting?” What justifies the range difference? Suppose the copyediting were “medium.” How does that differ from “heavy” or “basic?” (For a discussion of light, medium, and heavy and their real-world relationship to editing, see The Business of Editing: Light, Medium, or Heavy?)

Bottom line is that the EFA schedule of rates is a place to begin but not to stop. It should be reviewed then discarded.

A problem with the query about what to charge is that the asker believes in a false assumption — that there is a “going rate.” There really isn’t a going rate in editing. It is true that many publishers pay similar fees for work, but if you look at what work is required, you will see that there is a great variance among publishers. In the case of authors, there is no rate similarity that is author imposed. Authors deal with editors on a one-to-one basis, and negotiate rate one-to-one. Publishers, in contrast, deal with many editors simultaneously and thus have company-established pay guidelines that they impose.

Although there is no “going rate” per se, it could be argued that there is a de facto one because Publisher A will offer pretty much the same as Publisher B by way of compensation; only the amount of work demanded (i.e., services required for that pay) varies — and should be carefully looked at and incorporated into your determination of what to charge.

Ultimately, any “going rate” has little meaning in the absence of it meeting your needs, which is the crux of the issue of what to charge.

The most important factor in setting a rate is knowing what your effective hourly rate (EHR) has to be in order for you to make the income you need. We have discussed the EHR several times. The original discussion and explanation is found in Thinking About Money: What Freelancers Need to Understand. That article covered the surface of the EHR.

The EHR gives you a better picture of what you are really earning. For example, if you charge $30 an hour but are able to charge and receive payment for only 20 hours of a 40-hour workweek, your “gross” EHR is $15 not $30. You need to account for all of the hours in a workweek. The gross EHR isn’t a “true” EHR because it accounts only for hours, but it is better than blindly choosing a number that sounds good or matches the rate of some other editor whose circumstances and needs are likely to be different than yours.

The true EHR also accounts for expenses incurred by your business. For example, if you work from your home and pay $500 a month in utilities, you might attribute $250 a month to your freelance work. That works out to $57.70 a week (or $1.44/hour) in utilities expense that you “would not otherwise incur” if you were working outside the home and for someone else who supplied the utilities during the workweek. (Even if your utilities bill would not be lowered by your working outside the home, some portion of the utility cost is attributable to your working from home.)

Utilities are but one of the expenses that are attributable to your freelance business. Health insurance is another, especially if you had employer-paid health insurance before pursuing your freelance career. The point is that you need to identify all your freelance-related expenses and add them to the mix to determine what to charge.

Let’s pursue the example of a true EHR using an hourly rate of $30. If you charge $30/hour for copyediting (however you define copyediting) and have billable work for 20 hours, your gross EHR = $15 an hour, which is calculated this way:

$30 per hour × 20 billable hours in 1 week = $600
$600 ÷ 40 hours (standard workweek) = $15 EHR

Now that we know the gross EHR, we need to fine-tune it to determine the “true” EHR. Consequently, from the gross EHR subtract the cost of utilities, as follows:

$15 (gross EHR) − $1.44 (freelance portion of utilities per hour) = $13.56 (“true” EHR)

We are only using utilities as a cost here, but the deduction from the gross EHR would be the freelance portion of all expenses of maintaining your business, broken down into its hourly value, such as the appropriate portion of health insurance, other required insurance(s), telephone and Internet service, rent or mortgage, hardware and software, etc. In other words, the $13.56 in the example is still high.

Once you have figured out your EHR, you need to determine your target gross yearly income. In reality, you will pick a number that you would like to earn and see if it is feasible.

Let’s assume that your target gross income for a year is $50,000. That equates to a gross of weekly income of $961.54 (based on a 52-week year), which equates to a minimum EHR of $24.04 (based on a standard 40-hour workweek). Is the $30/hour rate you charge sufficient to generate your desired annual gross income based on your EHR?

The answer and more in Wednesday’s Business of Editing: What to Charge (Part II).

Links to the other articles in this series:

 

January 31, 2018

The Business of Editing: The Line in the Sand

Richard Adin, An American Editor

As I have gotten older, I have found that things in life have reversed, by which I mean that things that once irritated me no longer irritate me and things that didn’t irritate me now do irritate me. Yet there are a couple of things that irritated me when I began my editing career that continue to irritate me today, although today’s irritation level is more strident.

One example of a continuing irritation we have already discussed on An American Editor — the question that both inexperienced and experienced editors never seem to get tired of asking, even though they have been told hundreds, if not thousands, of times that there is no such thing: What is the going rate? (For that discussion, see A Continuing Frustration — The “Going Rate”.) Today’s irritant is the fast-schedule-but-low-pay project offer, which also has been previously discussed on AAE in, for example, Business of Editing: Schedules and Client Expectations, Business of Editing: Workdays & Schedules, and The Business of Editing: The Standard Editing Workday & Workweek.

What brings this back to the forefront is that this month I have already declined four offered projects that combined amounted to 11,000 manuscript pages (which, of course, raises another issue, what constitutes a manuscript page, a topic previously visited on AAE; see, e.g., The Business of Editing: A Page Is a Page — Or Is It? and The Business of Editing: How Many Pages an Hour Do You Edit?). I declined the projects because I am already under contract to edit two books by the end of April that combined run a bit more than 19,000 manuscript pages.

I would have declined the four offered projects even if I were twiddling my thumbs and staring at an empty work basket because the pay rates were abysmal and the schedules Orwellian.

Consider just one of the projects. The client’s estimate was that the number of manuscript pages was 2,500. Based on past experience with this client, I know that the true number of pages (by “true,” I mean as calculated using my formula, not their formula) would raise that number by at least 25% and more likely closer to 35%. The size is fine; in fact, it is my preferred project size — bigger is better — since I do not like to tackle small projects (less than 1,000 manuscript pages), even though I occasionally will (most of the projects I take on run 1,500+ manuscript pages and many run 7,500 to 15,000 manuscript pages).

The client’s schedule was Orwellian: two weeks to complete copyediting. The schedule was matched by the abysmal rate offered: $2.60 per manuscript page. And, according to the client, the manuscript required heavy editing, which in the client’s parlance meant none of the authors’ primary language was English. (The subject matter was medical.)

Unlike some editors who have imaginary lines that they draw and claim they will not (but always do) cross, my lines are like those of the Great Wall — in stone, permanent, immovable, and I will not cross them. I told the client that I was declining the project because the schedule was Orwellian and the pay abysmal. For me to take on the project, the shortest possible schedule would be based on editing 400 manuscript pages per week with the count done using my formula and a rate of $15 per page. The more reasonable the schedule, the lower my per-page rate would become until we hit my absolute minimum, which was still higher than their offered rate.

My two uncrossable lines are these:

  1. The schedule must be doable in the real world, not a fantasy world.
  2. The compensation rate must correlate with both the schedule and the expected editing difficulties (i.e., does the client rate this as a light, medium, or heavy edit and what do those terms mean in the client’s parlance).

I know how fast I can edit because for 34 years, I have mostly edited manuscripts from the same subject area and I have kept careful records. In addition, I have created tools, like my EditTools macros, and use tools created by others, like Jack Lyon’s Editor’s Toolkit Plus, that are specially designed to make my work more accurate, efficient, and speedy.

I know how much I need to charge for my editing work because I have calculated my required effective hourly rate (also discussed in prior AAE essays in detail; see the series Business of Editing: What to Charge) and I know how much I want to charge for my work so  I make a profit, not just break even. And I know how much of a premium I require to be willing to work longer hours than my standard workday and workweek (see The Business of Editing: The Standard Editing Workday & Workweek for a discussion of work time).

The point is that if I cross those lines I have drawn, I hurt myself. Why would I ever want to hurt myself? In the olden days, before I knew better and before anyone with experience set me on the correct path, I thought if I accepted a project that was on a tight schedule with low pay, it would get me an in at the company, get me more work, and give me a chance to show how good an editor I am, with the result being that the company would offer me better-paying projects to keep me as part of their editorial stable. It didn’t take long for me to learn that the only fool in that scenario was me.

Sure, I got more work offers, but never at a better rate nor on a better schedule. As one project manager told me, I had already demonstrated I could handle the schedule and was willing to work for the offered rate, so that is all I would ever get.

I drew my lines and I never cross them.

I know that some of you are shaking your head and saying that you can’t afford to do that. I did the same until I realized I was always behind and never moving ahead — I was enriching my “clients” at my expense. Once I took my stand, I found that I was getting better projects and better pay — not starting the next day, but starting in the not very distant future.

Successful editors are successful businesspersons, too. Successful businesspersons do not do things that benefit others at their expense. They draw lines that they do not ever cross. I have drawn mine; are you ready to draw yours?

January 22, 2018

The Business of Editing: Explaining the Price of Editing

Richard Adin, An American Editor

The hardest thing to do is to explain to a client why she should be willing to pay the price you are asking for the work she wants done. It is even harder to explain to a publisher/packager client why their offer is too low and why they should pay you more.

Ultimately, the reason for the difficulty is that we have no concrete way to demonstrate the value of quality editing. Based on conversations I’ve had with colleagues, I’m not convinced that most colleagues truly understand the value of their work.

Sure we all know that editing can improve a manuscript, and some clients not only know that but believe it. Too many colleagues and far too many clients (which includes potential clients), however, are of the mindset that only price matters because anybody who can spot the typo is a “great” editor.

There is at least a partial solution to the explanation problem, and it is something that every author and editor, regardless of where in the world they are from, is likely familiar with — Star Wars: A New Hope, the original Star Wars movie. The video that follows tells how this iconic story was headed for disaster but was saved by great editing, which resulted in a multibillion dollar empire:

(A special thanks to Nate Hoffelder of The Digital Reader for bringing this video to my attention.)

The video should be watched from beginning to end by editors and authors alike because it shows the value of high-quality editing. More importantly, it illustrates why making price more important than editing quality is putting the cart before the horse.

Carefully consider what the editor did to bring logical flow and interest to a story that was understood by the author but was garbled in the transformation from author’s imagination to movie. Exactly what occurred in the editing of Star Wars: A New Hope is what occurs when a well-qualified editor applies his skills to a manuscript.

Imagine if George Lucas had limited his editor search criteria to least-expensive editor, rather than setting his criteria to find the editor best-suited for the task and price demoted to a secondary consideration. The Star Wars franchise likely would never have been and Star Wars would have remained a fantasy in his imagination rather than a fantasy shared by millions across the globe.

Complicating the problem for editors is that every person who has identified a typo on a printed page thinks she is a skilled editor, thereby creating an endless supply of “editors” from which a client can choose. Compounding the oversupply problem is that few editors have any understanding of how to value their work and set a price. Too many editors charge too low a price for high-quality editing, largely because they either have no clue as to what they truly need to charge or what they should charge so that clients view editing as a desirable, needed, skilled service. The consequence is that the editing profession as a whole suffers from oversupply and underpayment.

Editors need to rethink how they approach their profession. They need to show clients that there is a measurable difference between an editor of low skills and and an editor of high skills and that high-skilled editors both deserve and require fees commensurate with their skill level. In addition, highly skilled editors need to refuse work from clients who refuse to recognize that they are highly skilled and thus worthy of higher pay. It strikes me as wholly unacceptable for a client to insist on paying an editor with decades of experience editing hundreds of manuscripts in the subject area the client seeks the same amount as the editor with a year or two of experience with little to no subject matter expertise or experience. It also strikes me as wrong for the experienced editor to grumble about the low pay yet accept the job.

I recognize that few editors are willing to turn away low-paying work, preferring some work to no work. In that case, however, the editor needs to adjust the level of editing quality to match the level of pay. An editor being paid a Yugo fee should not give Rolls Royce quality editing in return.

I encourage colleagues to prepare a “pitch” for the value of high-quality editing, including an explanation as to why smart clients will pay for that level of editing. The “pitch” could (perhaps should) include a video, similar to the Star Wars one above, that illustrates how high-quality editing can be the difference between disaster and hit, and include an explanation of not only how you can provide that high-quality editing but why you are worth the higher price you are asking. Creating a marketing pitch can be a key step on the path to better pay, better job offers, and better clients.

Do you have a pitch to share? Or a video that you use to explain the value of editing?

October 2, 2017

The Business of Editing: Do You Know Your Business’ Health?

Discussions in online forums are fascinating. Pick an editorial forum and you are bound to find that sometime in the forum’s recent history, at least one, and even more than one, editor has asked “What should I charge?” or “What’s the going rate?” Both persons new to editing and experienced editors ask that question.

There are a lot of things wrong with the answers that are usually given, and we have discussed any number of times how to calculate what you, individually, should charge for your services. Yet there is another aspect to why the answers are generally wrong and why the question should not be asked of colleagues — your business’ health.

Let us assume that you ask “What should I charge?” and that the consensus responses are $25/hour. That is the extent of the online exchange. No analysis of the response is made that goes beyond “This is what I charge” or “The XYZ survey says” or “This is what seems to be what most responders to such questions give.” It is the lack of analysis that will hurt your business the most.

When someone responds $25/hour, what do you know about the responder’s business? For example, do you know

  • how many hours of editing they do a year
  • how many clients they have
  • how many years of experience they have
  • what types of manuscripts they edit (e.g., fiction or nonfiction, romance or biography, academic or nonacademic, STEM or medical)
  • who their clients are (e.g., independent authors, bestselling novelists or barely selling novelists, doctoral students, well-known publishers, small presses, academic presses, packagers, law firms, pharmaceutical companies, journals, English-as-a-second-language authors)
  • among their client types, the percentages of each type
  • their annual gross income solely from editing for the past year; the past 5 years
  • whether editing is their full-time occupation
  • whether they have another, primary source of income so that the household is not dependent on their earnings or if they are the sole income source for their household
  • whether their editorial business is profitable year after year
  • what their local cost of living is in comparison to yours
  • what debts, if any, they have that would affect the amount they charge

The list can go on but you get the picture. You are taking advice for your business from someone whose circumstances you do not know.

General advice about how to calculate what you should charge doesn’t require in-depth knowledge of the person offering the advice — but advice on precisely what to charge does. It matters greatly whether the person offering the advice runs a business that loses money year after year or turns a large profit. It matters greatly whether they work 25 hours a week for 40 weeks a year or 35 hours a week for 50 weeks a year. And it matters greatly whether what they earn is supplemental income on which the household is not dependent for survival or their income is the only household income and its absence would jeopardize survival.

In other words, you need to know your business’ health and their business’ health.

A healthy business is one that is satisfactorily profitable. The profit may be $1 or $100,000 — the number that satisfies you is personal to you. But profitable it must be; it cannot be costing you money to be in business.

So we come back to the fundamentals of the required Effective Hourly Rate (rEHR) and the desired Effective Hourly Rate (dEHR). You need to know your rEHR before you can accept advice to charge $x/hour or that $x/hour is the “going rate.” Even if $x is truly the going rate, what does it matter if by charging $x/hour you do not earn enough to be profitable?

When assessing your business’ health, you need to have all your data at hand. You need to know, for example:

  • how many hours and weeks of work have you averaged over the past few years
  • the likelihood of your being able to maintain that amount of work over the coming year
  • how much you owe others
  • your living expenses
  • how much you need for a rainy day fund
  • your costs of doing business (e.g., marketing, internet access, computer hardware and software)

With this information, you can calculate your rEHR, which represents the minimum amount you can earn per hour to support your lifestyle. This number is fundamental to many business decisions you need to make, starting with whether you can afford to continue editing space opera novels for independent authors and ending with figuring out how to expand your business through marketing.

If your rEHR is high, that is, higher than you think or know the market will bear, then it will also act as an impetus for you to devise ways to make your workflow more efficient. I’ve told the story before about the origins of my EditTools macros, but I’ll repeat it here. I found that to earn my dEHR (not my rEHR) I had to either work longer hours every day or become more efficient in my workflow. The smarter way for me was to become increasingly efficient. As my efficiency grew, my work hours became fewer but my EHR grew. Eventually, I found that I could reduce my working hours by 25% yet raise my EHR so that it approached my dEHR. I was able to do this by creating EditTools macros. I invested upfront time, money, and effort so that I could repeatedly, over the long term, increase efficiency.

The dEHR is the hourly rate I would like to earn. It is not an hourly rate I can charge my clients, few would be willing to pay it. It is an EHR that is greater than my rEHR, which represents the minimum EHR I can earn to meet the costs of lifestyle. When I earn more than my rEHR, my business is healthy and profitable; when I earn just my rEHR, my business is healthy but not profitable; and when I earn less than my rEHR, my business is unhealthy and unprofitable — it is losing money and thus costing me money.

When someone online tells you that the going rate for copyediting is $25/hour and you do not know your rEHR, you do not know whether your business will be healthy, healthy and profitable, or unhealthy and losing if you charge that $25/hour. If you know your rEHR, then there is no need to ask others what to charge because you will know what you need to earn. Instead, you will need to focus on determining how to calculate your fee — hourly, page, project, word, character — to meet your rEHR and to work toward your dEHR.

It is important to think in terms of efficiency and EHR. And it is important to remember that if you charge your client by the hour, whatever you charge as your hourly rate does not change — $25/hour remains $25/hour — whereas if you charge by the page, project, word, or character, your EHR can fluctuate up and down so that the more efficient you are the higher your EHR can be.

Regardless of how you calculate your fee, the bottom line is that your business being healthy relies on your knowing your rEHR, not on what someone responds in response to “What should I charge?” or “What is the going rate?”

Richard Adin, An American Editor

September 13, 2017

The Business of Editing: Undercharging?

Recently, Jake Poinier wrote an essay titled “Stop Worrying About Freelancers Who Undercharge.” It is an interesting essay and one certainly worth reading, especially as the advice he gives, which is summed up in the article title, is sound — as far as it goes.

Overall, I agree with Mr. Poinier’s advice. However, two things particularly struck me about the essay. First, “undercharging” is never really defined. The implication is that people who charge on the low end of the fee scale are undercharging, or if your competitors charge less than you think is the correct rate, your competitors are undercharging. The second item that struck me is that the essay fails to give guidance as to what is a proper amount to charge. After all, undercharging only has meaning if there is a universally accepted amount against which to measure.

(Okay. Actually there is a third thing that I find bothersome: the use of “undercharge” to describe the issue. Undercharging and its opposite, overcharging, are generally associated with a seller–buyer relationship, not with a competitor–competitor relationship. Competitors underbid and undercut. The reason is that there has to be a universally definable and applicable sum against which under- and overcharging can be measured for everyone. That can occur with a readily defined product in a seller–buyer relationship, a good example being price shopping a specific model of automobile. In contrast, with undercutting [or underbidding] there is rarely [if ever] a standard sum; there are too many variables that are unique to each competitor so no standard price exists. Undercutting is relative to the competitor’s pricing strategy, not to identical goods and services. But for this essay, I’ll accept that “undercharging” is the correct term.)

These issues are not only intertwined but need to be tackled in reverse order. So I begin with the measure.

What is the proper amount to charge?

In the world of editing, there isn’t a readily definable, measurable, or acceptable “going rate.” When someone asks the question, “What is the going rate for copyediting?,” no single, universal rate is ever quoted. Just as importantly, there is no universal definition of what constitutes copyediting. True, there are some commonalities that nearly every editor will name but then there are the variations that appear when defining their own services.

If the service does not have a universally definition and if editors cannot state a “going rate” that every editor recognizes as the “going rate,” then how can anyone determine “what is the proper amount to charge?”

More importantly, this is a question that cannot result in universally accepted answer because for each of us the point at which loss becomes profit differs. As importantly, this number changes as circumstances in our life change. This doesn’t mean that there isn’t an answer to the question. It means that the answer is personal and cannot be found by asking in online forums.

The proper place to begin is — as I have stated numerous times — with determining your required Effective Hourly Rate (rEHR). (For details on how to determine your rEHR, see the five-part series, The Business of Editing: What to Charge.) If you do not know what you need to charge in order to be profitable, you cannot know whether you are undercharging — you need something to measure against.

This raises another point, which is implicit in saying that the answer is personal: each editor’s rEHR is personal and different from that of another editor. For example, in my case, my rEHR 25 years ago was significantly higher than my rEHR of today. Twenty-five years ago I had to plan on paying for college for my children, I had to support two automobiles, I had a mortgage to pay, I needed to fund my retirement. Today, my children are years out of college, my mortgage is paid, I only need one automobile, I no longer need to fund my retirement. My circumstances have changed and so has my rEHR. If 25 years ago my rEHR was $50 an hour, then I needed to earn the equivalent of at least $50 an hour to meet my expenses. If I earned $49 an hour, I wasn’t earning enough to break even — I was losing money.

It made no difference if my colleagues were charging the equivalent of $20 per hour — I couldn’t charge that and put food on the table if my rEHR was $50. Were colleagues who were charging $20 undercharging? Or was I overcharging?

Colleagues charging $20 were undercharging if their personal rEHR was higher than $20; if they had calculated their rEHR and it was $15, then they were not undercharging for themselves. That they were able to charge less than me and still be profitable has nothing to do with undercharging — instead, it is a reflection of their business status (and, perhaps, acumen).

That today my rEHR is significantly less than it was 25 years ago and thus permits me to charge significantly less than what a colleague can charge for copyediting (assuming my colleague knows her rEHR and doesn’t charge less than her rEHR) does not mean I am undercharging — underbidding, perhaps, but not undercharging.

What is undercharging?

Editors do not define the services they provide under the rubric “copyediting” identically. Each of us defines what we will do in exchange for a quoted fee. That is the basis for the adage “quality, speed, cost — pick any two.” The idea is that something must be sacrificed and we often define “copyediting” based on this adage.

If, for example, “copyediting” usually includes basic fact checking but the client wants the 500-page manuscript edited in 2 weeks and is willing to pay $500 for our efforts, our definition of copyediting might change to exclude any fact checking. The point is that the definition of the services we each provide is both fluid and not universal.

Yes, some professional organizations and some editors do post online a definition of copyediting, but those are not universally accepted definitions and, at least in the United States, not mandated. So, in the absence of a universally accepted and applied definition of what constitutes copyediting, how can it be determined that someone is “undercharging” for copyediting services? If you include fact checking and I exclude fact checking, our services are not comparable and my lower price may reflect my exclusion of fact checking.

In the end…

What all of this amounts to is this: Ignore what colleagues are charging unless you can determine that everything about your and your colleagues’ services (both as defined and as provided) are identical in every possible way and that everyone’s rEHR is identical. Absent that you should focus your energy on determining what your rEHR is and making sure that you can meet (or better, exceed) that number.

Asking what a colleague charges is a waste of time except for satisfying curiosity. Your fee should be based on your needs (your rEHR). There will always be someone who charges less and the reasons are many, including they are less skilled, they offer a lower-quality end product, their rEHR is very low, or, most likely, they have no clue what their rEHR actually is and have picked a number out of the air because it seems in line with what others charge or has been mentioned online somewhere.

If you haven’t read it recently (or at all), in addition to reading The Business of Editing: What to Charge, take the time to read The Business of Editing: “I Can Get It Cheaper!” A client can always get it cheaper because there is always someone who is willing to work for less. Fighting back by lowering your price is a losing proposition. Instead, learn how to set a correct price, stick with it, and convince clients you are worth it.

Remember this: If you do not think you are worth at least your rEHR, you probably aren’t, and clients will think the same. Clients almost always believe the same about you as you believe about yourself.

Richard Adin, An American Editor

August 21, 2017

From the Archives: Business of Editing: Liability Insurance — Nyet

(The following essay was originally published on
 An American Editor on May 22, 2013.)

One problem with working as an editor for large organizations is the contract that the organization wants you to sign. Some of the clauses have validity, others I wouldn’t sign regardless of the promised fee (see, e.g., The Business of Editing: Contracts — A Slippery Slope and Editors and Contracts: Editor Beware!). Recent discussions on various lists have focused on another requirement: the requirement to carry liability insurance (an errors and omissions policy) for such things as defamation and other events that have nothing to do with editing.

These contracts are boilerplate and prepared by attorneys who rarely have a clue about what an editor does for the express purpose of covering all of the possible arcane matters that can affect a publisher. As editors, we need to say “Nyet!” to these inapplicable clauses.

When I am faced with a demand for errors and omissions insurance, I ask the client to specify clearly and precisely against what risks I need to insure myself and against which the client will seek indemnification. I point out, for example, that defamation is not something an editor does; it is something a writer does. I make it a point to educate the client as to what precisely an editor does and does not do, after which I ask the client whether I am being hired as an editor or to perform some other function, one that has the potential to make me wish I were insured.

If the client expects me to undertake tasks that could make me liable for such things as would be covered by an errors and omissions policy, I know I need to decline the job — because it is not an editing job. Copyeditors don’t decide dosages or medicines, don’t determine whether a beam’s angle is correct, do not determine whether a street is a dead end or a highway on-ramp, or whether a named person is properly described.

I also ask the client whether the client truly believes that anyone would issue an errors and omissions insurance policy that protects against subjective decisions. What I mean is this: What insurance company will insure against my choosing to refer to people as “that” instead of “who” (as in “the patients that” vs. “the patients who”) or will reimburse the client for my use of “followup” (which the American Heritage Dictionary 5e says is OK, along with “follow-up”) as opposed to “follow-up” (which is the only form accepted by Merriam-Webster Collegiate 11e)?

“And what,” I ask clients, “if I use recur when it should be reoccur” (in case you are wondering, except, for example, in medicine, recur means to occur repeatedly whereas reoccur means to occur again once; in medicine, recur is used for both meanings)? “Do you really think an insurance company is going to pay a claim for my using one over the other?” What if I don’t use serial (Oxford) commas or if I do use them and the nonuse/use changes meaning (as in the infamous “eats, shoots and leaves”)?

Every editor knows that issues of language and grammar are rarely right-wrong matters; rather, they are matters of opinion in the sense that both sides of a language and grammar question can be, and often are, correct. How do you insure against making a decision that can be correct but just doesn’t tickle a client’s fancy? Perhaps spelling is in a separate category most of the time, but as followup versus follow-up illustrates, spelling is not in a separate category all of the time.

Clients are intelligent; what clients are not is omniscient. Consequently, when I am faced with a contract clause that requires me to obtain errors and omissions insurance, I endeavor to educate the client. First, I ascertain what the client thinks my job is. Then I educate the client as to what my job really is. If we cannot come to agreement on the parameters of the job I am being hired to do, I say thank you and walk away. To do otherwise is to bring me trouble.

A fundamental rule of editing is that client and editor must agree on the parameters of the job or the client needs to find someone else to do the job. Any editor who fails to grasp and embrace this rule is bound to have unsuccessful client relationships.

After I educate the client about what my job is, I undertake to educate the client as to why the insurance clause should be stricken. The usual response by a client is that if the clause has no relevance to my work, then we’ll leave it and ignore it. Alas, to agree to leave and ignore is to invite danger (for me) into the client-editor relationship. Meaningless clauses need to be struck, not ignored, because once a contract is signed, the unstruck clause is no longer meaningless. It may be that I cannot be held liable for defamatory text written by the author, but I still need to buy the insurance or be in breach of the contract. And do I really want to incur the expense of defending against a client’s attempt to make me liable for not catching that the dose should be 12 mg, not 120 mg?

If the client insists on retaining the clause, I send a revised estimate for the project. I take my original price and add to it a price for the purchase and administration (i.e., my administration) of the insurance. I submit that revised price to the client and explain that my other clients do not require such insurance and that it will be a special purchase just for this client, thus the additional charge. In addition, because the purpose of the insurance is not to protect me but to protect and indemnify the client, the only beneficiary of the insurance is the client, so it is only fair that the client pay the cost.

My experience has been that at this point the client is willing to strike the clause. But I am prepared for when the client simply says sign or go. I always will (and have occasionally had to do so) choose go and refuse to sign.

The only insurance I carry specifically for the benefit of clients is Worker’s Compensation. I maintain such a policy because it proves to the IRS that I am an independent contractor and clients who worry about proving that I am not an employee accept the certificate of insurance in lieu of all other items of proof, such as copies of tax returns or lists of clients, that they would otherwise require (and which I do not wish to divulge).

Part of being a businessperson is drawing lines that I will not permit clients to cross. Those lines are important. They form the basis of the relationship between me and my clients. One of my lines is that I will not sign contracts that contain terms that are not applicable to what I am hired to do, especially if those terms will cost me money.

What do you when faced for a demand for an errors and omissions insurance policy for your copyediting work?

Richard Adin, An American Editor

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