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Basis for Client Billing Rate

We recently ran into a situation that made us question ourselves if we are doing it right. What I would like to ask is what basis you use for charging your clients i.e. Charge by function (i.e. Creative Development, Art Direction, etc.) or Charge by Title (i.e. Creative Director, Art Director, etc.)

The problem is when your Creative Director also does Art Direction, do you charge his/her time at his/her standard rate (regardless what function he/she performed) or you change the rate depending on what he/she did?

Any details, comments, suggestions, experience, and insight is welcome.

Johnson Paul
Controller
Campbell Michener & Lee Incorporated, Toronto

All off our staff members bill out at a different rate, but the rate never changes. Our creative director bills out at $150/hour - that applies if she is art directing, in client meetings, or creative directing. We bill by staff, not task or client. Hope this helps!

Terri Yuen
Office Coordinator
Malahat Group International/Palmer Jarvis DDB

We use a "blended" billing rate for everything. $150/hr charged by all billable staff.

Bottom line: The A/E builds the budget based on number of hours anticipated to do the job across all tasks. Then we stand back and look at the job overall for value pricing. Sometimes we increase price, sometimes we decrease price. Whatever the market will bear.

Roxanne Cowan
Rutherford Bolen Group Integrated Marketing

We use standard rate per employee. This can sometimes lead to problems and adversely affect profitability of the job.

Allen Corley
Controller
WarrenCordes+

Usually, we charge by title. If the creative director does the art direction and/or the studio work, we charge his/her rate as a creative director. We have figured out the hourly rate based on overhead expense including his/her salary. And if that client wants that much hand holding by the CD, well, they have to pay for it.

Shelly Constantz
WORK,inc