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A client is seeking to retain a risk mnaagement consultant on a annual basis to assess and assist in the management of risk. Any ideas as to the cost of such a contract. They would be assisting with insurnace, loss prevention and other risk related consulting.

I'll assume the job is part-time.

Most of the qualified consultants I know in the NW are charging around $75 to $125 an hour. Inclusive of all expenses like per-diem and travel.

Obviously, it depends on the type of industry your client is in, and the level of expertise needed by the consultant.

Swymmer

I have seen consultants charge hourly fees up to $500 per hour, charge a percentage of premium, charge by claim/employee, or charge a fee based on marketing the account and splitting the decrease in premium. This is based on size of the account and the complexity of the placement.
There are agencies here in NY/NJ area that provide RM tools free of charge as part of their value added services. Contact me direct at rlevine@alliedna.com with more specifics on your account so I can provide you with additional feedback.

Typical consulting fees should run closer to $150. They can vary for the functuons involved. For example, handling the insurance and traditional risk management functions might run $125 - $150. Clinical risk management by a nurse with risk management certification could run from $125 - $200, plus travel expenses. Specialty claims handling expertise might run a little higher. I have some potential conacts in the Northwest and would be glad to discuss. tmurphy@commonwealthrisk.com

Thanks for great info....

Late to the party... Not sure how I missed this one!

Think of the inherent conflict in a consultant working by the hour. It is in the consultant's interest to work slow - more hours. It is almost always in the client's interest to get the work done fast - results come online faster.

A comic strip once had two business people talking. One asked the other, "What methodology do you use for $300 an hour?" The other answered, "A very slow one."

My fees for insurance review projects run from $4,500 to $45,000 depending on the value the client is looking for. Projects last from 3 weeks to a year or more.

I urge the consultants I mentor with to stay away from hourly based fees and contingent fees. They both hold potential conflicts of interest.

I am with Scott on this one.

Recently had this conversation with someone. Lets say that you are a consultant and the project you are working on has ability to save your client tens of thousands of dollars over the next two years. Does the fact that you can provide the solution in a certain number of hours properly compensate you for your providing your skills/knowledge/abilities?

The use of an hourly fee does provide conflict of stretching those billable hours versus a project fee that entails all details.

The project fee provides all parties with a known and firm figure, while the hourly does not necessarily.

Now if all you are providing is an outsourcing of processing services, then the hourly is likely more appropriate.