Just over a year ago I announced that I had agreed (for the first time in my freelance career) to lower my hourly rate in order to stay afloat financially. In total I was asked by two tiny shops and one large agency to lower my rate. I agreed to the two tiny shops, but thankfully I managed to avoid lowering my rate with the large agency. The reason for this was because work had picked up, and I was able to use that fact as leverage. "If you don't want to pay me my normal hourly rate, then I'd be foolish not to go down the street and work for another shop who'll pay my rate." They really needed my help, so they agreed to pay my rate. Considering the shape of the economy at the time, I got lucky.
Leverage is a wonderful thing when it works in your favor. In 2009, a lot of shops used the poor economy as leverage to beat up freelancers on their hourly rate. And that leverage worked on the majority of freelancers that I talked with. But the new year has brought us new fortune, and now the freelancers have the leverage to demand their normal hourly rate again. From what I've seen there is far too much work out there, and simply not enough people to do it. I was at an agency several weeks ago and counted at least 10 freelancers of different capacities walking around. After talking with several of them, I found out that they were currently working at a reduced hourly rate. I was shocked given how much work there is, but after last year I guess it's not surprising to see folks just happy to be working at all.
I've been waiting for the second quarter of this year to arrive as the bean counters will be sharpening their pencils, and analyzing how well the first quarter went. I'm no economist, but judging from the amount of work now, there will be no slow down in the second quarter. Regardless of what the future holds, the market is tipped in the freelancer's favor right now.
Extended bookings aside, if you're currently working at a reduced hourly rate, then you really need to consider some quick renegotiation. It's simple economics. If you can't get the rate you want then just go down the street and get it. The work is out there, and that's all the leverage you need for a fair shake.
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