Billable hours

Typically, an entry-level worker takes home 1/3 of the billable rate.  The other 2/3 covers company overhead, overall revenue (and company profits if its lucky).  Your billable rate goes up based on your years of experience, licensure, etc.  There are no set billable rates for job titles in the industry at-large, although the rates for the principal and other LA at your firm are not unreasonable.  There is no correlation between billable rates and salary either.  I have a friend and colleague who is in his 50s with a BLA, is licensed, AICP, and spends half his week doing expert witness depositions for land use cases.  He bills upwards of 200-300/ hour when he does the depositions, and a far lower 100-120/ hour when he does site design.  He is not an owner in the company nor does he have a vested interest.  He is a senior level worker, but I don’t know his compensation (and I’m not interested either).  

If you are salaried, you get paid for working a full week, which is usually 40 hours.  If you work more than that, that is up to the company and how it views compensation.  Some offer larger bonuses, some work like sweat shops. Some offer comp time.   Some pay hourly over a full week for salaried. Some companies frown upon the worker billing more than a full week to a client.  I usually work a 50-60 hour week, and since I joined the firm I only once billed more than 40 hours in August 2012.  The client was a fee developer who had very unreasonable deadlines and I really did it as a warning to my boss and the client.  Last but not least, not all employers will pay you more just because you have >100% utilization on a time sheet.  

Keep track of your extra hours during the year.  It’s not necessarily something you want to show a boss at your review because it could backfire and you could come across as an opportunist.  However, if you have worked X number of hours over ~2,000 hours for the year (which we all do) but your employer doesn’t reward you appropriately, maybe its time to look for a new job somewhere else.  

Going back to your OP, if you plan on starting your own business one day, and hopefully that’s AFTER you are an RLA, you may want to consider reducing significantly cutting back your hourly rate if you aren’t bringing clients into your start-up.  Your focus is drumming up business to keep the company operational and that might mean putting up your own long-term savings or loans to keep it humming along while you build up your client base.  

I worked as an independent contractor on select projects for a landscape architect who started up his own firm from scratch (mostly park design and planting plans).  He probably put in a good 75-80 hour week for a good few years and was EXTREMELY choosy about bringing on even temp workers.  Keep in mind, this is 75-80 hours a week during the housing boom middle of last decade.  Timing is everything.  Factor at least 1-3 years of building the company to start turning a profit.  Landscape architecture is directly/indirectly dependent on development booms.  Don’t wait until the market picks up to start your business because development cycles may slow down by the time you’ve established your name and then there is no work again.  Start building the company a years before things start kicking up then you will be riding the wave a lot easier. 

A few other things that you need to consider before they bite you…

Make sure to include all the TAXES in the billable rate!

• federal – paid quarterly and occasionally ahead of future income to avoid penalties
• state
• local
• social security – you get to pay both halves of this
• medicare
• health insurance – not a tax or is a tax as determined by what you do per the aca
• unemployment – self-employed typically do not pay this; you’ll be off the grid

Taxes should not simply be paid out of the part you pay yourself.

Figure out your LIABILITIES: consider the type of business you are going to be and the insurance you will have to carry.  DON”T allow risks to family assets to occur.

Now you can begin to figure out the billable rate.