Post by agent69 on Apr 28, 2021 16:53:43 GMT
Some modest calculation to show you the amount of profit they make:
- Let say a simple clerk doing the KYC check. Nothing special. Probably paid £20-25k/year, that's about £100/day or £12.50/hour. So even if charged £200/h it's way over 10 fold margin.
- Now let take a higher up role, let say an accountant or something of that sort. These guys are usually paid £40-60k/year. So £150-200/day or £20-25/h (gross). At £300/h it's 10 fold again but of course it's way more.
I actually regularly work through design agency who will bill the end client. It's a similar set up, there is a bunch of employee in the agency who will do some work for the end client. The agency has to provide the office, support, furniture, computer, utilities so that the employees can do the job for the end client. There is of course directors, managers, business development, etc. etc.
And the rate are as follow:
- The design agency pays his staff between £20k and £80k depending on the seniority then charge back the client.
- A junior staff earning £20k/year will be charged £400/day. (Per day, not hour)
- A mid weight earning £30-40k/year will be charged £600-800/day
- A director/manager at £80k/year will be charged £1000-1500/day
And these agencies still thrive and keep growing. They regularly do pitch as well where they spent big amount of money resulting in potentially nothing. A £30-40k staff will cost the agency £150/day. Then it's charged back £600-800. That's where you have the earning fraction at 20-50% of the daily rate. That is what they should charge. That's how normal capitalism work.
Madness is when administrator can charge at an hourly rate what is usually charged at a daily rate in an open market system.
Unfortunately rates in some professions are high.
About 25 years ago I worked for a company that went to arbitration with the Welsh Office. Our QC was on £350 / hr and when he went on holiday shortly before a preliminary hearing we paid £20k to his mate to look through about 5 files of information and repreent us at a one day hearing.