[tptacek]

I don't know if the "late payments" thing works for anyone else, but speaking from my own limited experience: it's better to take any given business concern out of your client's hide in increased rate than to add any complexity to contracts.

To a one, the most lucrative clients all have contracts reviewed by house counsel, and many have purchasing departments trained to do nothing but review contracts. Anything remotely complicated you put in a contract is (a) going to get stripped out and (b) potentially going to add weeks to the amount of time it takes to get a master agreement in place; more than once, a few weeks delay in legal was all it took for the window of opportunity for a contract to pass.

At any rate: you are exactly right. Have you ever seen a thread where Patrick, me, or some other established consultant harangued HN about raising their rates, and about not setting rates based on some double-digit-percentage uplift of what their last full-time job was? This is why.

[napoleond]

It might be a regional thing; every independent professional I've ever hired has done something like "Net 30; 1.5% interest per month on late invoices" so businesses here are used to it. I've never tried it myself (benefit is marginal compared to just raising rates, as you say, plus it's a PITA to actually enforce) but I don't think it would have presented any problems in legal. YMMV, obviously :)