Latest / Freelance Careers with Fexingo: Independent Work, Consulting, and Self-Employment / How Freelancers Can Use a Client Risk Register to Raise Rates
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- Lucas: So Luna, you ever feel like your rate is stuck because you're pricing based on your time rather than the risk you're absorbing? Luna: All the time. I've had clients who want a flat fee for a project that could blow up in scope, and I'm the one eating the variance. Lucas: Right. And that's exactly the problem. Most freelancers build their rates around cost-plus — hourly rate plus margin — but they never account for the risk they're taking on. So today I want to talk about a tool I call the client risk register. Luna: A risk register? Like the kind project managers use? Lucas: Exactly the same concept, but adapted for a freelancer's relationship with a single client. You list the specific risks you're assuming by working with that client — financial exposure, opportunity cost, liability, reputation — and you assign a dollar value to each. Then you use that to justify a rate adjustment. Luna: I love that. Because when a client pushes back on a rate increase, they're usually thinking about their own budget risk. You're flipping it and showing them the risk you're carrying for them. Lucas: Exactly. Let me give you a concrete example. A freelance UX designer I know — let's call her Priya — was locked into a flat $120 an hour for a year-long fintech project. The client was a fast-growing startup, and they expected her to be on call during compliance audits, which meant last-minute 60-hour weeks. Luna: So her effective hourly rate on those weeks was probably way lower, because she was working more hours for the same money. Lucas: Right. And she also had a non-compete that prevented her from taking other fintech work. So her opportunity cost was real. She built a one-page risk register with four categories. First, financial exposure: the risk of scope creep with no change order process. She estimated that over the year, undirected extra work could cost her 80 hours of unpaid time. Luna: And she put a dollar value on that? Like, 80 hours times her usual overtime rate? Lucas: She used her standard rate, actually. So 80 hours at $120 is $9,600 in potential lost revenue. Second, opportunity cost: the non-compete meant she couldn't take two other fintech projects she'd been offered, each worth about $25,000. So $50,000 in foregone income. Luna: That's a big number. And she was absorbing that risk without any compensation from the client. Lucas: Third, liability risk: she was handling user data in a regulated environment. If there was a breach, her insurance might not cover everything. She didn't assign a precise dollar value there, but she noted it as a qualitative risk. Fourth, reputation risk: if the client's product failed publicly, her name was attached. That's harder to quantify, but it's real. Luna: So she had a total quantified risk of about $60,000 on top of her base fee. How did she present it? Lucas: She asked for a 15-minute call with the client's COO. She said, 'I want to share a risk register that I use to manage my own practice. I think it'll help us both understand the value I'm bringing.' She didn't lead with a demand. She led with a tool. Luna: That's smart. It frames it as collaborative, not adversarial. Lucas: She walked through the register, line by line. The COO was surprised by the $50,000 opportunity cost. He said, 'We didn't realize we were asking you to give up that much.' And he agreed to a 22% rate increase, bumping her to $146 an hour, plus a change order clause for any work beyond the original scope. Luna: 22% is huge. And she got it because she made the risk visible. Lucas: Exactly. And the key is that she didn't say, 'I want more money because I'm worth it.' She said, 'Here's the risk I'm carrying for you. If you want me to keep carrying it, the rate needs to reflect that.' Luna: So how does someone listening build their own risk register? What categories should they include? Lucas: I'd start with four. First, financial exposure: any unpaid work, scope creep, delayed payments. Put a dollar figure on it. Second, opportunity cost: what other work you're turning down because of this client. Third, liability: any legal or regulatory risk. Fourth, reputation: how the client's performance affects your brand. Luna: What about single-client concentration? If 80% of your income comes from one client, that's a massive risk. Lucas: Absolutely. That can go under financial exposure or as a separate line item. The point is to be honest with yourself about the risk you're assuming. Most freelancers underprice because they don't think about risk at all. They just think about hours. Luna: It's a shift from cost-plus pricing to risk-adjusted pricing. And it's more defensible because you're not asking for a favor — you're asking for fair compensation for the risk you're taking. Lucas: Let me pause here because this ties to something I want to mention. If this kind of concrete, actionable advice helps you think through your own freelance business decisions, we'd be grateful if you considered supporting the show. It's what keeps us ad-free and focused on tools you can actually use. You can visit buy me a coffee dot com slash fexingo. Luna: Yeah, even a small contribution makes a difference. We put a lot of research into each episode, and knowing it helps people makes it worth it. Lucas: So back to the risk register. Once you've built it, how do you present it to a client? I think the framing matters more than the numbers. Luna: What's the wrong way to present it? Lucas: Bad: 'Here's all the risk I'm taking, so you need to pay me more.' That feels like a threat. Good: 'I use this risk register to manage my practice. I thought you'd find it helpful to see how I think about our engagement.' You're inviting them into your world. Luna: And if they push back? Say they argue the risk is just part of being a freelancer. Lucas: Then you say, 'You're right, some risk is built in. But I want to make sure we're both clear on what I'm absorbing so we can avoid surprises.' That keeps the conversation open. You might not get the full increase, but you've planted the seed. Luna: I also think the risk register is useful even if you never show it to a client. Just for yourself, to decide if a client is worth it. Lucas: That's a great point. I know freelancers who use it as a go/no-go tool. If the risk-adjusted rate would be higher than what the client is willing to pay, they walk away. That's a powerful filter. Luna: So for Priya, the register wasn't just a negotiation tactic. It was a way to understand her own business. Lucas: Exactly. And that's the deeper lesson. Pricing isn't about what you think you're worth. It's about the value you deliver and the risk you absorb. The risk register makes both of those tangible. Luna: One thing I want to add: the register works best for longer-term engagements where there's a real relationship. For a one-off project, it might feel heavy. Lucas: Agreed. For a short project, you can use a lighter version — maybe just two categories: financial exposure and opportunity cost. But the principle is the same. Luna: Alright, so practical next step: this week, pick your biggest client and draft a risk register. Estimate the dollar value for each category. Then decide if you want to share it. Lucas: And if you do share it, let us know how it goes. We'd love to hear stories of risk registers in the wild. Luna: I think this is one of those tools that seems simple but changes how you think about your business. I'm going to build one for my own clients. Lucas: That's the spirit. Thanks for listening, Luna. Luna: Thanks, Lucas. See you next time.