legal documents/price vs. cost
From: Hungerford, David (dghungerforducdavis.edu)
Date: Wed, 3 Aug 94 15:33 CDT
On 8/2 Gareth Fenley wrote:

>another member of our group contacted The Cohousing Company and via them, 
>was offered the chance to buy sets of documents from 2 different 
>cohousing communities at a premium charge of something like $50 apiece. 
>our group did not take up this offer.

Because I had recommended to Gareth that he go to The Cohousing Company for 
our (Muir Commons) bylaws, I was especially concerned (and surprised) at the 
price they were charging.  When we decided to give the documents (as in free 
of charge) to TCC, despite our substantial monetary investment (somewhere 
between 3 and 5 thousand dollars, the actual fees were combined with other 
legal costs, so I don't know exactly without looking back at the billing) and 
a kazillion hours of group time (remember, we HAD NO MODEL,) our 
understanding was that they would distribute them "at cost."  We did this 
because, while we want to be as helpful as possible to new groups, we were 
being swamped by requests for our documents.  We did provide copies at 
xerox+mail cost for awhile, but the people doing the work found that they 
just didn't have time to fill all the requests and answer the inevitable 
questions people would call and ask after receiving them.  Our main contact 
person, Cathy duVair, found she was spending almost every evening on the 
phone answering questions and taking requests (this during the period just 
after move-in, when all the network/NY Times/Wall St Journal/PBS/Newsweek 
etc. publicity was happening).  We felt this was an unfair burden, so we gave 
the docs to Chuck and Katie.

I just got off the phone with Ellen Hertzman (sp?) at The Cohousing Company, 
and she explained that their pricing decision included xerox cost, mailing 
cost, and the cost of having someone do the work, answer the phone, and talk 
to people when questions arose, and that they felt that $45 IS their cost 
for providing the service.  I ran up some numbers and come up with the 
following:     

1) xerox cost.  The Muir Commons Bylaws are about 90 pages 
long, that's $4.50 at $.05/copy.     
2) mailing cost.  First class, if they copied front and back, would be about 
$2.50 (50ppgs+cover letter+envelope weighs about 10oz)
3) employee time.  Let's say it takes 15 minutes to take an order, chat 
briefly to explain what's available, do the copying, and post it.  Assume TCC 
has a generous benefits package and the employee costs $30/hr, that's $7.50.

so the out of pocket costs to TCC are in the neighborhood of $14.50.  BUT how 
much does it cost them to BE THERE TO DO THIS????  Not to defend the current 
price they're charging, but they are trying to make a living doing cohousing 
promotion (like many other "cohousing" consultants.)  Yes, it IS very 
generous of Rob Sandelin and others to donate their time to your group so you 
can join us in the cohousing lifestyle, but that doesn't change the fact that 
The Cohousing Company has a payroll, office expenses etc.  Besides, when you 
hire a lawyer to put together your own documents (DON'T EVEN DREAM ABOUT 
DOING IT ENTIRELY YOURSELVES) you'll be paying at least $125/hr. If these 
documents save you 30 minutes of billed lawyer time, you've made money on the 
deal.

Ellen told me that they were reviewing their pricing policy, since they 
were getting some negative feedback about the price.

If my opinion about all this is unclear in this posting, it's because I'm 
unclear what my opinion is.  I do feel that the world would be a better place 
without the profit motive, that is, if everyone behaved generously and 
altruistically. . . like the Amish, or the crew of the Enterprise :-) . . 
 but since we all (except the idle rich) have to work for 
our livings, I don't feel that Chuck and Katie are out of line in attempting 
to recover some of their "free" costs (talking on the phone, promoting the 
idea of cohousing, answering questions and basically serving as a free 
resource for general information) through these documents.  Remember, if they 
hadn't begun promoting the idea (they self-published the first run of their 
book before being picked up by Ten-Speed Press), the only cohousing community 
in the U.S. would be "N" St. in Davis, and they wouldn't know what to call 
themselves (just a joke, Kevin and Stuart). 

By the way, collecting the sample documents as part of resource network 
seems like a great idea to me.  But, who will do the work of distributing 
this stuff for free?

David Hungerford
dghungerford [at] ucdavis.edu
Muir Commons

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