How to Raise Rates When You Don’t Have a Formal Contract

Many practitioners work without formal written agreements. The arrangement is understood rather than documented: a regular session, a recurring schedule, a rate that has been in place for some time. When a rate increase is warranted, the absence of a contract does not complicate the right to raise the rate — but it does require clearer communication, because there is no written agreement to point to as the formal structure within which the change is happening.

What the Absence of a Contract Changes

What nobody explains about informal practice and rates is that an informal working arrangement creates an implicit understanding rather than an explicit one. The client has come to expect the current rate because it has been consistent. The practitioner has not set a formal agreement to “lock in” any rate indefinitely, but the client may experience the rate as stable simply because it hasn’t changed.

A rate increase in an informal arrangement requires making explicit what was implicit. The practitioner needs to state clearly: this is the current rate, this is the new rate, and this is when the new rate takes effect. Without a contract to reference, the communication itself becomes the agreement. This means it should be specific, it should be in writing (even an email), and it should give adequate notice.

The Communication Without a Contract

How to communicate the rate increase without a contract in an informal context looks like: a direct message (email or written note) to existing clients stating the new rate, when it applies, and thanking them for the work together. The message does not need to be long or complicated. It needs to be clear.

Something like: “I wanted to let you know that beginning [date], my rate will be [new rate]. I’m glad we’ve been working together, and I wanted to give you advance notice so you could plan accordingly.” That is sufficient. It does not require justification beyond that, though a practitioner may choose to include a brief statement about the reason for the change.

The written message — even if informal — creates a record of the communication. This matters both practically and relationally: the client cannot later say they weren’t informed, and the practitioner has the confidence of knowing they communicated clearly.

Whether to Grandfather Clients in an Informal Arrangement

Grandfathering decisions in informal arrangements are often more fraught without a contract because there is no formal structure to reference. The practitioner may feel more pressure to grandfather because the relationship has an especially personal quality — many informal arrangements are with clients the practitioner has known a long time.

The grandfathering question is the same regardless of contract structure: is holding this client at the previous rate sustainable? Is it coming from genuine choice, or from avoidance? The answer to those questions matters more than the presence or absence of paperwork.

Holding the rate in an informal arrangement requires the same inner clarity as in any arrangement. The informality of the working relationship doesn’t change the practitioner’s right to price the work appropriately.

Going Forward: What to Put in Writing

A rate increase is also a useful moment to introduce more structure into the working arrangement. After communicating the new rate, the practitioner may want to establish a simple written agreement going forward — something that captures the rate, the session structure, and what happens when rates change in the future (for example: “rates may be reviewed annually with 30 days’ notice”).

Rate readiness regardless of contract structure is independent of whether the practitioner has formal agreements in place. The signals for when a rate increase is warranted are the same: full practice, consistent demand, developed expertise. The contract is the container; the rate reflects the work.

The Abundance GPS Skool community supports practitioners in building the structure their practice needs — including how to handle rate changes in every type of arrangement. Join us here.