The first thing to do when you approach a freelance editing project is figure out how heavy the editing needs to be. That will determine the fee you set. For example, if I look at a book and think all I’ll need to do is brush up the language a little bit and correct a few punctuation errors, the fee won’t need to be very high. But if I read through the book and realize there’s a lot of information missing and there will need to be major changes for the sake of the continuity of the story, it’s going to be a much heavier edit, and therefore the fee is going to need to be higher.
To get an idea of an appropriate fee for the kind of work you’re going to be doing, you can go to places like the Freelancer’s Union, and they can give you an idea of the typical rates for particular types of editing in your part of the country. If I’m working with an editor who lives in New York City, for example, I expect the fees to be much higher than if I’m working with someone in the middle of the country.
Always use a contract. Editing is like any other kind of job in this respect—you need to set clear expectations. If I look at something and determine that it needs a heavy edit but don’t explain that in the contract, then the client isn’t going to understand why I’m asking for such a high fee. The contract can also act as a sort of report card. You can go back to the contract and make sure that all of the expectations laid out there have been met. The contract is important for both sides—it clearly lays out what the client can expect the editor to do as well as the editor’s compensation for the work. I would never do a job without a contract, because I believe very strongly that it protects both the person whose work is being edited and the person who is doing the editing.