No more free labor

http://money.cnn.com/2009/06/19/smallbusiness/no_more_free_labor.fsb/index.htm

by designtofly • 17 years ago

55 16 17 years ago

money.cnn.com

lsc• 17 years ago

oh man, hasn't everyone had this stunt tried on them at least once? I guess I'm kindof an impatient jerk about money, though, 'cause I'm pretty quick to say "Ok, well, I'm not working on your project until I see a cheque"

you need to be especially careful of this if you are using a third-party broker or body shop. I find that going direct means that you usually deal with people who are much less slimy.

The key to getting paid is the willingness to walk away. First, if you are doing work before getting paid, remember you are giving them a loan. Never loan someone more money than you are willing to walk away from. And cut your losses early. If they won't pay you after one month, they probably aren't going to pay you after two or three months. stop work. do something else. If they decide to pay you, great. you win. If they don't, well, you are only out one month rather than 3 or 6 months, so you don't lose quite as much.

lionhearted• 17 years ago

There's about 10,000 little painful lessons like this, that you usually learn by making the mistake and cursing repeatedly and vowing never to let it happen again.

If you're lucky, you'll be able to pick up a few of the 10,000 painful mistake lessons from reading about them or being taught them. But most of us are rockheaded and insist on making the same mistakes as everyone else until it's happened to us. Better to learn from a close associate or someone else's story when possible, but people aren't so good at that. But life goes on, as it were. Making those mistakes is where a lot of your skill and lessons come from.

cunard-n• 17 years ago

I find that the corellary is that it's this pain and these lessons that give you such a leg up on the recent graduates just getting into the business. They don't know how close everyone always is to the line. This relates back to the old "don't spend money on office furniture" (in a startup) advice.

edw5192• 17 years ago

I have a simple rule.

As soon as any invoice is one day late, all work stops until the account is up to date. There is no excuse for not paying your bills.

I mean it.

DanielBMarkham• 17 years ago

This is a cumulative problem -- the more you let them slide, the less value they're going to give your work.

If you give something away for free, by definition, your work is worthless.

I have a clear contract and clear expectations, and every week I confirm, in writing, with the client that the work is meeting their expectations. Everything may still be "subjective", but when you have a written record of them saying you're doing a good job, and then still not paying? It's a different ballgame.

In general, what separates good consulting from bad consulting is the ability to say "no".

swombat2• 17 years ago

Architects have a subtly different but related problem.

They bill at the end of the month, and the standard, as everywhere else, is to send Net 30 invoices. So it can be 30 days before the client is officially "late", by which time they've done 2 months of free work. In these uncertain economic times, a lot of clients are actually going bust without making a lot of noise, so architects end up exposed to losing 2 months' worth of fees.

There's an even bigger "free work" problem for them, though: a lot of their work is speculative - responses to "competitions" which other architects are applying for too. Whoever wins the competition does get the job, usually, but that still leaves out a bunch of people who worked for free to submit designs for that competition (and often elements of their submissions might make it into the final design, based on client requests, after the competition is lost).

Hard times to be an architect...

edw5192• 17 years ago

Writing a proposal isn't free work, it's marketing expense.

The other things you mention are just the things you have to put up with in a service business. Sure you can lose a bid and have someone else implement your idea.

It's the nature of a service business to have a customer into you for 2 months. I have found that the best way around this is insisting on different terms. If I know a customer may be having "issues", I have insisted on Net 7. They always object, but give in if they can handle it. If they won't give in, I figure that I've just sidestepped a big potential headache. You need to fire your bad customers as early as possible.

I sympathize with your industry. It sure is a tough time to be an architect. Best wishes.

swombat2• 17 years ago

I'm not an architect, actually, I just run a service/product for them (http://www.woobius.com), and I've learned a few things about their industry those last few years...

I agree with your point about competitions vs proposals, btw - that doesn't make it nice though!

tptacek• 17 years ago

Can someone explain the "subjective contract" think that happened towards the end of this article? Also, assuming they never got paid by the client, I assume they packed up their marbles (and the site they built for the client) and went home.

eugenejen• 17 years ago

I am not an expert in this domain. I guess they never formalized the requirement of the site in written document. So it is very hard to determine objectively by 3rd party. And at the same time. It is hard to put all requirement into text for software developers. But a formalized requirement is protection/insurance between customers and contractors.

I found there are similar problem in UAE that British building contractors has problem in getting paid because the UAE customers always demand updating in the building and never trying to give an objective criteria of the finishing decoration of the building. I guess they suffer the same problem in finish the web site.

billswift• 17 years ago

I used to work for an architectural and landscape designer in the D.C. area in the 80s and 90s, his solution to constant changes was to only work cost plus, on a week to week basis. Every week he met with the clients, let them decide what was most important to them to get done over the coming week, and get a check for the previous week. It also helped the clients feel more involved in what they were paying for.

grandalf• 17 years ago

great job on the article, guys... (i met these guys a few years ago and they are very cool)

ubernostrum• 17 years ago

The trick I learned in my freelance days came from a designer friend who'd picked this up the hard way and developed his own nuclear option for non-paying clients. Whether it works for a given contractor depends on what the contractor is doing, and so consulting with a lawyer (I am not one) is important. But in general it goes like this:

Step 1 is to ensure in advance that your standard agreement includes clauses indicating that creative work you do is not work for hire, that you will, at the start, retain copyright in that work, and will assign the copyright to the client on receipt of payment in full.

Step 2 is to go through the normal process; if they don't pay, you send invoices, attempt to negotiate, etc.; make a good-faith effort to resolve the problem.

Step 3, if the client still refuses to pay, is a DMCA takedown. You don't have to go to court, you don't have to get into legal wrangling about contract terms, you just get their site taken down until they pay up, which they often will.

Of course, they'll give you a bad reputation and you'll never get business from them again, but you'll have food on your table and they'll have learned an important lesson about trying to screw their contractors.

robryan• 17 years ago

I know it's not always possible with websites but developing on your own server or locally can reduce this problem. I'm not sure about the circumstances in the article but the customer isn't going to be able to make these demands if they haven't got th product yet.

I'm assuming this may need to be done in conjunction with holding the copyright to the end.

No more free labor

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