Posts
Renegotiating The Contract (And Other Tales Of Horror)
Posted: by Speider Schneider in Labels: business lies, buzzwords, contracts, graphic design web design, negotiating, speider schneiderYou’ve met with the client, done the creative brief, gotten some kind of written agreement or contract and work has been creative and progressing nicely. The joy and hope for life return as the promise of money looms so you start deleting the stored suicide notes and envelopes with instructions on notifying your accounts on Twitter, Facebook and LinkedIn because an overdose of sleeping pills is no longer your main retirement plan. Then, someone adds some numbers together and realizes you can’t be paid what was agreed upon. Suddenly your contract is either a weapon in a brutal fight or a throw away to keep the job going in hopes of some pay and a return client.
Many people practice starting an assignment only after a percentage of the job is paid. 50% is nice but it’s harder and harder to convince the largest of clients that they are not your bank and promises of paying thirty days after does not give you a warm-puppy feeling inside. I am currently awaiting word from a client who has to evaluate some concepts and inform me of which I can invoice (per piece). I am now in my sixth week of waiting and then await thirty days payment once the word is given. I’ll be paid faster than the waiting period for approval (large corporation). If you have the upfront fee, walking away becomes an option but if you don’t have the money in hand, you’re in a tough spot.
Usually you are sailing along and a coy message comes in from the client. I always, on hourly jobs, include a summary with each email, of the hours spent. Sometimes they actually pay attention and stand on the breaks so you can hear the job screeching to a halt. I have never met a project that didn’t go around and around and take a toll on hours. Clients rarely equate the hours spent on committee decisions. When they do and the budget is gone, whom do they turn to and make the work fit the budget? When this happens, the strongest contract is worthless if you want to finish the project, educate the client and show them a better method for coming in under budget while getting exactly what they want. The alternative is a collection agency
My Infamous Story of Averted Horror.
It was a web site for a mid-sized company. Since the boss’ son knew my wife, his cousin asked for the “family discount.” It wasn’t enough to sting, so I agreed on an hourly price and began. I was to work with the boss’ secretary as my contact person. A couple of weeks rolled by with changes and odd requests coming in. They were fixed and sent back for more, sometimes going back to a previous version. This went on for a while until I got a call from the boss one weekend. He was angry that I wasn’t following his directions and he wanted to know what my problem was.
I sent him several of the emails with instructions for changes and there was some silence on the phone before he muttered, “oh…my…God!”
He said he’d get back to me and hung up. Monday afternoon he called to relate a story not so odd, unfortunately. His secretary, it seems, always wanted to be an art director. She had no design training but apparently loved the idea of having the power to hold meetings and tell designers what to do, because apparently that was her impression being that’s all an art director really does. We drink a lot of gourmet coffee, too!
She was ignoring what the boss wanted so she could run the project and present it to him as her “art direction!” When I told him she had wracked up about $2,000 in changes, he hit the roof.
“You can’t expect me to pay that!?” he boomed.
“I did everything I was told to do by the point person you assigned me,” I answered softly, hoping my tone would bring him down a little. I knew he was furious but he wasn’t about to part with $2,000 extra (family discount included!)
“I can’t afford another $2,000 in the budget.”
“I can’t afford to walk away from $2,000 of work I did, forsaking other work, so the money can’t be replaced or forgotten.”
“You’re going to have to work with us on this,” asked the client, a little more down to Earth, but obviously worried I hadn’t given in right away and cut my bill.
“May I suggest you take it out of your secretary’s pay?” I softly suggested. “I’m sure she’s worried about losing her job right now and paying out of her pocket is probably a choice she’d make instead of just being fired.”
“I’ll get back to you,” said the boss before hanging up. His tone told me he hadn’t decided whose head would roll.
After about a week, he called back and informed me I would be working directly with him. He told me what he wanted before the secretary, whose name would never arise again in my dealings, screwed with his directions and the whole thing was done in a week. I don’t know what ever happened internally. I was called a couple of times to revise a page or two on the site but eventually they stopped calling and they had the site redone very cheaply, probably in cost and certainly in the look.
I did get paid the entire amount, minus the “family discount” and it led to more work. I hadn’t really re-negotiated but I was ready to do it to save the client. My gamble may or may not have paid off as the relationship went on for a brief period, but I was ready to re-negotiate something to keep the client with the “dysfunctional family discount.”
There are Many Times I’m Asked for Re-negotiations on Contract Deals.
Sometimes I renegotiate and I do better and sometimes you just have to take a lower fee and hope it leads to better down the road or cut your loses, take some money and learn a lesson. I wish I knew what that lesson was. I think it’s to say, “yes.”
A good client of mine, which is a huge corporate entity, assigned me a challenge of coming up with innovative initiatives. I could submit up to three and each accepted idea would pay me enough to buy all the fast food lunches I wanted for the rest of the next hour! Three were submitted but the point person didn’t feel one of them was quite there and would pay me a fifth of the agreed upon slave wages. What kind of candy bar would I buy with that money?
“I could never, in good conscience, invoice you for something you are not 100% happy with and will not invoice you for that initiative,” I wrote. “I must also state that this negates our contract for ownership on this piece only.”
He agreed and was obviously happy with the renegotiation as I have received some better-paying work since then, and I was happy to retain the rights to the initiative, which is being shopped elsewhere.
What if he insisted on paying less for the ownership of the initiative? I would have given in. The client is too important and all that might happen is my pride would be hurt and the client might make a huge windfall from the initiative and appreciate cheating me again in the future. Well, you know what I mean. They would see my value and obviously I’m willing to be “flexible.”
“Flexible,” in my experience with work and life, means I have to do something to inconvenience myself because someone else screwed up. I use different words, but never in mixed company.
In contract negotiations with a client, the partners agreed I should include “…and anything else we deem necessary" (people love this story, if they’ve heard or read it). Obviously it wasn’t acceptable to me to enter the slave creative trade and they told me they needed to work with someone “more flexible.”
My guess is they never found someone as they never launched their business or some poor soul is owed many thousands of dollars.
What Can You Do When Asked to Be “Flexible” with Work and Your Invoice While in Mid-assignment?
There are many schools of thought from quite acceptance to violent government overthrow. Let’s explore the middle of the road.
When asked out of the blue to reduce an invoice or provide extra, unpaid work, the first thing you have to do is think. It’s okay to let an email of this nature sit overnight, depending on the deadline of the project. If it comes via a phone call, then it is okay to tell the client, “I understand your dilemma and I’ll need to crunch some numbers and have an option or two for us that will make us both happy and we can finish this assignment on time. Let me call you tomorrow and I’ll have some great solutions.”
They may press you for an answer right away. The pressure will be put on you. Explain there’s a lot at stake and you want to be sure that everyone comes away happy from a renegotiation of the job.
If they press you further for an immediate answer, well, think quickly and involve them in the negotiation.
“The first thought off the top of my head, is too cut the number of changes by having one point person draw together the changes and decide what will be necessary. That will cut the number of hours. Does that help you out?”
"I can’t really cut the invoice because it’s time I can’t make up with other assignments. What if I stretch out the payments over six months so the overage falls into another budgetary period?”
“I’ll give you a discounted rate on the next assignment to even it out” (would THAT be something to use that line on the CLIENT!?).
“If you can get me two-dozen of the product, I can easily agree to a change in the monetary part of our agreement”
“There’s some products you carry that we could use for barter.”
“You have a service I can use, so let’s barter a service trade
*Check your local laws on the value of bartered goods for taxation purposes and always barter at their wholesale costs and not retail.
There are several ways of getting paid and still being “flexible.” When called upon to renegotiate, think of what YOU want. Do you want the client to be a regular client? Do they generate enough work to BE a regular client? Has working with them been an experience you wish to repeat? Is the fee structure good? What are you really giving up? Is another assignment awaiting you to finish this one? Will a few unpaid hours dent your ability to make more income on other clients? Is the client the kind of person who will appreciate your sacrifice? Will you get referrals from this client? Does the 50% you collected up front meet your output so far and can you just walk away and leave them to find another vendor?
There Are Such Big Lies Used Along with the Use of “Flexible.”
I was very close with many ad agency art buyers and once they were liquored up, I could get them to spill the industry lingo easily. They would laugh as they spit out slogans that had no meaning to anyone or anything. I think back to the many times I heard those slogans thrown in my direction and how the laughs must have mounted at my expense as I left.
“If you do us this favor, we’ll remember you did us a favor!”
“…and avoid you like the black plague because we owe you a favor.”
“We ran over budget on this job, but you can build it into your next invoice”
“…which will never be written because we can just keep doing this to a different freelancer each time and never run out of people to screw. Hail Satan!”
“It’ll take you ten minutes to do this!”
“…but six weeks of listening to me say ‘I’ll know it when I see it’ and hearing stories of my vacation to Fiji and new Maserati.”
“Could you discount this for a great client?”
“…even though you have never and will never meet them because they are too prejudiced against ‘your’ people.”
“I just don’t understand why a simple design for one simple movie poster would cost more than $500?”
“…after all, it’ll only be used for all the worldwide rights to all merchandise for this blockbuster film and we only expect the poster image will only bring in $485 million in sales.”
“Oops! I typed $500 instead of $5,000 on my budget report. Can you help me out here?”
“…so I’m not fired when you bring up the real contract to my boss.”
“The client loves your work and wants to use you on further assignments but could you lower your fee as sort of a test?”
“…which you will fail, even if the work succeeds. Hail Satan!”
Seems Satan has quite a following in advertising, like we didn’t already know that. How do you think agencies have work in the Super Bowl? Hail Satan! People will tell you all sorts of things to get what they want. We do it too. The key is to know when it is in our best interest to keep our mouths shut or to negotiate one’s way out to a happy land, a happy solution and as little of Satan’s influence as possible. You may not be shouting hail to him, but you’re stuck sitting next to him on a cramped bus during the entire ride.
