An independent professional in my network recommended I watch a talk by Mike Monteiro called “F*ck You, Pay Me” when I asked for advice on contracts and client relations. Whether you’re freelancing, consulting, part-time, or full-time, the advice given applies to any contract you sign related to your professional skills. Below is a summary of the video and I’ll also cover how this can apply to a full-time position.
Caution: Hopefully the title tipped you off that this isn’t a “safe for the family” talk.
Video Link: YouTube
Related Podcast: http://fireballed.org/linked/2011/02/18/monteiro-pipeline/
When Things Go Wrong
The introduction to the talk went over situations where a project was underway and the client backs out, or tries to. There are so many different excuses why this might happen: we didn’t end up using your work, we found an internal solution, we decided to go a different direction, we found a cheaper contract, etc. In all of these cases, you found a client, invested in negotiating a project, gave up time that could have been spent on other projects, and then, they’re telling you they aren’t going to pay you.
Never Go In Without Protection
No one begins a professional relationship with the intention of screwing someone over. Well, maybe some do. Okay, someone might be trying to get free work out of you and everyone else is doing there best but bad things happen. Having a contract to protect you doesn’t mean you don’t trust the client, it means you’re aware that things could go wrong and both sides want to get out unscathed. There could be a mass layoff or a change in upper management cancels your project halfway though. Or maybe you have to cancel the project due to a family emergency. What then?
Always have a contract and always have legal counsel. The cost of legal counsel will pay for itself in the money and emotional effort saved trying to reclaim payment for your time spent. Contracts not only protect you from not getting paid, they can also protect your professional assets in the case of intellectual property. If a project isn’t completed, maybe you can take that website, re-skin it, and sell it to another customer. If that’s not in your contract, you can’t even recoup those costs.
Dos And Don’ts Of Contracts
- DO have a contract
- DO have legal counsel look over your contracts and the contracts your clients are proposing
- DON’T talk to your client’s lawyers directly; get your lawyer to talk to them before you agree to something accidentally
- DON’T agree to a contract based on “trust”; “trust us” is a red flag
- DO always negotiate the contract to ensure both parties understand what is being agreed to; if a client refuses to negotiate, that is a red flag
- DO include contingency plans around cancellation, partial completion, delayed payment, incomplete resources provided, and anything else the client might do to prevent you from delivering what you both agreed upon.
- DO ensure you are not liable for issues that may occur after completion of the project
Talking To Clients
The talk went over a few points about having conversations with clients. These are things to keep in mind for negotiation of the contract, reinforcing terms of the contract, and terminating the contract.
- Again, make use of legal counsel to say a contract is going to be terminated
- Be confident with your answers: a confident “I’ll find out for you” is better than “um?”
- Maintain respectful and professional dialogue – or as your lawyer to do it
- Try to make these conversations in person or at least on the phone – email will not work
- Find an ally in the client’s office or company that can tell you how the client operates to avoid misunderstandings
What About Full-Time Work?
You may not need a lawyer when negotiating your contract with a full-time employer but you need to take the same level of care when looking over the employment contract. Each state, province, and sometimes city has certain rules about employment, benefits, termination, and intellectual property. If you are working in technology, paying attention to non-compete clauses and intellectual property rights can save you a lot of trouble down the line. Here are some examples of what has gone wrong:
- Your coworker doesn’t want to pay for Photoshop so he uses his work laptop to do some freelance design work. Your company finds out and claims all rights to his work and all profits go to the company. The employment contract specifies anything developed using company resources belongs to the company.
- Your coworker decides to try a different tactic and built an app in his free time to try selling it on an app store. Your employer found this app and claimed all property rights of the app because in the contract it states any software developed during employment belongs to the company.
- Your friend is about to start a new job and your employer tells her there are full benefits. Your friend cancels her health coverage, anticipating the new plan. Unfortunately, the contract stipulates benefits don’t kick in until 100 hours of work have been logged. Now she’s stuck paying out of pocket for another plan, or worse, all her medical expenses.
- You decide you want to enjoy life more and negotiate for more vacation. Your contract specifies 2 weeks of paid leave but your recruiter and HR representative assure you it’s not enforced and up to 4 weeks is allowed. 3 months after you’ve joined, a new CEO cracks down on unreported vacation and you say goodbye to your globetrotting for this year.
- You hear about a friend of a friend that joined a top company with an extremely generous bonus and relocation package – all of which he had to pay back a year later when he decided to quit when he realized office jobs weren’t for him. Oh, and he had to pay back the amount that was deducted for taxes too.
There are more stories like this everywhere. Mandatory enrollment in benefits programs. No spousal benefits if they work for a company that has an equal or better health plan. Immediate termination if you misuse employee perks. All in the regular, 12 point font print, in the middle of the contract.
I’ve had employers encourage me not to read the contract because “it’s all standard” but there are variations depending on how on the ball the HR department is or how morally flexible the recruiters are. Despite being told that all contracts are the same, you can negotiate the terms away or find a job that doesn’t take all the side projects you develop while you are employed by them.
May the contract terms be ever in your favor.