F*ck You! Pay Me!

October 16, 2011 8:08 AM

F*ck You! Pay Me! Customers not wanting to pay for work done (or pay less than what was originally agreed to) is a common problem that many business owners run into. In this 40 minute video, Mike Monteiro, a web designer, and his lawyer offer advice on how to get clients to pay up. The talk is aimed at freelancers and small firms that provide creative services. Note: There is some swearing in this video. [via Ask Mefi]
posted by Jasper Friendly Bear (51 comments total)

Obligatory.
posted by flapjax at midnite at 8:17 AM on October 16, 2011 [3 favorites]

Good talk, well presented. I would have thought the advice was obvious though: Write a contract (or detailed quote, or purchase order or whatever).

I would also recommend mandatory progress payments. It's easier to align your interests if the client "has some skin in the game".
posted by Popular Ethics at 8:31 AM on October 16, 2011 [2 favorites]

Free work has it's problems too. I do a lot of things with beginning designers and illustrators, mostly because that'w who I am around, but also because I don't make money off what I use them for. It's hard to justify paying anyone for my amusement (I still do). If I tell an illustrator, "I need a illustration of an ultrasound of a baby," and we've agreed there's no money in it, then I have to live with whatever I get whenever I get it. If I am paying $ for a picture of "a monkey in a top hat smoking a cigarette" and I am unhappy with something or want more I don't have to feel like a leech asking for more.

I do some tit for tat work for the above as well, but at the end of the day I'd rather just pay and be paid.
posted by cjorgensen at 8:40 AM on October 16, 2011

heh. Popular Ethics (eponysterical?) as someone who works with corporate contracts on a daily basis at a manufacturing site, I can guarantee that there are an astonishing number of small businesses out there (tho maybe it's just Boulder?) who are shocked! positively shocked! that we would insist on "wasting time with paperwork". o_O I don't even think they're trying to pull a fast one, some of these small businesses just genuinely don't get it.

let's not even begin to mention my friend set (a creative, disorganized rabble of artists, musicians, DJs, poi-jugglers, etc...) most of whom get positively insulted at the notion of all that capitalist bullshit. When I try to reasonably point out that it protects both parties and is in everyone's best interest, I get that sneer that tells me I'm thisclose to getting accused of being a capatalist pig, or worse, I get "see, it's attitude like yours that are what's WRONG with this country, man..."

on preview, what cjorgensen says, too. I'm not a capitalist pig, and I'm not going to nickle-and-dime someone for a couple days worth of cat sitting or whatever, but I try to explain to my friends that anytime you are agreeing that a value of something you do is worth more than, say, your next week's worth of groceries or a full tank of gas, or (god forbid) the next month's rent, you should probably think about getting something down in writing.
posted by lonefrontranger at 8:46 AM on October 16, 2011 [6 favorites]

Wow, a contract???!!! WHO'DA THUNK IT
posted by ReeMonster at 8:46 AM on October 16, 2011 [1 favorite]

The contract issue should be obvious. A couple of ways of looking at a consultant business, is that you don't do *design* for a living. You write invoices for a living. The design business is just an ends to a means. It kinda sucks, because you envision yourself as a designer. But to think of yourself as a writer-of-invoices will help.

Why will that help? One of the biggest obstacles for consultants is the business end. Be excited at writing invoices. It helps that you already wrote the progress payments and milestone clauses in your contract. Hit those milestones and get those invoices out. It breaks the contract total into pieces that will be easier to pay. There's good reasons for that, too, other than just collecting the invoices.

That first invoice, paid, is a tacit admission that the contract is valid. That will help when you need to collect later. Also, that first invoice is when the client will put up all the phony hoops to jump through. "Oh we need these in our special format". And it will acquaint you with the right folks to talk to in accounts payable.

If they don't pay the first invoice, don't deliver the next phase until you get paid. You'd be amazed at how some people won't pay unless you have something to lord over them. Frankly, I think it's weird and disgusting, but that's how it works. Get paid and deliver the next phase, bill it out, rinse, repeat.

Front load your contracts, to a reasonable extent. The last invoice, the one where you won't have leverage because there aren't subsequent phases - by the time you issue that, you should have covered all your costs. Hopefully, you will have a small profit by then. So if you don't get paid, you at least aren't totally screwed.

Don't procrastinate. Have the invoice ready to go the same day as your deliverables. Remember, you write invoices for a living.
posted by Xoebe at 8:53 AM on October 16, 2011 [52 favorites]

I can guarantee that there are an astonishing number of small businesses out there (tho maybe it's just Boulder?) who are shocked! positively shocked! that we would insist on "wasting time with paperwork".

As I have said in other threads, there are a lot of small business owners out there who really should not be running businesses. Really, if you do not want to run a business, dealing with paperwork, leases, invoices, taxes, etc -- if that does not sound at least somewhat engaging -- then you are better off working for someone else. Because you will

a) screw up and get in trouble with your customers, suppliers, or landlord
b) make excessive work for yourself when you are caught violating some regulation or other
c) heaven help you, hire your friends to do anything
d) waste time and money backtracking to fix problems
e) all of the above

Having a passion for a craft, genre, activity, what have you should be the icing on the top of the solid-business-plan cupcake. Otherwise, you are trying to survive on an ugly, melting pile of frosting, which doesn't taste all that good on its own, gives you mood swings, and eventually leads to diabetes.
posted by GenjiandProust at 8:59 AM on October 16, 2011 [12 favorites]

Even a contract, or in my world, doesn't guarantee payment. I shamed one client into payment by posting a thinly veiled threat on Facebook.
posted by Ideefixe at 9:05 AM on October 16, 2011 [1 favorite]

I always translate "let's shake on it" as "let's get some lube cos I'm gonna fuck ya".
posted by seanmpuckett at 9:11 AM on October 16, 2011 [5 favorites]

I don't know any freelance designer that hasn't been shafted on non-payments. Even contracts don't really help, as some clients are either actually broke (or become broke while paying you) and the hassle of threats / taking them to court are really not worth it. Sadly it seems the only way to avoid it is payment up front, and good luck finding that arrangement often.

I usually just suck it up as a business risk. Yeah you can protect yourself with contracts, payment in chunks of development, etc but nothing 100% guarantees you that your client won't just take the work and just disappear or say they can't pay you.
posted by xtine at 9:19 AM on October 16, 2011 [1 favorite]

If it's not enforceable, and it really isn't for small jobs, then you're just playing psychological games.... not that this sort of game doesn't work, but it doesn't change the situation. the other side of this is of course, if you fuck it up and still get paid, tough shit for the client. (to use some french...)

I think it comes down to the culture of the business really i.e. if your client is scamming his/her customers then they are going to scam you too. (if scam is too strong a word, try 'taking advantage" etc...)
posted by ennui.bz at 9:29 AM on October 16, 2011

I haven't had to check in some odd years, as the reason I stopped freelancing was because a) small businesses don't like paying a contractor that much for something they think must be so easy to do so b) they treat you like an idiot and an asshole.. but are there resources out there like YTWWN is to art theft for freelancers who aren't getting paid?

Some sort of place for shaming and bringing to light all of the companies that do this?

A photographer buddy of mine that actually gets some fairly large clients took to berating one that hadn't paid an invoice for going on a year on Facebook. The status updates kept rolling in, but I don't know if the client was actually following him or not. This doesn't seem like the most cordial way of ensuring payment, but it ended up working for him while letting his current clientele and those who see his profile in the future know he doesn't screw around.
posted by june made him a gemini at 9:41 AM on October 16, 2011

Well, one thing which a lot of design people don't seem to realize is that when a prospective client approaches you with work, the process of talking to them is as much an interview for the business to accept the client as it is for the client to accept the business.

I've known many people who discover during this process that the client has completely unrealistic expectations as to effort and cost required to do a project, and while they won't reject the client to his/her face, they will make sure that the terms of the agreement are such that either the client will walk away or that they're well protected and contracted for full reimbursement for the real requirements of the job and not what the client ignorantly feels is the correct pay.
posted by hippybear at 9:51 AM on October 16, 2011 [3 favorites]

Here's piece of advice that I got from a friend who has run a fair number of successful small companies and a charity: If there isn't a clear penalty attached to a clause in a signed contract, all you have done is state a preference. So, if you need a project done by 15 March, and no paperwork is ever signed, you have no recourse if the project isn't finished. Even if you have a signed contract that says "this work will be done by 15 March," unless the contract also says "for every day past 15 March, the person doing the work will pay a fine of $whatever," you really haven't ensured anything. They are in breach of the contract, but... I try to keep this in mind every time I am creating any kind of agreement, unless I don't really care about the outcome.
posted by GenjiandProust at 10:00 AM on October 16, 2011 [7 favorites]

Relevant to this discussion, for those who haven't seen it before (anyone?): Clients from Hell. Always good for a chuckle.
posted by adamrice at 10:14 AM on October 16, 2011 [2 favorites]

That was a very interesting video, thanks.

I guess the problem I've always seen with deadlines is that I've never even seen a software project that held a deadline. The biggest fear I have that stops me from wanting to freelance is that I know for a fact that I cannot predict how long it will take me to do anything. I think I can produce some very good, interesting, innovative (well unit tested!) code, but I've taken metrics on my prediction accuracy, and it has been regularly as bad as 15% (i.e. it took me more than 6 times as long as I imagined it would to do this thing). Granted, I'm most attracted to projects that are unlike anything I've done before.

I like programming, and I think I might like to freelance. I don't have a problem with contracts or paperwork, but I do have a big problem pretending I can predict the future when I feel like I have empirical evidence that I can't. How could I overcome that? (I guess being one of the few people I know who even want to improve in this area might be an advantage). I just see so many business decisions being made in favor of whoever in the room is most confident and assertive.
posted by SomeOneElse at 10:17 AM on October 16, 2011 [1 favorite]

The necessity of a contract seems self-evident to me, but I can see how this video might help someone just starting out in the business.

The larger issue here appears to be the staggering number of clients this man has who aren't happy with his work.
posted by secondhand pho at 10:20 AM on October 16, 2011 [1 favorite]

In my experience drafting and negotiating creative services contracts, the "IP transfers upon payment" provision mentioned in the talk is one of the most, if not the most, significant ways to protect yourself. I might also add "delivery of final deliverables upon payment".

For smaller clients/freelancers where your project fees are in the low thousands, familiarize yourself with your small claims court rules. If my enforcement efforts are likely to chew up most of the amount you're trying to collect, small claims may be a good option, depending on yours state's monetary limit.

As the attorney in the video said, if you don't have a contract I can send a sternly worded, but ultimately toothless, letter.
posted by schoolgirl report at 10:25 AM on October 16, 2011 [1 favorite]

He has a podcast which covers similar topics (he co-hosts with his researcher).

A lot of the time they answer specific-ish questions from folks who email in.

The larger issue here appears to be the staggering number of clients this man has who aren't happy with his work.

He's been in the business for decades.
posted by device55 at 10:26 AM on October 16, 2011

This is Basic Money Exchange 101. I've signed contracts with girlfriends over loans, just so if the relationship goes sour, the money isn't a tool for hurting each other - and if the money goes off-plan, it doesn't have to ruin the relationship (terms specify late payments).

One my my maxims:

Honest people don't mind signing clear contracts for obligations they intend to uphold anyway.
posted by IAmBroom at 11:00 AM on October 16, 2011 [17 favorites]

It must be nice to be able to turn down work because the potential client doesn't want to do paperwork.

Seriously, there are $10/hr (!!!!) design jobs in my state that get a thousand responses. We have no leverage.
posted by Brocktoon at 11:50 AM on October 16, 2011

One thing a contract can help with is establishing what, exactly, constitutes the "deliverables" that the client is paying for. Too often, a client will come to believe that, not only is their money buying them the 2000 full-color tri-fold brochures you designed and arranged to be printed, but they also believe they are purchasing ALL of your work files...every InDesign, Illustrator, Photoshop, etc. file you used to create the final printed product.

Many angry, heated arguments ensue when a client discovers that, no, they don't own those files. They own the final product they requested...the 2000 brochures and the final PDFs that were sent to the printer.
posted by Thorzdad at 12:06 PM on October 16, 2011 [1 favorite]

The larger issue here appears to be the staggering number of clients this man has who aren't happy with his work.

if you work with any number of clients, this is inevitable. Even if you do top-notch work, there will be miscommunications or the client will change their mind or they will have buyers' remorse when it comes time to write the check or you'll make a bad call and end up with a fundamentally dishonest client who never planned to pay at all.

In my hometown, there's a couple that has acquired, let's say... a reputation. They go into restaurants, they order big meals, they eat them, and they throw a fit about the terrible quality of the food and service once they finish. They hit a local Red Lobster where one of my friend works a couple of times, and they've managed to eat free more than you'd think is possible.

Other times, it's stuff like "Oh, Company X hired you to do the design work for an upcoming event, but the event got cancelled. Sorry!" Established professionals know how to handle these things: they point to the contract and say, "That's too bad! I'm sorry your event was cancelled. Now pay me for the work I did." Those who are less established are far more likely to cave at moments like that, but statistically we all encounter them eventually.
posted by verb at 12:12 PM on October 16, 2011 [1 favorite]

Seriously, there are $10/hr (!!!!) design jobs in my state that get a thousand responses. We have no leverage.

Those are the bottom feeders. They are the crowd that is being referred to in the word "crowd sourcing" There are tons of them. They have a Mac, and a bootleg copy of Creative Suite, and a couple of design books, and they did that one logo for their uncle Bob's towing company, and now they want to parlay their newfound talent into a new business. I praise the bottom feeders. They filter out the client rubbish.

What you need to do is develop a specific, marketable skill that clients can measure as a demonstrable return on investment. Solve harder problems for them and they will pay you. The trick to beating the crowd is not to compete in that arena – because you can't. Hint: being "interdisciplinary" or "full service" or whatever doesn't tell potential clients what you're actually good at. Become an expert in a specific problem-space and market the hell out of that expertise to the right people and you can't lose. You will become a professional invoicer.
posted by quadog at 12:12 PM on October 16, 2011 [6 favorites]

Seriously, there are $10/hr (!!!!) design jobs in my state that get a thousand responses. We have no leverage.

Not really, although I completely symp/empathize and can understand how you reached that conclusion. In my view there are thousands of completely incompetent web designers competing for thousands of incompetent clients who either can not or will not ever pay.

Your job, as a competent business person is to seek out the far fewer competent businesses who are able and willing to pay . I understand how you can feel otherwise , especially if you look at Craigslist gigs to try to obtain jobs. Craigslist gigs is for the most part where the thousands of incompetent business people try to hook up with the thousands of incompetent designers.
posted by Poet_Lariat at 12:12 PM on October 16, 2011 [6 favorites]

Yes, really. 5 years ago they would have had only 300 responses, and all of them shit. Now they're getting highly skilled, highly talented designers fighting for these jobs.
posted by Brocktoon at 1:48 PM on October 16, 2011 [1 favorite]

My husband is a consultant who has clients who pay his previous bills only when they need him again. Who try to do the work themselves, and have to call him in because they have well and truly snarled it up. And his clients, who also bill by the hour, generally have to deal with massive bill-paying services that deny any and all expenses for whatever random reasons they choose.

The point is the same as the "float" for check clearing. That is, to be able to use the money as long as you can for other things before you have to use it to pay the people who do work for you.
posted by Peach at 1:50 PM on October 16, 2011 [1 favorite]

Thank you, Jasper. I found that tremendously valuable.
posted by Dodecadermaldenticles at 3:09 PM on October 16, 2011

The content of this presentation states the obvious to most seasoned business people. However, the tone, the attitude and the profanity serve no useful purpose. Parading your lawyer in front of a bunch of people who signed up for the title of this program is gratutious and unnecessary. The presenter and his henchman are confrontational and arrogant. This type of demeanor shows through from the very beginning and not just prancing around at some conference. You can conduct business--even on a handshake--and rarely if ever need an attorney when you conduct yourself in a businesslike manner and when you adequately understand who you are dealing with. A "Fuck you" title may get these guys a lot of attention, but it also indicates that they are likely more trouble than they are worth. They belong in a side show, not in front of people trying to learn how to make a living.
posted by Sparkticus at 3:25 PM on October 16, 2011 [1 favorite]

However, the tone, the attitude and the profanity serve no useful purpose

'cept it's funny.
posted by device55 at 4:14 PM on October 16, 2011 [1 favorite]

My husband is a consultant who has clients who pay his previous bills only when they need him again.

I have one client that did that. They would sit on their hands and ignore my calls and emails until I had them totally over a barrel on one project earlier this year. I insisted on a BIG penalty clause, like net 30 with a 20% penalty on day 31 and 20% annual interest on the balance due - and magically got paid on time for that project.
posted by deadmessenger at 4:52 PM on October 16, 2011 [2 favorites]

I don't know any freelance designer that hasn't been shafted on non-payments. Even contracts don't really help, as some clients are either actually broke (or become broke while paying you) and the hassle of threats / taking them to court are really not worth it.


The one thing this (otherwise good) video ignores is that all the contracts in the world won't help when dealing with an out-and-out grifter.

Case in point: I got screwed like this back in June. I was working through another consultant (a former colleague who left the software company we both worked for to go out on her own) who was in turn subcontracting my work to her clients. She was billing her clients for my time, pocketing the proceeds, and then poormouthing saying that the clients hadn't paid her when I called her looking for my check. She dropped off the face of the earth when I confronted her with evidence (obtained from a friendly contact at one of her clients) that she had been paid, and demanded immediate payment under my contract. As it turns out, she was running a mini Ponzi scheme, using what should have been my money to fund a vanity project of hers, a Christian day camp that went belly-up shortly after I cut her off. As it turned out, she had run the same damn con on another consultant earlier this year.
posted by deadmessenger at 5:06 PM on October 16, 2011 [1 favorite]

Brocktoon wrote: Seriously, there are $10/hr (!!!!) design jobs in my state that get a thousand responses. We have no leverage.

You sure do have leverage: You're the one who isn't selling his services for $10/hr because of a lack of experience or ability. You're the one who has established relationships with other consultants who will refer their clients to you for projects that are beyond their ken.

I only accept clients on referral. That way, I know from the beginning that a) they pay their bills, and b) they're not complete ass-burgers. I know this because my contacts don't work for people who don't pay their bills and they fire ass-burgers. They have to do both those things to have remained in business for several decades.

I must admit, however, that I very often work without a contract on smallish jobs and even on the larger ones I often do a fair amount of work. It helps that I usually do integration, not design, so my work product isn't something they can just up and steal from a development site. Until they've paid money, they get to hear descriptions and see screenshots, nothing more.
posted by wierdo at 5:13 PM on October 16, 2011

Become an expert in a specific problem-space and market the hell out of that expertise to the right people and you can't lose. You will become a professional invoicer.

Absolutely true. This was key for me in developing a successful consulting business.

I only take two kinds of clients:

1. Small companies with active, authentic, online presences. These people live and die by their reputations, same as me.
2. Big companies with faceless accounts payable infrastructures.

When my payments are late, it's always from a #2, because somebody didn't fill out the right form in triplicate. But that's cool, I just have to nag until it gets done.

Companies like #1 usually pay almost instantly (like I do for my subcontractors).
posted by nev at 6:46 PM on October 16, 2011 [2 favorites]

You can conduct business--even on a handshake--and rarely if ever need an attorney when you conduct yourself in a businesslike manner and when you adequately understand who you are dealing with.

This is a matter of statistics, not a matter of character. Doing business on a handshake means you will, inevitably, get stiffed. It will happen with a contract as well, but it will weed out more of the wannabee grifters and protect you from the types who think you're their "partner in a project" rather than a professional they promised money to in exchange for work.

Mike's "I'm an asshole" schtick is a large part of his online and offline persona. I met him at SXSW a few years ago and I was wearing a shirt he designed. He saw it, nodded, and growled, "You buy that, or didja just copy it?" I laughed and said, "Yep. I bought it." He nodded and handed me a beer. You can certainly argue that his delivery is unnecessarily caustic and confrontational, but the majority of professional designers, contractors, and consultants feeling this particular pain often need permission -- whether they realize it or not -- to "stop being a nice guy" when the client rakes the work and bails.
posted by verb at 7:04 PM on October 16, 2011 [1 favorite]

Started my dev company - first big playing client - woohoo - but soon realised the PM was insane. he could juts NOT agree on terms in a simple contract - thought we'd got past that, then he demanded that we do not use the CMS (Mambo) for any other client - we explained that that was like telling the cab driver that the taxi cannot be resused. We ended up sacking them.

They had paid for the logo - and the jerk said "I don't know why we're paying for this, it's not like you need any skill" - he was a frustrated web developer which was probably his problem.

We shipped him the CS file but made the logo tiny - he then kept emailing us demanding the logo to be larger - our reply was always - you have the finished art - it's not like you need any special skills to resize it. Boohah.
posted by the noob at 7:08 PM on October 16, 2011 [1 favorite]

My brother is the poster child for how not to handle clients who default. When his client refused to pay, he seized the client's VCR. Helpful hint- the police are not sympathetic to this sort of tactic.
posted by happyroach at 9:13 PM on October 16, 2011 [1 favorite]

for those of you saying "make a contract":

just because you and your client have a contract, doesn't mean they'll actually pay you on time. and since freelancers are generally working with relatively/comparatively small amounts of money and likely won't go to court (because they, you know, haven't been paid so don't have money for a lawyer or court fees) large clients don't feel any pressure to pay on time.

i'm often months late getting paid, but there's nothing i can do about it. telling them "my contract says i'll be paid in 30 days" doesn't mean a thing to them. they don't care.
posted by misanthropicsarah at 10:34 PM on October 16, 2011

If the amount of money in question is small enough, small claims court works great. And if it's large, your contract should specifically state that any collection expenses are added to the client's bill, such that they're paying your attorney, not you. Also, you have to build in penalties and interest on overdue balances.

And that one client who really won't pay you until they're several months late? You make sure your next contract specifies effing ginormous late fees or, even better, you refuse to do any work for them without prepayment (or just don't work for them at all).
posted by wierdo at 10:45 PM on October 16, 2011 [1 favorite]

misanthropicsarah: "just because you and your client have a contract, doesn't mean they'll actually pay you on time."

No, a contract isn't some magical piece of paper that makes your client give you money. What it is, is literally the very least that you need to do if you're going to sell your services to other people. All the contract does is define the terms of your relationship, and consequences for violating those terms. It's up to you to pursue those consequences.

If you're not willing to do that, then being your own business is probably not something you should do.
posted by danny the boy at 11:22 PM on October 16, 2011 [2 favorites]

Yes, really. 5 years ago they would have had only 300 responses, and all of them shit. Now they're getting highly skilled, highly talented designers fighting for these jobs.

Where is this magical place where I can get good design for $10/hour?
posted by humanfont at 4:55 AM on October 17, 2011

just because you and your client have a contract, doesn't mean they'll actually pay you on time.

Of course not. As has been observed, contracts are neither magical techniques for guaranteeing performance nor are they even self-enforcing.

I think the real value of this presentation is less the content per se than the underlying implication that being self-employed or running a business is actually kind of a pain the ass. This:

there are a lot of small business owners out there who really should not be running businesses

...is spot on. I know a number of people who have started their own businesses. Most of them seemed to be operating under the pleasant delusion that it was simply a matter of doing good work and getting paid for it, on time, by clients who never complained, and once the money was in hand, all of that money could be treated as salary.

The reason a lot of people think that way is because "regular" jobs, i.e. where you work for an employer, kind of do work that way. You show up to work, you do you job, and every two weeks there is magically more money in your checking account. This disguises the fact that someone is dealing with the hassle of making sure the business has enough clients to stay in business and that those clients pay on time, but also that the rent is paid, the lights stay on, employee benefits are handled, and all of the logistical backend support that goes into keeping a business running, to say nothing of navigating the regulatory maze. Which is why most regular jobs don't pay all that well, all things considered. Even if you do happen to be in a revenue center for the business, there are other people whose job it is to ensure that you can do your job. So even though I bill out at X an hour, I get paid the equivalent of some fraction of that. Gotta pay the secretary, etc.

As a freelancer, you have to do all of that yourself. You are the sales, marketing, finance, production, R&D, HR, executive departments, all in one. And acting like you aren't is just going to get you in trouble. So the reason you use contracts isn't so that you're guaranteed that you get paid, but because it's the bare-minimum level of professionalism required to establish that you aren't just flying by the seat of your pants. And that's why you can charge more, i.e. people will pay extra for the knowledge that they're dealing with someone who is not only technically proficient but also professionally proficient. I don't really care how good your work is: if you can't give me a decent contract and turn your work in on time with a proper invoice, and have no contingency plan for the unexpected, I'll take my business to someone who will.
posted by valkyryn at 5:16 AM on October 17, 2011 [3 favorites]

Contracts don't mean a whole lot when it comes to taking a client to court. In some cases, it takes more court money than it's worth getting paid.
posted by stormpooper at 6:22 AM on October 17, 2011

Contracts don't mean a whole lot when it comes to taking a client to court.

I'm sorry, but this is manifestly, unbelievably false. Suing someone without a contract is almost always worse than suing someone with a contract.

In some cases, it takes more court money than it's worth getting paid.

That's as may be. But the fact that the cost structure is such that suing isn't worth it* does not change the fact that contracts definitely matter in determining the legal outcome of a case.

*Which is why small claims court was invented. Look into it.
posted by valkyryn at 6:34 AM on October 17, 2011 [4 favorites]

Relevant to this discussion, for those who haven't seen it before (anyone?): Clients from Hell. Always good for a chuckle.
posted by adamrice at 1:14 PM on October 16
YMMV. For me, the first page or so is good for a few chuckles. After that, it's just a spiral into soul-crushing depression.
posted by McCoy Pauley at 7:31 AM on October 17, 2011 [1 favorite]

So when I went to Craigslist with a posting I found that the designers were not particularly talented, that or the estimates were sandbagged to the point that they were trying to bill a 40 hours on a 8 hour job.
posted by humanfont at 7:52 AM on October 17, 2011

In some cases, it takes more court money than it's worth getting paid.

Which is why your contract should state that there are penalties for late payment (mine says payment is Net 30 and 1-5% penalty (depends on client) per day late) and that the client will pay for all collections costs (including the time it took to collect).

BTW...I've found that nothing helps payment along like an incentive to pay early. I generally have a 1 or 2% discount for payment in 15 days or less. Nothing a beancounter likes more than feeling like they've saved money.
posted by kjs3 at 9:51 AM on October 17, 2011

BTW...I've found that nothing helps payment along like an incentive to pay early. I generally have a 1 or 2% discount for payment in 15 days or less. Nothing a beancounter likes more than feeling like they've saved money.

This has helped our company a lot. Incentives for early payment (well, ON TIME payment as most of us would imagine it) is fundamentally indistinguishable from punishments for late payment, it's just a matter of how you word it.
posted by verb at 10:07 AM on October 17, 2011

coming back to point out that everything valkyryn has said above in thread is absolutely true and correct.

If you are a small businessman, consultant or even if you are moonlighting as a wedding photographer or whatever, not only do you owe it to yourself to learn the basics of negotiating and administering simple contracts, but there are also quite a few basic, affordable classes out there made available from places like community colleges and libraries (hell even our local rec center holds them) that are specifically designed for the casual entrepreneur to learn how to write, negotiate and administer contracts. Even if you don't have something like Quicken or some other small business software already, you can still find pretty much any relevant contract templates you'll need on the interwebs, and most US state websites provide these free of charge.
posted by lonefrontranger at 12:46 PM on October 17, 2011

This is a matter of statistics, not a matter of character. Doing business on a handshake means you will, inevitably, get stiffed.

Well, you're wrong. After 33 years in business, I have NEVER been stiffed on a handshake.
posted by Sparkticus at 1:17 PM on October 17, 2011

Well, you're wrong. After 33 years in business, I have NEVER been stiffed on a handshake.

I would love to visit the planet you live on, but since the rest of us live in the real world, we'll continue to deal with the real implications of doing business.
posted by kjs3 at 10:06 PM on October 24, 2011 [2 favorites]