Perfecting your freelance / consulting contract
If you are new to freelancing or consulting, it’s the classic question of which comes first, the chicken or the egg?
Specifically, if you are prospecting for your first freelance or consulting assignment, do you need a carefully crafted contract ready to go before you reach out to your first prospect?
It’s rare to see an expert who explicitly recommends having the perfect contract template on your computer all ready to fill in the blanks and send it out on the spot.
However, there are experts who instill such fear in us that we assume we need that contract. Otherwise, when you are offered an assignment that must be turned around in a reasonable timeframe, you won’t be able to get that essential contract signed and filed before you start the work, putting you out of the running right from the start. (It’s like you can’t send a prospect to your website if it’s not up; giving them a link to a website that may be up in a month simply doesn’t work.)
Anyone who reads the news, whether online or on paper, knows that modern society is litigious; people love to sue. Oh no, we think. At the first mistake, no matter how well intentioned we are, clients will sue us, just like the coffee lady who sued McDonald’s.
It’s easy to panic but hold on a minute. McDonald’s has much deeper pockets than any of us. An attorney is more open to taking a contingency case against McDonald’s than against us.
There probably is not much litigation against individual freelancers or consultants.
Here’s an unscientific experiment I conducted a few years ago. Back when I was on the board of a local freelancers organization, we were waited for a final member to show up so we could start our business meeting. I filled the empty time by asking if anyone present had ever been sued. The count was zero (among perhaps seven people).
If you want to start getting work quickly, you have to start prospecting quickly. This means putting preparatory work—including contract development—on a back burner.
Back burner doesn’t mean taking it off the stove entirely. Here’s how you start working on contract and agreement issues. Start a file, either by taking a manila folder, labeling it and placing in your file drawer or by creating an electronic file. Then add to the file over time by researching your industry for sample contracts. This includes asking colleagues, asking officers or administrators of professional organizations to which you belong, searching through books relevant to your practice, asking on Yahoo, LinkedIn and Facebook groups, Google searches, etc. And ask yourself what exposures worry you most. (For instance, when I write resumes, the client has final responsibility for proofreading and any other quality issues.)
As we get started, we are prone to think that the perfect contract prevents all problems. Not true. The integrity of the client is far more important than the contract . . . by far!
So here are three contract stop-gaps:
If you prospect among large clients, they will probably offer their own contract. You will either accept the contract or propose revisions to their contract. If all your clients are large, you may never have occasion to offer your own contract.
2. Structure the agreement so you get paid a significant percentage of the fee—or even the full amount—before you start. The very worst that can happen is that you miss out on the final payment rather than the full amount.
The speed with which a client sends the first installment says more about the client than any contract ever could. I’ve had clients overnight me a check for 10:30 a.m. arrival so I would start their project immediately. When people want you, it’s amazing how fast the bureaucracy can get things done.
3. Walk away. If your gut is telling you that a leak-proof contract is essential with this client, it’s better to turn down the assignment than to work till 2 a.m. at crafting the perfect agreement. There are far worse things than not having paying work. For instance, devoting lots of time to an assignment and then not getting paid for it.
Disclaimer: I’m not an attorney (obviously!). If you want solid legal advice, consult your attorney, OK?
Originally posted 6-8-09