On the occasion of Halloween week, let me impart a bit of horror with a story about a mistake I made on my very first venture working for myself.

My maiden voyage was a client who I had also worked with at my full time employer. She was interested in some (cheap) design work that was outside of the scope of services my now previous employer offered. 

I was going to design the pages of a textbook.

Why?

This was miles away from the work I knew how to do. On another planet. Not my circus.

But I said yes anyway because, as all new entrepreneurs do, I was desperate to make sure I could pay the bills.

The Terms of the Contract

I wrote up a contract that said I’d get:

20% of the total cost upon delivery of the mockup of a dozen key pages. 

50% at the delivery of the full first draft. 

30% at the conclusion of the work.

We sign, I break open the champagne.

The Reality of the Contract

The next morning I crack open my laptop and get to work.

Within two weeks I had a dozen pages I was happy with and shipped those over to the client.

She took about a week and then got back to me with:

“Thanks – these look good. We’ve got it from here.”

Me: “I’m so glad you love the layout. I’ll get started on the full draft.”

Her: “Sorry that wasn’t clear. We don’t need you to make the full draft. We’ve found a grad student who will work from the models you set up and create the rest of the book.”

What would you do here?

The Terms of the Contract, Revisited

I scrambled to the contract. Yep, there WAS a cancellation clause! Got you!

Oh wait. 

The cancellation clause said that either party could cancel with a 10-day notice and that the contractor (me) would be compensated for the work completed to date. (This is actually very boilerplate – contracts are not designed to protect the contractor.)

Which means, yep, I was stuck with 20% of the compensation I was counting on (all those bills to pay) even though developing that 20% took the vast majority of the intellectual work. 

The client was completely within the bounds of the contract, though both the contract and the client’s use of it (I can now see) were ethically questionable. 

What would you do here?

I cried. I got mad. I wallowed in the injustice for a day and then I set about finding more work.

And I embroidered this experience into my mentality. Lesson fucking learned.

Ok, friend, here’s what you can do to keep yourself out of this mess in the future.

1. Negotiate better cancellation terms. What could it say? I don’t even know. Because you don’t want to get in a rare situation where YOU need to cancel but can’t because you wrote out a clause that’s too restrictive. I’m actually not sure there’s much you can do here, but maybe you’ll think of something creative and contract lawyers can help.
2. Reallocate the percentages and due dates. I’d ask for a percent of the contract at signing (pay bills). I’d ask for a much higher percentage due at the mockups. My allocations would look something like this:
   1. 15% due at signing
   2. 60% due at mockups
   3. 15% due at first full draft
   4. 10% due at final full draft

This way, you get the bulk of the payment when you deliver the bulk of the intellectual property. If your client ever pulls what happened to me and ditches you upon receipt of the mockups, you’re only out 25% (which would still suck, but not as much). 

Your pay isn’t connected to your time. It’s connected to your intellectual property.

Want a postlude? It became clear to me that this client honestly hadn’t thought she’d done anything wrong or morally questionable. Because a year later she reached out and asked me to work on another project. 

NOPE!