Ask HN: How to deal with this freelance client?

Whether it is a consulting agency or freelancer, companies will often do a proposal process, sometimes with multiple providers at the same time, that enable them to harvest ideas and gain clarity in their own thinking about a project. They then either pick one of the providers or just turn around and do it in house and they got a bit of free consulting to get them started.

Is this ethical? Probably not, at least if the company is doing this deliberately, knowing all the while that they have no intention of hiring an outside firm.

I would reach out to him again with an email about getting started. You need to get a clear yes or no from him and put together a contract if the answer is yes. If the answer is no, chalk it up as a learning experience. Don't give away too many hours before the contract is signed.

It is not uncommon for a agency to put in 40 to 80 total working hours between sales calls, preparation, developing the proposal, and sometimes flying out to meet key executives at the client firm. Sometimes you still don't get the business, but other times you do. Now this kind of commitment of time and resources assumes that the minimum size project is something on the order of $50K and that once the client is on board there are possibilities for repeat projects of similar or larger size that don't require all the free prep and proposal development.

I guess what I am saying is that this kind of thing is not unusual and I wouldn't waste more time and energy trying to make it "right." Just move on.

First, distinguish between clients and potential clients. Clients are people who are paying, potential clients are people who might or might not.

Work only for clients. Make this happen by requiring a retainer to be applied against final invoice. This also means that you have set a rate and terms and put it in writing...if you're going to work for free work for yourself at drafting a contract.

Requiring payment filters out people who weren't planning to pay and it filters out many people with unrealistic expectations in regard to your rates. These are the people you don't want as clients.

Retainer, not such a bad idea. After getting stiffed on a short project that went nowhere, I should start using that one.

Recently, I did a couple of hours of work for a client, WITH A WRITTEN AGREEMENT, and didn't get paid. It isn't worth the hassle to sue and collect for a couple hours of work. So, I wrote the experience off as a loss and moved on.

My rules now:

1. If you want me to write a specification or project plan for you, I expect to get paid for it. If you want me to formally review your wireframes, I expect to get paid.

2. I'm willing to risk a couple hours of work to find out if a client is a deadbeat or not. If it reaches a certain limit, no more work until I get paid.

Basically, you did the work of writing a specification for free (which can be harder than implementation), and now he's shopping around for someone cheaper to implement it. That's why I'll never write a formal specification for free.

If the client is too cheap to pay me for spending a day or two helping him write a specification, then there are going to be other problems later.

This is good advice. I've been freelancing for 7 years. When you're talking with potential clients, it's reasonable to spend an hour or so talking about the project requirements and the client's needs and expectations, not to mention discussing your own background experience, to see if it's a good fit. I might then spend another hour or two looking at the client's specs and putting together an estimate.

But I don't do unpaid work for them. If they don't yet have a spec and are still exploring options, I let them know that one service I provide is consulting on a strategy and helping write a spec, creating wireframes, etc. They can hire me hourly to do that, and then decide later if they want to hire me to build it out.

Now, when you start bidding on much larger projects, you may spend more time reviewing specs. And you'll have to decide whether you want to get involved in the RFP process that some clients require. I typically opt out of those because they do require lots of unpaid work upfront. (I saw one RFP recently that wanted design mockups; no thanks.) And sometimes it seems as if clients have already chosen their vendor but need to do the RFP paperwork to make their decision seem legit.

Another rule for a small freelancer: Bill hourly. Never accept a fixed-bid contract. These small clients will withhold payment until every last detail meets their desires. Plus, it's NEVER a good enough specification. Also, most clients will change their mind about they want when they start seeing results.

Suppose you take a fixed-bid contract that you expect to take a month. You do your month of work and deliver it to the client. Now the client asks for changes X, Y, and Z, and says they aren't paying you until it's done. Now your options are (1) Argue about whether that was covered by the original specification, which does no good even if you're right because they're refusing to pay. (2) Follow the sunk cost fallacy and do extra work for free, hoping to get paid for the work you already did. (3) Walk away, and don't get paid for the work you already did. Also, if there was a deposit, now the client may try to sue you! (4) Sue to collect, but they know that you, as a small freelancer, don't have the resources to lawyer up and sue. Even if you hire a lawyer to write a tight freelance contract, they may refuse to sign it or attempt to negotiate it, and the lawyer fees are more than your revenue.

For example, at my last job, my employer hired a freelancer (not me) to do a WordPress site. Even though the site was done, he refused to pay, because "his business was having cashflow problems". I pointed out "Hey! The guy did the work! Why aren't you paying him? It's not his fault that you're having financial problems!" He did, several months later, pay. Then, the guy put a logic bomb in the site that I had to remove. (Owner: "WAAH! My site was hacked! Fix it! I'll pay you extra if you fix it now!" [I was not there that day.] I fixed it, no bonus was paid.)

That's an interesting take on the reason to bill hourly, and I know a lot of developers who do that. Personally I've switched to mainly doing fixed-bid contracts.

Rather than selling my time, a fixed-bid contract allows me to sell my expertise -- and that often is more lucrative. For example, a client may need a solution to putting hundreds of documents online and making them searchable. That may only be 40 hours of work, but it's a problem that has been costing the client tens of thousands of dollars in lost productivity each year. As an expert, I can sell them a solution to their problem in a way that saves them money and is still profitable for me.

Beyond that, a well-written fixed bid contract lets everyone know exactly what the costs and expectations are, and what the schedule is. No more having projects drag on and conflicting with other projects I need to be focusing on when we all know that there's a set deadline for the delivery of a specific solution.

Of course, doing this successfully requires knowing what questions to ask to get a detailed spec, understanding how long it'll take you to really do something, and anticipating the gray areas.

I also like to build in "flex time" into fixed-bid contracts. For instance, I might specify that the contract includes "20 hours of revisions" to the requirements once the client has had a chance to review the prototype. I'll price this into the estimate. This way the client knows they'll have a chance to make changes, but they also know there's a limit after which the project cost increases.

The problem with fixed-bid is that the client almost never has a decent specification. If I write the spec for free, I know he'll then just shop the spec around on freelance sites, and I wasted my time. They always get insulted when I say they should pay me for 1-3 days to help the write the specification. One guy expected me to give an estimate without telling me any of the details first.

I noticed that small businesses who want fixed-bid contracts tend to be cheapskates and they're the type of person who'll haggle every little detail and look for an excuse to refuse to pay.

I'd rather target the higher end of the market than the bottom of the barrel. Also, the work I prefer tends to have greater complexity than just churning out a simple site quickly, making fixed-bid less sensible.

Fsk - do you think this is what happened here to me? "If I write the spec for free, I know he'll then just shop the spec around on freelance sites, and I wasted my time"

Probably yes. You learned a valuable lesson.

I don't know the details, so I can't be 100% sure.

From your description, he handed your spec to another employee, and now that employee is trying to implement the spec YOU WROTE FOR FREE.

I have also experienced the problematic client you describe. The client had neverending revisions. He could never present me with a final list, even after all items in the contract were complete. He then refused to pay, unless I added additional features not included in the contract. Even after adding some of these, he was never satisfied. He made a long list of false claims against me and threatened to sue unless I added more features. After this, I immediately halted work and (successfully) pursued the rest of the money in court.

My conclusion is that fixed-price bids are bad only if there is a lot of risk -- in this case, the bid amount was far lower than it should have been, the client was underfunded, etc.

Nowadays, I recommend making fixed-price bids that are large overestimates. I am taking a risk in making a fixed bid, and in return the client gets the surety of a fixed amount. If my fixed bid is supposed to literally be my average expected time times my hourly rate, then there is a 50/50 chance (or likely more depending on the client) I will lose money on the deal!

Personally, I'd just suck it up and move on. And if the guy comes back later, I'd politely decline to do any more - the way he handled you clearly isn't how you (reasonably) expected to be treated, and those early interactions with clients are almost always an accurate forecast of how any working relationship would continue.

So, walk/move on and don't give yourself a hard time about it. Yep, you did some work for someone who seems to have stiffed you. It happens, but don't worry too much about it -- it's all part of the learning curve.

PS: For an admittedly biased book recommendation, http://www.leanpub.com/freelancedeveloperbook

I agree with the suck it up and move on. Your time lost isn't substantial. At least you learned about his character early on.

If you would still consider doing business with him on this project. A. Get paid up front for further work or at least make sure he pays for what you already did before you doing anything else. B. Quote him higher than you otherwise would quote.

Thank you both for your response.

Yeah, I mentioned 25% would need to be paid upfront before I begin coding.

I've been freelancing off and on for about 5 years, and had a horrible time with this sort of thing early on. What I eventually learned was to manage expectations right at the outset. Establish that if you want to get paid for research, phone consults, whatever, that your client is on the clock. Often your first freelance clients won't have worked with a freelancer before, and may never again, so they are as unversed in this, probably more so, than you are.

With a recent client, I knew I was going to need an hour or so just to get caught up with their modifications to the platform (ecommerce ish) so I stated that up front, and actually asked for that hour no questions asked and then would provide a quote after I understood everything. They were more than happy to provide that and it gave me the room I needed to provide a very accurate quote for the whole project.

For your current situation? What I have done with a non-paying customer in the past is to walk away, but shoot a message regarding the work I'd completed, stating explicitly that I would not be licensing any of it to them without payment. To be honest? I had no idea how to even follow up on that, or if it had any legal weight whatsoever. I just made something up in my frustration, but in the end I got about 50% of what I had been promised and wrote a reasonable sounding granting of license to my work. Your mileage will obviously vary, but hopefully this will at least provide another idea.

There's nothing you can do about it, or even if you could, it wouldn't be worth the time and money.

You've learned a valuable lesson here. If you're going to spend time performing research and drafting up a specification in the detail you have done make it clear to the client you will charge them for this work. Also, take an upfront payment in order to mitigate any risks such as your client defaulting on the final payment, at least you cut your losses to a minimum this way.

I would do this, but I knew this guy for a few years prior. Its not like a random person off elance or something

I recently had a problem with a client as well, and to assuage the headache of dealing with them, I took a half hour to re-watch Mike Monteiro's brilliant talk on the subject:

http://creativemornings.com/talks/mike-monteiro--2/1

Get used to it! Potential clients are often no-shows and fail to return calls because they found someone else ... even when their business seemed like a sure thing.

I use this as a barometer -- if a prospective client does not respect my time/work, then he will likely be problematic as a client.

Jpd750- I have a startup I would really like to talk to you about. Please shoot me an email at whostherellc@gmail.com.

I'm the founder and looking for some help in building out this product

Sent

Solution: stop freelancing and build a product.