There comes a time when it happens to the best of us, and it can happen for different reasons. A fumble in the client’s accounting department that takes weeks to sort out, a bankrupt organization or business, or you found the wrong client. It’s a hard pill to swallow. Worse is when you have to pay a subcontractor with your own money because the client didn’t pay.
This happened to a colleague recently. His situation falls into the third category, but my guess is, the wrong client doesn’t think of themselves as such. And for good reason. Problems in business relationships are rarely about business, but we have to pretend they are. In other words, the human condition is at work—fear, confusion, ambivalence, lack of clarity, insecurity, guilt, ignorance, shame, to name a few. As soon as one of these conditions sets in, it is hard to solve the problem by reviewing agreements—however clear and in writing they are. A creative person managing a project might have explained the entire process. But there can still be assumptions made on both sides that weren’t communicated. A project gone awry does not mean it wasn’t well planned. Stuff happens. Visit AIGA’s Design & Business section of their website for good information on business practice for creative professionals.
A challenging client might trigger a gut-level reaction early on. But we ignore it for the multitude of reasons we ignore signs and signals. Maybe the client suddenly became worried about spending money or they lacked a clear vision (and embarked on a project before having clarity). There’s nothing like getting any ball rolling to highlight uncertainties! Hope is a wonderful thing, but not if it prevents us—client or creative person—from speaking up. This is not to excuse bad behavior, only to explain it. There is no choice but to take responsibility.
This post is not about all the steps to take to avoid nonpayment (future posts). It’s about what to do next if a project is cancelled and/or the client just won’t pay. The course of action is not necessarily different from dealing with a flaky accounting department or a bankrupt company. But it does need a different kind of reflection. Note: this assumes you were clear about process, had an agreement, provided a written estimate with terms and developed a clear brief about the goals of the project.
• Clarify the client’s position. You may not get paid but there might be useful information to carry into your next project. The client’s reasoning—whether you agree or not—will determine your next step. Ask if there was something specific they did not understand about the process. If they were confused, was there a reason they didn’t speak up earlier? This shows you are eager to understand, and, at the same time, the client reflects on their part in the process. You may find out if they lack funds (and are ashamed to admit it) or are choosing to withhold payment.
• Own your part. A martyr is a person who takes more than 100 percent of their share of the responsibility. A victim is one who takes less than 100 percent of their share. Note the emphasis on their share. Taking 100 percent of your share may only mean 30 percent of the total shared between parties. Put your part into perspective. Review it objectively. Mistakes are golden opportunities (you’re laughing now) to improve. If you were clear verbally but didn’t put something crucial in writing, note that, and do it differently next time.
• Send an invoice and follow up with a late one. It may not get paid but this is an important step because carrying out your normal business operations takes the personal edge off and gives you some confidence. Describe the work done. Attach the original agreement with terms, if one existed. Follow up, multiple times if necessary.
• Clarify your intellectual property rights. If you have provided tangible solutions, explain that their use is a violation of your copyright. Even if it was your intention to allow the client use of or alteration of the design work, that right is understood to be transferred upon receipt of final payment. This is important, not as a threat, but as an education. You help pave the way for future creative consultants by having educated a client. You won’t get a “thank you,” but you’re saving the client embarrassment or a possible law suit. Perhaps you’re not feeling generous, but the good will come back to you another way.
• Negotiate partial payment. Restate your case and appeal to the client’s sense of right and wrong. You might just settle on an amount you can both live with. It may happen that the amount is a reflection of each party’s responsibility for the situation going awry.
• Surrender attachment to getting paid. I’m not certain what amount of money would cause me to sue for nonpayment but I know that the psychological cost of a law suit, however justified, would be too high. Bad psychic mojo would wreak havoc on me. Sometimes there is power in walking away, but not until after you’ve done due diligence, of course.
There are true creeps but they are few and far between. I have friends who live to tell it. It is little comfort, but a nonpaying client is most likely feeling shame or fear, or both. You can always find more money. It will be harder for the client to bounce back from their actions. If this kind of thing has happened more than a couple of times, your instincts may be in need of a tune up. If you’re sure you were professional throughout, you are better off walking away (after taking the above steps). Gather up the pieces quickly and put that otherwise wasted energy into your next project.