This is a guest post by Ann Hawkins following the presentation by Lisa Garwood at CamCreative on 30th November 2011, F*ck You, Pay Me! How to run a creative business and actually get paid.

Thanks to everyone who contributed to this lively and useful discussion – please add your comments and observations, especially if you have ideas on how we can develop this discussion to help avoid this awful situation from becoming too prevalent.

From time to time, most businesses suffer from clients who decide not to pay but it seems that the creative industries suffer more than most in this respect.

Is it because designs are subjective and so ‘not liking’ is seen as a reason not to pay for it?

Is it because once an idea has been born people think they can copy it and so needn’t pay for it?

Is it because creative folk get so excited by the creative opportunities that they forget about good business practice?

There is no doubt that all of these come into play at times as well as these other reasons for non-payment that people have experienced:

  • The client changes the people the designer is dealing with
  • The goals of the original project change
  • The client brings in another designer
  • The client runs out of money
  • The client’s expectations or demands become excessive.

The discussion at CamCreative focused on two aspects of the problem.

The first is to put in place measures that are likely to prevent non-payment from happening and the second is how to deal with the situation once it has happened.

Prevention

Two things help to prevent non-payment: both help to clarify and manage expectations. We’re using design as an example here but these ideas apply to anyone in the creative industries:

1) Design Brief

A thorough and articulate design brief is a critical part of the design process. It should help to develop trust and understanding between the client and designer and serve as an essential point of reference for both parties.

Above all, the design brief ensures that important issues are considered and questioned before the designer starts work and helps to manage expectations as the job progresses.

If the requirements of a job stray too far from the original brief, the contract (see below) should be terminated, invoking any kill fee that may be due, and a new brief and contract negotiated.

2) Contracts

Contracts exist to protect both parties. If a client says “You can trust us” explain that the contract is for their protection as much as yours.

Work should not start until the contract is agreed and signed. The more specific the contract the more likely it is to weed out the ‘tyre kickers’ who are not serious about entering into a binding agreement.

Be very specific about money. Ask for a deposit for every new project, even with existing clients. Include stage payments at specific dates, not dependent on the client approving work, so that payments are not delayed for unspecified reasons. Front load the payments so that you are covered for the most labour intensive part of the project.

Expect to negotiate so that the terms are acceptable to you as well as the client but don’t back down on the really important issues, for example:

  • IP transfers are made only upon receipt of FULL payment
  • Include a ‘kill fee’ that applies if the client delays the start of a project, delays any of the stage payments that have been agreed or cancels the project after work has started
  • Clearly define liability – who, for what and how much.

If a client brings in a lawyer to negotiate contracts at any point, it is best to get your own legal representation. Adrian Chaffey of Epitome Law has helped several CamCreative members to prepare and enforce contracts.

Recovery of debts

If, despite all your best efforts, you still end up being owed money, HM Courts and Tribunals Service offer an online service which avoids much of the expense of taking someone to court, called Money Claim Online

Get help and support to invoke interest on unpaid invoices from Pay On Time, and you can also follow them on Facebook and Twitter.

Having doubts?

The liveliest part of our discussion was around how much a client or potential client can expect for free.

There is still a lot of expectation that creative people will be happy to compete for work by submitting designs on ‘spec’, despite that fact that this practice is discouraged and derided by most designers as being exploitative. To see debates and discussions on this just Google ‘spec work’.

Most designers are able to demonstrate their ability, talent and suitability for a job through their portfolio without the need to do spec work but inexperienced designers are still encouraged to work for free by clients promising ‘exposure’ and testimonials.

If you are in any doubt about your rights to be paid, here are three resources that might help:

What’s next? 

Lisa and I are keen to continue and develop this discussion so that non-payment issues are brought into the open in the way that spec work has been and to ensure that creative folk get help and support in fighting for their right to be paid.

We’d love to hear your thoughts, ideas, comments and contributions in the comments section below …..

Thanks again to everyone who has contributed so far.