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Good Contracts Make Good Clients
by Glen Emerson Morris
This January marks the tenth anniversary of the Advertising &
Marketing Review Website, and to mark the occasion this column is
about how the Website was initially funded. Its a cautionary
tale about the necessity of having a good contract whenever doing
While working at Apple In 1995, I ran into
someone looking for a writer to adapt a lecture series on multimedia
production to a book format. Since I had recently worked at Radius
as Beta Site Coordinator introducing a variety of breakthrough
multimedia products to Hollywood and Madison Avenue, the job sounded
I submitted a detailed proposal asking for $8,000
to provide a 75,000 word book with screen shots but no line art. The
client countered with a price of $5000 for 50,000 words and no line
art. The contract specified that 25% to 50% of the total words
would be supplied by client in the form of a transcript of the
lectures. The work would be delivered in four installments, each two
weeks apart. According to the contract he had two weeks from
delivery to accept or reject each milestone delivery.
the price was adequate, the payment schedule was highly suspicious.
Rather than equal payments for the four milestones, the client
insisted on a balloon payment bonus for making the last
milestone on time. This effectively meant that after I had handed
over all four installments, the client would have only paid me half
of the total. The client justified this by saying the publisher had
given him a deadline shortly after the fourth milestone was due and
that he would loose royalty points if the manuscript was delivered
late. Maybe this was true, but I suspected there was another reason
for the payment structure.
Generally, when a client holds
off a significant percentage of the payment until after most of the
contracted work has been turned in its because theyre
planning to demand more than agreed to for the final payment, and
sometimes a lot more. The large unpaid balance gives them a lot of
leverage, and they will use it. Their hope is that the contractor
will be focused on getting the total amount promised, and completely
loose sight of how much work they are being asked to do to collect
it. In many cases, that strategy works.
A good counter-strategy in those situations is to give the client the
benefit of the doubt, but to be ready and willing to quit the minute
the demands significantly exceed the contract. Given that the first
three milestones paid reasonably well for the work required, I set
my goal on completing them successfully. If he wasn't honest, it was in my best interest
to put off any confrontations with the client until after I received
payment for the third milestone. With luck, the terms for the fourth milestone would not be changed and remain easy and profitable to meet.
I noted that the client made it a point to tell me that he was good friends
with the manager of the project I was working on. He was either being friendly, or was planning to use that later as pressure.
I became a bit concerned when I saw that the transcript provided was a lot rougher than I expected, but
since at least 25% of it could be used, the writing effort required still
wouldnt be too bad.
The first milestone came and
went with only one problem. The client had requested that the first
milestone include a lengthy chapter on a multimedia kiosk at a major
university. When I turned it in he informed me that he had not been
able to secure rights from the university and the entire chapter
would have to be discarded, meaning it would not count towards the
50,000 word quota I was obligated to provide. I was annoyed about
this but did not want a confrontation at that point.
When I turned in the second milestone the client made two comments that
that confirmed my suspicions about him. First, he said that he had
not had time to read the first milestone I turned in, though he said
he was sure that it was all right. Second, he told me that he had
been in touch with the publisher and the publisher said they needed
"more, MORE." I didn't ask him if that meant more than the
50,000 words I was contracted to supply. I knew the answer. I said I
understood, picked up my check and left.
A few days later I called the client and suggested that I change the sequence of
chapters as defined in the contract so the third milestone would be
an extensive glossary instead of about digital video. I said it
would give me more time to research the remaining chapters, which
was quite correct since it would have allowed me more time to
interview key engineers at Apple and Radius. Since I had planed on
paying for the interviews, I wanted it to be at a point where I knew I was certain I would make enough to cover the expense.
The client agreed, largely because I hadn't
given any indication I was on to him.
When I turned in the third milestone, the client again told me that he had still not yet
read anything I had turned in. Again, he repeated his request for
"more." Again, I picked up my check and left.
I had estimated that if the client were going to try to pull
something, he would do it in the last week before the fourth
milestone was due. He was right on schedule. In the middle of that
week I got a call from him at work. He sounded very angry, arguing
that he had finally read the three previous milestones and was
rejecting all of them. He demanded to see me immediately.
When I met him, he handed me a copy of the chapters I had turned in,
loaded with editing marks and comments and he launched into a tirade
about the quality of my work. As he went on, I examined the marked
up chapters and noticed that nearly all the critical comments on the pages
involved the text I used that he had provided. Chapters and sections
I had written from scratch had few, if any, critical comments. In
effect, he was rejecting the 25% of the text he was contractually
obligated to provide.
This was a classic maneuver on the part of my client. His emotionalism was calculated to keep my mind on anything but the terms of the contract. Anyone in any kind of business, whether it's advertising, writing or palm reading, either has, or will eventually, face this situation, and probably many times. It's when your client is the most emotional that you have to be the most detached. If you can't be detached and keep your mind on the contract terms, you need to find another line of work.
The client expected me to crater under his
tirade, I didnt, and at one point for a second he looked lost
and confused. He was obviously used to this technique working. Then
he continued, telling me what he expected from me to make it right.
What he now wanted was pretty much what I had specified in my $8,000
bid; a much longer book, completely original, and with line art. He
was expecting me to provide much more than I agreed to make up for
the bad job I had done on the first three milestones. He
was profoundly optimistic, though he had yet to realize it.
He strongly suggested that I take time off from my job at Apple to
make time for the revisions and additional material. He may have
been setting up this demand when he told me he was friends with the
manager of the project I was working on. However, it seemed to me
that his manager friend would rather have me working on the project
I was supposed to be working on than taking time off to work on an
unrelated project for a fried of his. From a business perspective,
taking time off from a well paying job to work on something whose
rewards were dubious just didnt make sense.
The client demanded that I provide the additional material he requested
and threatened to sue me if I didnt. It was an empty threat,
and he knew it. He couldnt sue me for failing to provide
content I had not agreed to provide in the first place. In addition,
he was the one breaking the contract, and in at least four ways. By
default, he had accepted the first two milestones when he failed to
reject them within the two week period the contract specified. His
only stated reason for rejecting the third milestone was that the
glossary wasn't long enough, even though it more than met the word
count required in the contract. He was also failing to provide the
minimum 25% of the text for the book, and according to the contract
he couldn't require line art either.
I quit the book
project at that point. Once you know you have a dishonest client
it's best the part company as soon as possible. Suing him to force
him to live up to the contract wouldn't have been worth the effort.
Besides, I had earned a reasonable profit for the work I did, more
than enough to buy an Apple PowerPC. In addition, I acquired
thousands of dollars worth of software from companies whose products
I reviewed in the book. It was all the software I would need to
launch a Website.
In the end, my client got what he paid
for, though it was not all he wanted. He is in a small way
commemorated by the A&M Review Website, in that the initials of
the magazine spell his first name, Amr. Out of good taste, I have
never brought this to his attention.
The lesson learned
from this project is simple. Good contracts make good clients, even
if they dont want to be. Never work for a client without a
detailed contract specifying exactly what your obligations to the
client are, and how much you will be paid for them. Its the
nature of business that the client will try to get all the work he
can from you, whether its in the contract or not. Only a
contract can protect you unreasonable demands, and it will only
protect you if youre willing to use it.
Morris has worked as a technology consultant for Network Associates,
Yahoo!, Ariba, WebMD, Inktomi, Adobe, Apple and Radius, and is the
developer of the Advertising & Marketing Review Data CD.
Copyright © 1994 - 2010 by Glen Emerson Morris
All Rights Reserved
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