Robert Solomon is the author of the widely read and well-respected book, The Art of Client Service. He is an executive coach and founder of Solomon Strategic, a marketing consulting firm that helps small business owners and freelancers. You can reach him at firstname.lastname@example.org.
Years ago, well before I left my job in advertising to become an independent consultant, I worked for a Boston-based marketing agency some of you might know as Digitas, where I oversaw a number of client accounts.
One day, for reasons too tedious to explain here, I received a letter from the lead contact at one of my largest clients, telling me our agency was fired, effective immediately.
After getting over the shock of the news – this wasn’t expected, at least not by me – I realized we were exposed not only in terms of the three months of severance fee we were owed, but also for production costs for which we would be liable were the client to stiff us.
Instead of calling our client and begging for another chance – hopeless, I thought -- I called our media and production people and asked them to freeze all work in progress, and to physically recover any assets – copy, artwork, mechanicals -- we had created.
Once my colleagues confirmed we were in possession of the work we created, I picked up the phone.
“Nancy (my client), this is Robert; I received your letter. I am very sorry to learn that you want to part ways, but given we are no longer working together, I have asked my media people to freeze all the advertising we placed, and asked my production colleagues to retrieve any work we did on your behalf. I know there are deadlines you want us to meet and there are commitments to be honored, but I assume this is what you would have wanted me to do.”
Nancy knew immediately where I was heading with this. “Do you mean our advertising will not run?” she asked.
“That’s right,” I replied.
There was arctic silence on the other end of the line. I waited.
Finally, Nancy asked, her voice quiet, “What do we need to do to get things started again?”
“I need you to wire transfer the money we are due for production and media, along with three months of fee payment, which we are owed due to termination. Once I receive payment, I will release all outstanding materials to you, or if you’ve selected a new agency to replace us, to them.”
Before she hung up the phone, Nancy’s answer was reduced to one word; that word was, “Fine.”
The client sent a check; I learned a lesson about leverage: I had it, she didn’t, which explains why we were paid.
In the years since, working in my Solomon Strategic consulting practice, I have abided by this principle. When a client greenlights a project, one of the first things I do is email an invoice, usually with a “due on receipt” notation. I make sure I receive payment while work is still in progress; to ensure I maintain the leverage I need, I do not release any material I am creating until I have a check in hand. Unspoken, but all too apparent, is the point that, if my client wants my work, they need to pay me for it first.
To make sure there are no surprises, I write payment terms – often overlooked, by the way, by many freelancers I know -- into every letter of proposal I create, using language like this:
“I will follow-up by phone later this week, to see if you have any questions or concerns I can address. But if you are comfortable with what I’ve proposed here, you can authorize me to being work with a simple, ‘let’s proceed’ email. I will then issue an invoice and expect payment in advance, by (fill in the date).”
With coaching clients, my rules are even stricter: I expect and receive payment upfront. The same is true with workshops I conduct: payment in advance; I will not get on a plane without check in hand.
Are there exceptions to this rule? Of course. If I am dealing with a longstanding client, a friend, or both, I will invoice accordingly and trust I will receive payment on a more relaxed schedule. But for everyone else, the rule applies.
There is no glory in getting paid, and most freelancers would prefer a root canal without anesthesia rather than telling a client they need their fee prior to beginning work, or soon thereafter, well before they sacrifice whatever leverage they have to secure payment. Sure, all of us worry that asking for money upfront might cause a client to take their business elsewhere. But I, for one, would prefer to lose an assignment upfront, rather than win one where I have to chase money after-the-fact.
The next time you are thinking about getting paid, keep in mind these three things:
- Leverage matters, and you need to use it to advantage, crafting language that is unambiguously clear but unfailingly diplomatic, so that you minimize the risk of alienating your clients.
- Timing is everything; you need to make known, in writing, what your expectations are at the outset of an assignment.
- Make exceptions judiciously, based not only on a previous track record, but also on your level of trust.
I entered this business because I love advertising and want to help my clients get better at it, not because I wanted to lie awake at night, worrying about getting paid. Whatever business you’re in, I’m fairly certain you share my view that serving as a banker or collection agency to your clients is the last thing on your list of aspirations.
The famed advertising executive Bill Bernbach is reported to have said, “You are worth what other people are willing to pay you.” If you are worth the fee you are quoting, if your clients respect your work and trust you to deliver what you say you will deliver, they will find a way to meet your terms. You and your business will be better for it, even if it means forgoing the occasional job you are better off not having.
“Easy in theory, hard in practice,” you might argue, “you’re not the one looking for the next assignment.” To this I can only say I’ve been running my coaching and consulting practice for more than 15 years, collecting tens of thousands of dollars in fees, by following that simple rule of leverage.
Did I lose an occasional gig as a result? No doubt. Was I better off?
I’d say so.