Many freelancers are squirrely about asking for money. You build a personal relationship with a client who genuinely values your creative product, and it seems crass to go back to that person with a bill and say “I hope that you’ll pay this quickly because I have nothing but Pop-Tarts® in my pantry”. Plus appearing too hungry seems non-professional—if you were a pro you’d have the financial details worked out or would simply be above them.
The solution to this one is simple: you shouldn’t be submitting bills to your primary client in the first place. Invoices should go direct to the Accounts Payable Department which is where they’ll end up anyway after your client signs off on them. Your client has other things to do than process paperwork; the AP department doesn’t, because that’s their job. And if they get a bill they don’t recognize they’ll contact you, or their marketing department, rather than simply ignoring it. (Thanks for my friend and fellow freelancer John Wurtmann for reminding me of this strategy.)
Of course a few freelancers—very few—don’t have this problem because they insist on payment in advance. I think that’s an unrealistic expectation and you may lose a project you want because the company simply can’t cut a check in time to meet the schedule. My approach, with a new client, is to ask for 1/3 of my estimate up front, 1/3 on presentation of first round copy, and 1/3 on approval of final copy. That seems to spread risk appropriately between me and them and I’ve never had a client say it was unreasonable.
Kill fees: this is a partial payment a client agrees to give you if the work is unsatisfactory or if their needs change and the product gets stopped in its tracks. A typical arrangement is that the client will agree to pay 25% of the total, regardless of the point at which the project is stopped. A few big publishers insist on kill fees but I try to stay away from them. A stipulated kill fee introduces the scenario of possible failure into the relationship. The 1/3-1/3-1/3 arrangement I mention above protects both of us just fine.
Contracts: if you have a contract you need legal knowledge to make sure it is valid and air-tight and that means, to paraphrase an old saw, the copywriter who writes his or her own contract (or cut-and-pastes one out of a book) has a fool for a lawyer. I prefer to put as little as possible in writing. Definitely an email confirmation of project scope, schedule and price is a good idea. Beyond that I will draft a letter of agreement if the project calls for it either because it is a very large budget or (especially) a retainer arrangement. I deliberately use plain non-legalese language. I sign it when I send it and ask the client to sign a copy and return it; about 50% do.
If you are asked to sign a contract from your client, you can either show it to a lawyer (which means you are going to have to hike your fees significantly, to pay your lawyers) or make your best effort to understand it and question any sections you don’t agree with. The area that typically raises red flags for me is a non-compete clause; I can understand I can’t work for a competitor during the project, but that agreement should have a time limit. Also look at what they specify as payment arrangements and agree they are reasonable.
The big idea here is that a copy assignment is the creation and transfer of a product whose value cannot be objectively determined; if your client is out to trick you, most likely they will be successful or else you will both spend a fortune in legal fees.
Crooks, deadbeats and bankrupts: I’ve had very few bad experiences with payment in a 20-year freelance history. I once sued a client in small claims court and we settled for 50% of the total, at the expense of half a day of my time. Another client proved so difficult to deal with that I resigned the account without asking for pay. Another killed a very complex sweepstakes project many drafts in, initially said the work was off-target so he wouldn’t pay for it, finally agreed to a reasonable kill fee; I think the problem was some internal politics and he had to share the bleeding. I’ve had only one client who was an out-and-out crook who probably had no intention of paying from the get-go; I hired a national collection agency (the one you are thinking about) to go after him and they reported that the claim was “uncollectible”.
All the above problems amounted to a minuscule percentage of my total billing over the years—I would be surprised if it is 1%. If you retain a lawyer it’s probably going to cost you a lot more than that including writing and reviewing contracts and potential litigation. The sane alternative is to pick your clients carefully then work in good faith with the assumption it will be a satisfactory experience for both parties.
Having said that, I’ll close with two cautionary tales. The good: during the dot-com era I worked around the clock for one e-commerce company that wrote a $40,000 check for services rendered and went out of business the next day; miraculously the check was honored but I did not have a backup plan if it wasn’t. The bad and ugly: many freelancers I know worked for a large publisher of romance novels that suddenly went belly-up in the 1990s, not only leaving them stranded but putting an entire agency out of business.
The moral is that, as in poker or stock trading, you should never bet (in terms of uncollected receivables) more than you are prepared to lose.