We all know that written contracts are signed and agreed upon by clients and consultants to protect them legally and to spell out what is and isn¹t expected from both parties. (Handshake and verbal agreements are included in this, legally, as well. It is always best to have it in writing anyway.) But what happens when the contract is breached by one party?
Lately, and especially in this rough economy, there have been several incidents where a handful of my colleagues and I haven’t been paid in full and according to the contract for our work. (WARNING, small rant about to happen) In this day and age, I don¹t understand why people bother to sign contracts and then ignore them, sometimes on purpose. This is one of my biggest pet peeves. (Ok, I¹m done.) And while there are a few reasons (or are they excuses?) that these situations seem to have occurred: client dissatisfaction with results, no money coming in so it can’t go out, simply not wanting to pay, and claims that partnerships have been dissolved there is simply no reason that consultants shouldn¹t be paid for their time and efforts.
Are the above reasons valid enough for the client not to pay for work completed? I think maybe the “no money coming in so it can’t go out” is fairly valid for a few weeks or months. We’re all struggling to pay our bills right now. As for the client dissatisfaction with results, the client needs to be gently reminded that there are no guarantees with PR (unlike advertising), and that, as the consultant, you have given 100% effort on their behalf. But on all accounts, the consultants earned their paycheck and need to be paid for their work.
What to do?
There are a few options that consultants can exercise in order to get their payment, and I¹d like to remind readers that it¹s best to take the high road when you can:
- If the client is dissatisfied with their results, consultants can agree to monitor press queries (from sites like ProfNet, Buzz Factory, directly from journalists, and others) for an extra month or two to see if there are additional PR opportunities for the client to participate in. No additional money should be exchanged in this transaction and no new contract is required, just an agreement (preferably in writing) between the two parties and that the client will pay the consultant what is owed after the time has expired.
- If you are feeling very generous, you can offer to work for an additional month at no cost to see what other opportunities you can produce on your own.
- If the client can¹t afford to pay at the moment, you might want to work out a payment plan over a period of 3-6 months. I realize it¹s not ideal, but you¹ll get your money in chunks, as opposed to not getting it at all.
- You might want to consider having a lawyer write a letter to your client strongly urging them to pay within a certain amount of time in order to avoid further legal action One worst-case scenario for the other aforementioned reasons, there’s always small claims court. In NYC, you can file a claim with small claims for up to $5,000 for $20 or less. There is no excuse that a client doesn¹t want to pay or that the consultant shouldn’t be paid because the partnership has dissolved. One of the partners must be responsible for paying the bills.
- The other worst-case scenario, you can hire a collections agency to go after the client for you.
Things I¹ve heard others do that have been (clever, funny, and) effective but seem like bad business ideas are (think of these as what NOT to do):
- One colleague sat in a client¹s lobby for an entire month (with her laptop and cell phone so she could continue doing business) until the client paid her.
- Another colleague faxed her client every hour, on the hour for days until the client¹s ink and paper ran out and also drove the client crazy. The client relented and paid.
If other readers have resolved their conflicts in other ways, I¹d love to hear them so I can pass them on to my colleagues. As for me, my issue is now solved and I¹m so thankful I had a written contract.
Connect with me on these networks: Twitter, Facebook, LinkedIn, MyRagan, Mediapost, LadiesWhoLaunch, SavorTheSuccess, PROpenMic, PitchEngine, EntrepreneurConnect, Inc. BizNet, Variety¹s The Biz, MerchantCircle, IndustryGrind, MyCityFaces NYC, and FastPitch Network.
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Jocelyn Brandeis is an accomplished and award-winning communications professional with more than 15 years experience in the entertainment, consumer, new media, B2B, Hispanic, and nonprofit industries. She is responsible for securing interviews and media placement and creating full PR campaigns. Since co-founding JBLH Communications, the client roster has included: National Lampoon Comedy House, Doggy Tug, Mandinez.com, Play Clay Factory, The Samuel Waxman Cancer Research Foundation, and The Child Center of NY.
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