Professional Practices They Don’t Teach You In Art School: Contracts – It’s Business!

Yes, everyone says GET IT IN WRITING! Still most people are afraid to ask a client for a contract. Don’t be ashamed of yourself for not doing it – most freelancers don’t. There are many reasons behind this problem.

You don’t know what to include in a contract.

Professional Practices They Don’t Teach You In Art School: Contracts – It’s Business!

You’re afraid you’ll “insult” your client.

You’re afraid the client won’t want to go ahead with the assignment if you insist on a contract.

NOTE: This article, the fifth in a series of eight articles on Professional Practices which they don’t teach you in art school.

The client tells you he/she doesn’t sign contracts.

The client says you can trust him/her.

All of these are the most common things you’ll hear. I’ve heard them and still do. I always will. After so many years of freelancing, I just know the bottom line – if the client won’t accept a contract, there’s nothing but trouble ahead. Do you walk away at the beginning and save time, money and aggravation or put in time, phone calls, gas to meet with the client and get halfway through and have to start over and over and then fight to get paid?

I’m not saying anything you haven’t heard before but creatives aren’t considered vendors who provide a “real” service. Clients have no problem signing contracts for phone service, office machine leasing, lawn cutting or any ongoing service that demands payments under a service contract. You want this? Sign a contract and you’ll get it. Clients sign contracts all the time. The funny thing about clients is that they must sign contracts with crowdsourcing services and usually do without a second thought. I fully admit to doing a couple of jobs through an online crowdsourcing service and the first thing the client wanted to do was have me deal with them outside of the service… and outside of the contract and payment protection.

Why Do They Get Frightened?

Since “everyone is creative,” clients don’t see value in something they feel they could do themselves, or they are just cheats. Am I being crass? You know the answer. If you won’t work without a contract, the next person will. The question is; should you cave to that kind of pressure? Only you can decide.

The bottom line is that they are scared they will commit to something they won’t want or agree to terms that will tie them into a finished design they don’t like. If you write your contract well, you can help put them at ease. Every job is different, as is every client. Print work is different from web work. Social media work is also different. You need to be flexible with terms, read your client’s needs and protect yourself.

Key Points to Consider

Does the client want a flat fee or hourly billing? Most clients are afraid hourly billing will break their budget if they request a lot of changes until they see what they want. When first meeting with a client, look for the red flags. Do they know what they want and point to examples they like? Do they say they’ll, “know it when (they) see it?” Do they tell you they have a partner or two and you’ll need to “take direction” from each partner? When faced with these factors, you need to:

Price the job accordingly.

Write a contract to make sure the job goes smoothly for all parties.

All parties. This is the major consideration of a contract. As I explain to clients who get nervous about contracts, the agreement protects BOTH parties.

Out of desperation with clients who wanted too much for a flat fee, I started quoting two contractual fees. The easy way has one round of changes and that’s it. Quick, easy and a lower fee. The not as easy way has an hourly fee for changes above one round on top of the flat fee. At that point, it’s up to the client to decide if THEY want to streamline the project and save their budget. If they want to run the project with design-by-committee, then they can pay for my time to make all of the changes. I’ve made more than three times the flat fee when they choose this option.

Sometimes you need to lead a client down the path of understanding how freelance design works because they have never dealt with it before. They know if they pay for phone service, they get a certain amount of minutes or talk-time. Explain that design is the same way. Design time. A project that they want for, say $1,000 that should take a week, then stretches out over a month is a huge loss for you as a freelance vendor. Explain your hourly pay rate. If they think it’s too high, you are facing trouble. Once you have come to an understanding on the time allotted for a project and the options they can choose so you can make a living and they will be happy with the results, take what is said and promised and put it in writing. That’s your contract. Explain to the client that you will send them the “creative brief” and contract.

When Is A Contract Not A Contract?

Simply, when it’s semantics. A contract can be called a “creative brief,” a “purchase order,” a “job confirmation,” “work order” or anything else that says, “this is our written agreement.” As long as the specifics are in writing, it’s a contract. Often slipping a contract past a client with a “softer” name is easier.

Do you have to have them sign an agreement? Yes and no. I know large design firms that have contracts that are more than ten pages of repeated terms. It covers every possibility, covered at least once, if not twice.

With the digital age, however, there’s no need to get a contract signed. I include my “engagement agreement” with my creative brief that I email the client. A returned email is a legal agreement that the terms have been accepted. I also include a final passage that once work is started, the terms are deemed accepted by the client. It’s simple, friendly and covers everyone’s rights. Keep in mind, you can write a contract on a paper napkin during a lunch meeting, have it signed and it will stand up in court. A simple sentence like, “one web site for $5,000″ is a contract. Not a great one but if you have to go to court, it will be accepted as a written agreement between the parties.

The one drawback to sending a contract via email is the client claiming they never received it. It’s funny but they will get every single email you send, but the one with the contract just doesn’t make it through cyberspace. It is essential that the agreement be sent WITH the creative brief so any reply shows the client has received it. It’s best to start the email with, “here’s the creative brief from our meeting and my work agreement, outlining milestones, payments and terms of the project.” You must also make sure the contract states at the very end, “client agrees to these terms as legal and binding once work has proceeded on this project.”

I’ve had clients, who claim they didn’t receive the email, but when I point out the contract is right under the creative brief; I have been hit with some creative responses:

“I didn’t read down that far.”

“I stopped reading when I saw it said Work Order and Terms.”

“I don’t read or accept contracts!”

“But I emailed you back, saying I don’t accept contracts. Didn’t you get it?”

None of these are defensible in court. Even the supposition that the client sent an email, turning down the contract terms is weak as it was their responsibility to make sure YOU acknowledge the receipt, just as you are making sure they respond to the email with the brief and contract.

What Should A Contract Say?

It depends on what you are designing! Print and web design are different jobs with different needs for rights and payments. Print needs at least two payments – one up front and a final payment. Web projects have milestones with several payments beyond the upfront payment. There are also usage rights you need to cover.

The AIGA has a contract you can download and it covers most projects (most being print and not digital). Download it by clicking here.

I prefer the books on contracts by Tad Crawford. He has several books with contracts for different disciplines in design, so if you need a contract for web, print or photography, you can cover your rights. Available on CD-ROM, it’s easy to copy and customize them on your own letterhead.

If you work for a large corporation, they will have several documents you must sign and return before work commences. The first is a Non-Disclosure Agreement (NDA). It’s standard and something you shouldn’t fear signing but read it and understand the terms. Basically, it says you will not discuss the project with anyone else and will set a period of time that you can’t put your samples in a portfolio or on a web site or blog. Make sure you understand what that time period is as the ramifications can be severe!

I had a friend, well, rather a stalker who said we were friends, who always asked what I was working on. When I would say I had an NDA and couldn’t discuss it, he would reply, “I won’t tell anyone.” He would also ask to see a jpeg and promised he wouldn’t show anyone.

Plain and simple – signing an NDA means you tell no one what you are doing, whom you are working for, etc. Some corporations guard their projects better than governments guard nuclear secrets. What will friends and family do if you say, “I can’t discuss it because there’s a NDA – torture you for information?

The other document you sign will be their contract. Go over it thoroughly! There may be something you don’t want to agree upon, although chances are it will be very fair. If you want something changed, you can ask but in all reality, they will tell you to sign it as is and there will be no give and take, aside from them giving you terms you must take.

I’ve heard “famous” designers talk about how they “just crossed off terms (they) didn’t like,” or “(they) insisted on better terms.”

I also know “famous” designers who are certifiably insane. I’ve heard of too many design studios that have cut their staff by half and are renting out studio space or moving to smaller offices. I doubt they are dictating terms or walking away from contracts they find distasteful.

Some Terms To Include In Any Contract

It used to be standard to ask for payment within 30 days. As a friend of mine says, “30 days is a jail sentence, not payment terms!”

The economic times being what they are, and both parties knowing the exact delivery schedule, it is not unusual to ask for payment upon delivery. For many projects, payments, starting with a percentage at the beginning, have milestones at which another payment is made. With long projects, milestones are the sections where you have provided enough work to warrant payment so, as silly as it sounds, you have money to pay employees, rent, or even buy some food! Would a client work for their company for a month or six months without a salary? Are you expected to finance a company’s expenditures? Ask a client what happens when they are late with a credit card payment. Then remind them you have operating costs that must be met.

There’s an interesting key to the copyright law and it strengthens the need for a contract – a copyright can only be transferred in writing. Yet another argument for a contract with a client. I once told a client who was hesitant about signing a contract that it protected his company from me. He had a confused look on his face and I explained that I might go totally insane and deny I ever gave up the copyright at a later date and sue him for more money. Then I laughed maniacally. He didn’t sign it but he wasn’t going to do it anyway. I learned if I didn’t do the laugh, clients were more amenable to sign the contract. I just laughed inside.

An important passage in any contract is the length and scope of the project. Spell it out or you will find scope creep will turn your two-week project into months. Put in writing what is included in the quote or later you will be asked to just add this or that or do a little favor, blah, blah, etc. It can add up to thousands of dollars worth of work.

I’ll do favors for the art directors for whom I work. I pull their rear ends out of fires and they keep hiring me because they value me. They will tell me honestly what I can charge and sometimes it’s higher than what I would have quoted. It’s a good and trustworthy relationship. I don’t do favors for the company. The company isn’t a person and when some faceless entity didn’t get a milestone check issued in time or some other problem that means I have to trust a corporation to do right by me, that’s where favors end.

I was asked, or rather boasted to, that I didn’t have to bill any upfront fee because the large corporation “wasn’t going anywhere” and “always paid within 30 days.”

I had to bring up the impending chapter 8 bankruptcies the firm was filing. I didn’t get the project but later heard vendors weren’t being paid.

There are many important factors to cover in a contract. I highly suggest checking out the AIGA contract and purchasing the books I mentioned earlier in the article. A few dollars now will save you thousands over your career.

But I DON’T Sign Contracts!

There will always be clients who just don’t want to deal with a contract. You can either trust them or not. One leads to not being protected and the inevitability of you, as vendor, not being happy in the end. The other protects both parties. This is the important fact to communicate to the client. Design is not ethereal nothingness. You are creating a product that will define a company and the brand by which they are known. A contract assures smooth, competent and legal avenues for the best possible outcome.

When confronted by the “trust” argument, a friend of mine use to say, “I trust you implicitly but you might get hit by a bus tomorrow and then I have to deal with your company or estate and they won’t know who I am or to what you and I agreed.”

In simpler times, that worked. Now, with the Internet and digital initiatives that come and go with the blink of an eye, contracts protect all parties and that’s the argument that has weight. Payment, disclosures and rights transferred can only be trusted to writing. If you think you’re going to insult your client by bringing up the question of a written agreement, you need to re-evaluate your place in this business or just get use to gambling with each project.

Those who don’t use contracts also tear away at our entire profession. When a client claims he/she has never had to sign a contract before, it hampers our ability to raise the professional view we all need to run successful careers. Contracts usage is a united front preached by every professional design organization and guild. Make sure design is part of that united front.

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6 Comments

  1. Nice post and the discussion is very useful for readers. i also gain a point that contracts are not a worth thing to do. but after that if we neglect the contracts than what we can do instead of contracts?

  2. Yes, get a contract. If it’s a large job, walk away if they don’t sign. For smaller jobs, if they refuse to sign, you can use emails to verify milestones and work that was delivered and approved. Simply write at the end of your email “if the deliverables, costs, scope etc of this email are approved by you and your company, please reply to this email with your approval” (or something to that effect) Keep all emails!!! Emails are legally binding!!! they won’t replace a well constructed contract but they are the next best thing, and having them gives you tons of leverage when collecting money or citing agreed upon aspects of a project

    So it goes…

    -dp

  3. Speider, don’t know that I totally agree with you on this: “Those who don’t use contracts also tear away at our entire profession. ” Thank you.

  4. Hey, Snappy! Good to see you reading another one of these posts. You’re a loyal bi-valve. ;)

    Well, as I stated, when one designer doesn’t use a contract, the next designer in line has to deal with the belief, on the part of the client, that contracts are not necessary “because (they) didn’t have to sign one with the last designer.”

    Perhaps saying the entire profession is a bit melodramatic (although I don’t think it is) but it certainly will affect designers in close proximity of clients that haven’t had to deal with contracts from designers.

  5. wow that was very very interesting :o

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