Show Me the Money

Dear Client: Seriously, Show Me the Money

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The Smackdown

You’re a web developer who can’t get the attention of your client. You send invoices. You send reminders. You did the work but now they’re not responding and all you have is their initial down payment.

You start getting angry because you know you’re being ignored. What do you do?

If you’re mad enough, you might post a tweet like this:

I bet these bastards still think I won't fight back and let them get away with betraying me and escaping payment.

But first, coffee.

— Frank Jonen (@frankjonen) February 14, 2013

And soon, you might follow it up with this:

https://twitter.com/frankjonen/status/301894155204964354

And eventually, as you get a few tweets that cheer you on, you’re on a high that’s driving an emotional decision – something we’ve all been through.

You take down their web site and replace it with a message to your client’s clients.

So here’s the question – just because you can punch their lights out, should you?

We’re not talking about legal rights. We’re not lawyers, but we’d sure hope before you go apeshit and take down their site, you’ve checked and know you’re covered.

Heck, we’re not even talking about your ethical rights, because taking back your work product from someone who isn’t paying doesn’t seem like much of a moral challenge.

We’re talking about the impact. The trust equation. After all, you are in business and at the end of the day, all you have is your reputation.

Here are three reasons why taking over someone’s site for non-payment will end up hurting more than helping you. You are clearly telling future clients:

1. you don’t know how to process conflict professionally and in private.

2. you let emotion rule you.

3. you didn’t have a great work agreement to start with.

There’s very little upside to the action except for the emotional pleasure of defacing the site – which will wear out quickly.

Now to be clear, we’re not judging Frank as a human being. His situation plainly sucks. But if you’re in his shoes and wondering what to do, let us propose some ideas. Hopefully, in the comments you can add a few more.

Some practical tips protecting you from non-paying customers

Choose clients carefully: http://tri.be/should-you-take-the-gig/
Wear protection: http://tri.be/update-the-shane-peter-inc-contract/
Stop offering stuff for free: http://jamesdalman.com/why-you-shouldnt-offer-web-design-services-for-free/
Write proper invoices: http://www.smashingmagazine.com/2009/11/05/invoice-like-a-pro/
Have a process: http://www.sitepoint.com/how-to-deal-with-non-paying-clients/
Marry your clients: http://alistapart.com/article/marry-your-clients
Don’t create a hostage situation: http://chrislema.com/where-is-your-focus/
Send them to Collections: http://freelanceswitch.com/the-business-of-freelancing/collections-guide/

Some things to remember

Some folks will recommend providing a discount as an incentive to pay you early. Chris found that the result can often be a discounted payment that arrives late. So he doesn’t recommend it. I personally think its a viable approach.

Also, you may threaten legal services. Two things to note – if you threaten it, be prepared to act. This isn’t the time to bluff. Secondly, make sure you do the math, because your legal fees may be more than what you’re suing for (and just because you win a judgement doesn’t mean you can force payment). Don’t forget to look at the contract carefully.

The heart of the matter is often a calculation between the real cost, the emotional cost and the reward. Can you make more money spending that time with a new customer than on chasing the delinquent funds? The key is to create a process, know when to stop work, be friendly yet persistent.

With larger companies, we’ve discovered the problem often lies with bureaucracy rather than ill-will. Making a friend often works much better than being adversarial. Make sure you learn their process. Figuring out how to navigate the corporate financial back alleys is worth its weight in gold.

Remember, you aren’t alone and the industry itself is trying to figure out how to handle the problems of unpaid wages.

Both of us have taken a hit and moved on. In other situations, we’ve sent emails and made calls. In one case, after nearly 6 months of being ignored, I sent it to collections. We now have a lien on the dude’s house. Will it pay out? I kind of doubt it, but it was a satisfying day in small claims court.

So, how have you dealt with vagrant clients? Do you think Frank was right in his approach?

There are 16 comments

February 17, 2013 #

RustyH

If you don’t pay your host, they suspend the account… It is expected. Why should a web developer allow non-payment without similar consequence.
- February 18, 2013 #
  
  Chris Lema
  
  While your host may suspend your account, they won’t change your site and send traffic elsewhere. The actions here were a bit more than just suspension. Everyone has to draw their own line, and decide what to do when a client doesn’t pay but I’d suggest putting a system in place to catch an issue before it gets this far.
- February 18, 2013 #
  
  Joseph Feliciano
  
  Exactly. Their pretty much thieves if they hire you and willingly never pay. We are suppose to allow them to continue operating business and profiting based off our design and development work and not be payed ? Sorry, thats just a flat out no.
  
  They will go down. They know why, and other clients understand. You don’t pay your bills, things get cut off and shut down. Take us serious as professionals and get treated with the same in return.
February 17, 2013 #

Jay Tillery

I think Franks approach was a little aggressive. This is the price most of us Freelancers have to pay at some point or another. I’d chalk it up as a loss and try to move on. Put that angst into something positive/creative. I try and focus on landing clients within a 50-60 mile radius. That way if I get a person that doesn’t pay, I could make a small visit. 😉
- February 18, 2013 #
  
  Joseph Feliciano
  
  I feel like thats the “I let people walk all over me and then I smile and keep moving” mentality. Wealthy business men don’t become such by playing nice.
  - February 18, 2013 #
    
    Chris Lema
    
    You can be a businessman without being a jerk (not saying Frank was or wasn’t). But there’s no good reason to keep developing without checkins and payments along the way. That’s why you need a system – for communication and for billing, so that things don’t get too far out of hand.
February 17, 2013 #

Dallas

There is a great episode of Seinfeld where Jerry gets booed and heckled during one of his stand up acts.Later on in the show, George convinces Jerry to go heckle the heckler at her place of work. Jerry responds by saying that would be the ultimate comedian’s revenge.

In a similar way, what Frank did was, in my opinion, the ultimate web developer’s revenge. I mean, how awesome would it be to stick it to one of your none paying clients? Unfortunately, you have to ask yourself if it is the right thing to do. The professional thing to do. Clearly something went horribly wrong. Maybe the client really was a scumbag or maybe communication completely broke down half way through the project, who knows. Either way, I think publicly humiliating a company is a pretty unprofessional thing to do. If Frank honestly tried all forms of communications and still couldn’t get paid, Jay is most likely correct when he says it should be chalked up as a loss.

I am not completely positive, but maybe this situation could have been avoided with better communication and possibly a better contract? When working on freelance projects I never give the client all the files or set up the site until I have been paid in full. I regularly send them updates, screenshots and allow them to test out the site on the dev server but I never give them a finished product without being paid in full. Before I start, there is a 50% retainer. After the design is completed the client pays 25% of the total. After the development is completed they owe the final 25% and once they pay their last invoice they get the final product. With this system, I have never had a major problem. That’s not to say it’s perfect but I do believe it’s a great way to handle payments.
February 17, 2013 #

George Stephanis

I’ve seen a client in a similar situation with a former developer that they used to do business with.

The two people that he had been attempting to contact with invoices at the company no longer worked there, and instead of actually picking up a phone and calling them at any point whatsoever, he just killed their site dead.

Now, I’m all in favor of a creator’s right to control the code they generate until such time as it’s been properly paid for in full, but before you turn it off, do some due diligence, to make sure that the emails you’re sending are actually reaching a real person, not an abandoned mailbox.

Pick up a dang phone and call the client. If they blow you off, then sure, consider taking their site down for non-payment. But don’t even think about it if all you’re doing are token emails that you don’t know whether they are or are not being received.
February 18, 2013 #

Oz

GEEZ! This is a tough topic.

Let’s look at what it takes to send someone to collections or use the court system.

– Collection agencies tend to want volume. They aren’t into collecting on 1 entity for their delinquent $800.

– Court and legal fees. The cost and time and hassle can be prohibitive. Spend $300 filing in small claims court, wait 6 weeks for a hearing.

If the subpoena wasn’t served, the case is continued another 6 weeks. Let’s say you win. That doesn’t mean the defendant writes out a check on the spot. Do you go put a lien on their property for the one day some day they try to sell the property? This is one reason why a lot of lawyers won’t take these case–even if your contract says that you can sue for attorney fees.

As much as freelancers preach about contracts contracts contracts, they’re great for defining the project, but for legal action they aren’t worth much at all if there isn’t enough money and a defendant that clearly can pay.

I’ve been down this road. Two lessons I learned:

1. The person was a start-up company that eventually failed. I’m wary of this now.

2. I let them get too far ahead of unpaid invoices before I stopped working.
February 18, 2013 #

Dan

I think you’re all overlooking a few critical facts in this he-said/she-said story:

1) Frank took down services and content he did not create/does not manage for the client. They could probably sue him for damages and maybe defamation. (It’s illegal for creditors to publicly identify debtors as such, but I don’t recall what the legal terminology is for that.)

2) Frank seems to be operating out of Europe, and the client is in California. It’s easy for them not to pay him, for whatever reasons, and it’s easy for him to retaliate without much consequence. Neither is likely to be able to sue the other.

The client has their own story, and of course it makes them look like the good guys. http://www.adweek.com/adfreak/agency-replaces-clients-website-nasty-letter-after-not-getting-paid-147291

I think it makes them both look bad. By their own account FitnessSF hired Frank, a single, foreign/remote location contractor to build their entire site on WordPress in 10 weeks with an initial payment of $5000. I’d assume that was 30-50% of the project total–most likely half. Tight deadlines, a low-ish budget, only one person responsible for delivering a complex product on schedule…once they both agreed to it, it was a relationship with a high chance of failure, and surprise–it failed.

I’d like to see the contract, if there was one, and what it said about disputes, arbitration, and legal jurisdictions. At best it would be meaningless boilerplate.

Once a relationship like this breaks down, neither party involved has real recourse to a legal remedy if they are not in the same jurisdiction. A small business in Europe can’t collect through the California courts. A small business in Illinois can’t even hope to do so. Collections might work but would require a $3000-5000 amount to be in play, at minimum. I don’t know if collections are even possible from outside the US.
February 18, 2013 #

Paul Underwood

As a last resort I think it’s fine to take down a site of a client who isn’t paying, it will force them to stop ignoring you. But I don’t think you should change the content on the site to tell everyone they haven’t paid their bills. Just up a maintenance page or something.
February 18, 2013 #

Joseph Feliciano

Your either a creative who isn’t interested in wealth, just doing what you love to do and making a living … Or a creative businessman who is interested in wealth and doing what you love is just a bonus.

The people who would let things slide are the people who will allow themselves to be walked all over time and time again … Their are legalities but at the end of the day. Food needs to go on the table, and I will not be walked on.

Period. Everyone should act and do something.
February 19, 2013 #

Greg Marshall

Back when I was a gun for hire, I was paid monthly net 15. Money stopped, I stopped. Did a lot of small monthly maintenance jobs so was never going to be out lots of money. I just did not let it get out of hand.

I also believe you should always send someone to collections if they are really trying to defraud you. That let’s the next guy, when doing due diligence, see what kind of company they are dealing with.

You can send someone to collection for small amounts. I had a collection company that would take $100 buck collections. It was automated for them and on the small ones they got a big chunk of the money. I did it to warn other companies.
February 20, 2013 #

Madeline Laughs

I liked his approach! I think that kind of action is awesome and these days if a person can’t pay their bills, they need to communicate that to you, not avoid you.
February 24, 2013 #

Paul G.

Great article, and unfortunately there’s no right/wrong way to handle each case.

I disagree with all 3 of these points though:

1. you don’t know how to process conflict professionally and in private.

2. you let emotion rule you.

3. you didn’t have a great work agreement to start with.

The 3rd, I completely agree with. There should be a basic agreement and payments-vs-handover process in place.

But, I don’t view it as unprofessional to remove your work from an un-paying client. There’s nothing unprofessional about publicly showing that a company is itself unfit to do business with.

Where I live for example, there are people protesting outside of shops they work because their bosses don’t pay them. Hard times, but the reality is, if you don’t pay your staff (or contractors), you reneg on your commitments, you’re unprofessional, and the consequences are yours to suffer. I don’t go into shops and spend my money where I know the business owner doesn’t pay their staff – I prefer to be informed than not.

The assumption that removing your work from a client’s site is emotional and unprofessional can’t be made. It really depends on the course of events and the individuals involved.

Granted, there is a difference between simply removing your work, and putting up a replacement site and publicly calls the company out.

Solution is to have the agreements/processes up-front from the beginning.

Cheers!

Paul.
February 4, 2014 #

Mario Y. Peshev

In 2008-2009 few potential leads from Italy (independent) let me know that they pay 9-12 months after completion. Three examples were a construction company, a digital 3D agency building 360 views for hotels, and a modelling agency.

We didn’t signed due to those terms, and I’ve had a few examples with 3-5 month delays from other large corporations. I’ve never been stiffed by a large client (few times for small gigs that wasn’t worth going after them), in my experience it’s usually a bureaucracy and a long, complicated internal process.