Escalating the Freelance Billing Process
July 22, 2013 1:03 PM   Subscribe

I did some freelance work for a small (seven person) webdesign company this past winter and haven't received the final 2/3 of my payment yet. After some missed deadlines on their part, what should be my next step in getting this money?

Unfortunately, they somehow signed a contract that allowed the client to walk away from the work without giving them any money, so the company themself is on the hook for my payment ($700). I sympathize (the client was quite needy, and he increasingly demanded more and more additions to the site, and I know they put in a lot of time to the project) and honestly, if the company had asked, I would have probably reduced my charge. But they didn't.

I was patient as they tied up their loose legal ends with the client this spring, and after that, they agreed to pay me in May. Since then, there have been two more missed deadlines (end of June, middle of July). During our last exchange, they discussed breaking the payments up into smaller chunks, which I'm fine with, but we'd talked about that before and it didn't happen. My emails with the team lead have been friendly on both sides, and she was a cool person to work with, but I need to take it up a notch, and will call this week to try and work something out.

What should I say during that telephone call? Is it lawyer time? I don't want it to be lawyer time, but I'm sick of hoping to get paid, and then not getting paid, and then hoping again.

Specific phrases and scripts are specifically welcome.
posted by brisquette to Work & Money (11 answers total) 2 users marked this as a favorite
$700 is small claims territory, not enough to be worth hiring a lawyer over. Short of filing a claim, you could negotiate a schedule of smaller payments. If you go that route then I'd suggest you require that the first payment be virtually immediate, e.g. by Friday of this week. If they refused such a plan, or missed the initial payment, I'd file a small claim. If they missed any subsequent payment, I'd file a small claim.
posted by jon1270 at 1:12 PM on July 22, 2013 [2 favorites]

Call up someone in Accounts Payable and ask why the invoice hasn't been paid. "Hi this is brisquette, I invoiced you on MM/DD/YYYY and I've not received payment yet. I need to get this ASAP as it's over 90-days now. May I come by and pick up the check?"

If you can't get the payment by the end of the week, sue them in Small Claims court.
posted by Ruthless Bunny at 1:26 PM on July 22, 2013

If it helps clarify things, consider that a seven-person company has to have annual revenues in the hundreds of thousands of dollars, just to stay afloat. There's simply no way that that an inability to cough up $700 over the course of several months makes any sense. The only explanation of their behavior that makes sense is that they don't intend to pay you at all. Suggesting an easy payment plan calls their bluff. It may not get you paid, but at least you won't be strung along any longer.
posted by jon1270 at 1:30 PM on July 22, 2013 [2 favorites]

I'm afraid you now need to think of this in terms of reasonable psychological pressure, so they put you at the top of the list & pay to make you go away. As jon1270 says, this is a rounding error for a 7-person company, so if they're not paying it's because it seems trivially easy to put it off forever.

If they're local, call round in person and make it clear you will not let this drop & require immediate payment. Make a polite nuisance of yourself and make it personal, addressing people by their name, asking to talk to specific people, referring to specific promises made, saying you're deeply disappointed to be treated like this, etc.

Having said that, also be pragmatic about how much of your time $700 is worth. It's horrible to walk away & let someone get away with non-payment, but sometimes it's the right thing to do (I've only had one non-payer in 18 years in business, for a larger amount, and had to let it go when it became clear pursuing it further would almost certainly cost me more in lost time & energy).
posted by malevolent at 2:15 PM on July 22, 2013

Response by poster: Thanks for all your answers so far, folks. I like the idea of an immediate first payment; it seems like even a small payment will relieve some of my non-payment angst about this.

To clarify a bit about the size of the company: there are seven people listed on their website, yes, but they work from home offices and the overall feel of the company is that they're just getting started (hence the contract oversight with this particular client).
posted by brisquette at 2:24 PM on July 22, 2013

Small claims might make sense, a lawyer won't for $700.

I would keep things friendly as long as possible. I think your best chance of getting paid is to keep pressing them, more frequently, in the most friendly but persistent way possible. You don't know why they're not paying you, but it might not be ill will.

Your next call should be attempting to set a short term date for getting paid (this week, like Jon said, is good). Then follow up at least weekly.

I'm guessing if make yourself a nuisance they will either pay you, get nasty, or try to talk you into a long delay. If they try to stall, refuse and say you've waited long enough. If they get nasty, give up and file or walk away. If they pay, hurray. If they just keep putting you off in a nice way, I'd play that game at least a few weeks before I gave up and filed/walked away.

I agree with malevolent that small claims might not be worth it. I wouldn't expect too much. But, it might be an interesting experience and worth something that way.
posted by mattu at 2:27 PM on July 22, 2013

I know it sucks to be ripped off. It's a crappy feeling. I'm not advising that you drop the matter right away, but I agree with others so far that you should weigh the costs to you and your freelance business in pursuing this matter too much farther. Small claims court is a hassle and incurs its own costs.

In the meantime, you need to focus on preventing the likelihood of something like this repeating itself in the future.

Did you get a 50% deposit? You should have. That way you wouldn't be out the full fee, just half of it. If a new client won't pay your deposit, they're probably going to screw you over at some point. Don't work with them.

Did you have a contract? You should have. In my contracts, I have certain clauses that would have prevented your situation from happening:

1. If you are sub-contracting me to provide services for your own client, you agree to remain committed to the terms of this contract regardless of any actions of your client (e.g., they cancel the project, are slow paying your fees, etc.).

2. By agreeing to these terms, you agree that I am entitled to attorneys’ fees and costs if collection activities are necessary.

The first one nullifies their stupid excuse that their client bailed. So what? That's not your fault, or problem. The second one means they will face $2,000 or so in legal fees on top of the $700 they owe.

So get a good contract and I recommend paying for a lawyer, even if it's expensive. If a client won't sign your contract, don't work with them.

And it goes without saying, never work for this client again, not at least until they pay you what they owe and all future projects are paid up front in full.
posted by Leontine at 2:33 PM on July 22, 2013 [1 favorite]

You could go the collection agency route. For this size of debt you may be looking at losing up to 50% of the collected amount to the agency's fees, but ask yourself the value of the time you'd spend pursuing the debt in court on your own behalf, vs. turning over the whole process to someone else. Plus, if you go the small claims route, you're probably still going to be stuck with having to enforce the judgment.
posted by drlith at 2:35 PM on July 22, 2013

Small claims court is not that hard, I've done it. It may take half a day of waiting at a court house, but some paper work and a small filing fee later, it's done. Just be sure to bring contact information, and evidence like your contract and correspondence between you and the company.

I'd give them a fair warning before you actually file though. Say, two weeks. I'd think, as a small start-up, they'd be very sensitive to the threat of being sued, because it really tarnishes their name.

Either way, it would help you get closure. Either it will pressure them to pay you, or you'll know that they never will (or can't) pay you.
posted by cupcake1337 at 8:47 PM on July 22, 2013

Do you ever want to work for them again? No? Then time for hardball. Forget a collection agency, they can't do anything more than you could. First, gather all the contact info for everyone listed on the website, try to track down their mailing address, email, phone number. Then offer to settle for $500 if you can have the payment within 24 hours (paypal, western union etc). If this is refused, there is a chance your point of contact is keeping the others in the dark. Contact everyone with the offer, and give them the alternative of giving you $900 of equipment (ipads, laptops, office chair etc)
Failing this, then it's small claims time, and make sure every officer is served, and every one on the website gets a copy. Don't forget to ask for legal fees etc in your claim. You'll probably win if they don't settle, but then collecting is going to be a major problem. I'm guessing that you are dealing with something more like an association of freelancers than what most people think of as a 7 person company.
posted by anon4now at 9:02 PM on July 22, 2013 [1 favorite]

Small claims court is fine, and so is becoming very prominent in their lives trying to get your money. It's due to you. Their relationship with the upstream client has no bearing on what they owe you -- you didn't sign that crappy contract.


You must wear a smile and be a completely nice person during every interaction with them. Take deliberate steps and don't waver, but do not acted pissed off or say anything inflammatory. Don't ponder or attempt to execute any kind of revenge. You might be surprised at how you'll be able to both pull off getting your money *and* not ruin any relationships. Be clear. Be direct. Be polite. Be nice. Take actions like filing in small claims court, if you have to, but never let anyone say you're being anything but completely stand up about it.

This will prevent it from becoming personal. And you might be surprised who actually winds up on your side. People not privy to the details of the situation are going to decide who they support based on intangibles like who seems like the biggest jerk or asshole. Don't be the biggest asshole. Or any kind of asshole.
posted by chasing at 9:57 PM on July 22, 2013 [1 favorite]

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