Raising Rates in NYC + Freelance Isn't Free Act
March 21, 2017 3:07 PM   Subscribe

I've been working with "Marney" for 3 years. I charge her $50/hour for all-inclusive communication services: high-profile speeches and pitches on multi-million dollar bids. Recently, she partnered with "Barney," and he hired me to write the pitch for a multi-million dollar proposal too. Between both companies, I had three consecutive rush jobs in five weeks. They now owe me several thousand. How do I get them to cough up before tax time? What's the best approach for raising rates and adding rush fees? I want my new terms to align with the new Freelance Isn't Free Act in NYC. Advice?

The worst of the three rush jobs kept me working for nearly 30 straight hours. Marney has a long history of leaving things to the last minute, and then I am forced to pull all-nighters to meet the deadline. In this case, it was such egregious overtime, I was in contact with her at 4 AM two nights in a row.

Apart from the sometimes insane hours and pay irregularity, Marney is the easiest client to work with I have ever had. If she writes, I edit. When I write, she edits. It's an ego-free relationship that offers a range of really interesting work that is helping me build a career that I would never have the opportunity to build without her. She and Barney also both LOVE my work. All of my feedback all of the time is ecstatic. The crazy speech got a long fan letter from a prominent person in Marney's world; the proposal letter I wrote for Barney was, according to the Project Manager, "a big hit." I always meet ALL deadlines.

That said, Marney has done a bit of a job on my finances, for although she has always paid me, she has NEVER paid me in a timely way or predictable way. (She has a long history of this with all of her contractors.) In order to get paid, I often have to ask several times, and I've long felt I'm forced to beg for my money.

When I realized the full tax burden I would be paying on my original $25/hour contract rate from her, I slowly started pushing back. (This is after I moved to NYC green, after several years of recession-related unemployment. Note that I was a book editor for 15 years and have another 5+ years of communications work of all kinds. I also used to be freelance in another City, a long, long time ago.)

Over time, I have also started to enforce my freelance rights. Nowadays, I only work from home, and I doubled my rate with her about 8 months ago to the current $50/hour. In the last few months, I have also been increasingly aggressive about timely pay.

These last three rush jobs really blew things up. My pay was, once again, not on time, and everyone was vague about it. When it did come I was asked to redo my invoices for a variety of reasons I was given no warning about.

Over the next year, I hope to expand my client base and pay rate considerably. In the meantime, I am making most of my money from Marney (and now Barney), and if I could get pay under control, and fewer consecutive rush jobs, it would be an excellent on-going base gig.

To get my pay under control, I want to raise my rate for both firms. I also want to institute a rush fee, as a preventative measure as much as anything. It occurs that anything I do like this should align with the Freelance Isn't Free Act, effective May 15th, 2017, (summary) to insure as much legal protection as possible, too.

Given the range of things I do, do you think $65/hour and $100/rush are fair fees?

I feel like I can only go so high in my fees, considering I doubled them only 8 months ago. By the same token, I am writing the pitch for multi-million dollar bids, and high profile speeches.

The text below is from a draft of my proposed increase. I include the 12-hour reference and a "brief proposal," to put me at the minimum $800 project-level, and insure a contract. Both comply with key tenets of the Freelance Isn't Free Act. Do you think this is an effective professional approach?
Dear Barney and Marney,

Attached are five (5) invoices, totaling $XXXX.00

Since all but the smallest invoice (Date) include rush jobs (Project 1; Project 2; Project 3) for both Marney and Barney, I will need to be paid in full before I take on any additional work with either firm.

Please note: I will be raising my fee for both "Marney" and "Barney" to an all-inclusive $65/hour rate for all "standard" communications work, and $100/hour all-inclusive for all "rush/emergency" projects, as of April 1, 2017.

All invoices will be due upon receipt.

"All-inclusive" work refers but is not limited to original copy; substantive editing; the design and layout of complex documents, including the creation of charts and tables; research; ghostwriting; journalism; speechwriting; advertorials; marketing copy and content; proposal writing: pitches for proposal cover letters, introductory statements, and the like — as well as all related work.

"Rush" jobs generally refer to any project which does not allow a reasonable amount of time (counted in days, accorded to estimated hours), for completion, but instead rely on my performing more than 12 hours of work at a single stretch, on one or more consecutive days, in order to meet Marney or Barney deadlines.

"Rush" jobs are defined at my discretion, but to insure clear communication, they will be addressed in brief project proposals that include a project description, deadlines, and rough time estimates based on prior experience. Work will commence upon the client's agreement to the proposal.
Please discuss! I welcome all advice, thoughts, insight!
posted by Violet Blue to Work & Money (12 answers total) 3 users marked this as a favorite
Add late fees to your fees (e.g. 15% added if not paid within 30 days of receipt of invoice).
posted by brainmouse at 3:11 PM on March 21, 2017 [18 favorites]

It is unclear what the relationship is between Barney and Marney exactly, but based on your email, they are separate firms, which means that contacting them both in the same email with information about billings for the other client seems really unprofessional. It's clear from the overall question that their relationship isn't just two random clients of yours, so it might be okay, but there are really very, very few situations where that would seem at all acceptable, so please carefully consider whether it is.
posted by jacquilynne at 3:27 PM on March 21, 2017 [10 favorites]

What do your current contracts with them say about consequences for late payments?

Obligatory link to Mike Monteiro's classic talk on this: Fuck You, Pay Me.
posted by sadmadglad at 3:31 PM on March 21, 2017 [2 favorites]

oh, Also! Write this stuff in a contract. Have them sign the contract before you do any more work for them. Don't just send the email and consider it done.
posted by brainmouse at 3:36 PM on March 21, 2017 [4 favorites]

A couple of quick answers: Barney and Marney are separate firms, yes, but they share a project manager, accountant, and space, so there's a lot of overlap.

There is no current consequence for late payments. I've been promised more times than I can count that I'd get paid on a two-week cycle. It often takes two or three times as long.

"oh, Also! Write this stuff in a contract. Have them sign the contract before you do any more work for them. Don't just send the email and consider it done."

How does that work? I've never had a signed contract with anyone. Only implied acceptance, which I'd always understood was legally good enough.
posted by Violet Blue at 3:47 PM on March 21, 2017

How does that work? I've never had a signed contract with anyone. Only implied acceptance, which I'd always understood was legally good enough.

If you work in professional services, spend some money and have a lawyer whip up a standard contract for your services. It should include things like: who can cancel the contract and why, what the kill fee is, when will you be paid and why (20% upfront?), what is considered "complete", penalties for late payments, whether revisions will cost extra or are 'included', what the deadline is and what that means (deadline for first look by client vs deadline for final, no more changes product?), "rush fees" and what is considered "rush", and who owns the copyright on your work.

None of this will matter until you have a bad client experience and then, suddenly, all of it will matter. And while your draft email is a form of contract (and the Freelance Isn't Free Act does *require* a written contract with certain basic pieces of information, what is 'required' can get loosey-goosey because of the final clause), why not get a lawyer to rewrite it so he or she can tighten up your definition of 'rush job' in case you and a client fall out over it?
posted by flibbertigibbet at 4:03 PM on March 21, 2017 [8 favorites]

Barney and Marney are separate firms, yes, but they share a project manager, accountant, and space, so there's a lot of overlap.

Doesn't matter; you need to treat them separately. Conflating all this stuff together can be bad for you in the long run.

I would inform them of the rate increase for new jobs after you receive payment. The last thing you want is for them to decide your rate is too high to continue working with you, and that they therefore no longer need to worry about paying you for your previous work. It sounds like future access to your professional services is their biggest incentive to pay up.
posted by grouse at 6:30 PM on March 21, 2017 [8 favorites]

I work in non-profit digital marketing where it's reasonable for consultants with your experience level to charge $100-150/hour. Straight communications (not digital) might be a bit lower, but you're also operating in the for-profit world, so it seems like your target rates are extremely reasonable and could be higher. I understand wanting to grow sustainably and not scare away potential clients with too-high rates, but I wonder if these rates are part of the problem, i.e. you're attracting clients looking primarily for a bargain.

Have you done research on the market? Do you know what other similar consultants charge?
posted by lunasol at 7:09 PM on March 21, 2017 [2 favorites]

I gotta say that the best thing I ever did to realign the behavior of my crappy-no-paying-last-minute-rush-taking-advantage-of-my-patience-and-goodwill clients was to jack up my rates 3 fold. It's amazing how much better you get treated as a consultant when your rate makes them value your time.

Definitely separate the demand for payment letter from the rate increase letter, and separate letters to the different clients, for all the reasons mentioned above plus you never know when Marney or Barney will have a falling out: you want to retain relationships with both of them, separately.

Something to think about: for repeat clients who are slow to pay, I set up a retainer arrangement: they pay me in advance, I give them meticulous records of how much is left in the retainer as work proceeds, and when the retainer runs out, I stop working.

They now owe me several thousand. How do I get them to cough up before tax time?

If you are—like most freelancers—doing your accounting via cash basis, then you report Marney and Barney income in the year you receive it, not by the date of the invoice.
posted by jamaro at 7:15 PM on March 21, 2017 [15 favorites]

Over the next year, I hope to expand my client base and pay rate considerably.

I'm with flibbertigibblet, you might want to also think about requiring upfront money (call it a deposit?) based on a % of estimated hours before beginning a job.

Tell the current clients that you're taking on more work and they'll need to lock you in before starting. Or would that not fly with Barney and Marney? What about a fixed monthly retainer that guarantees X hours of service per month?
posted by JoeZydeco at 7:15 PM on March 21, 2017

You can and should be getting paid double what you're asking now -- on time. A resource that I can't recommend enough to help you get to that place is here. It has good explanations of retainers, contracts, negotiating tips, and the like.
posted by Kalatraz at 6:13 AM on March 22, 2017

I agree with the raising-rates as a solution, and potential penalties. Or you can use the regular supplier approach, of providing a "discount" for timely payments (just bake this into your new rate). You should think of this as an Accounts Receivable problem: you're providing free financing to them. Charge them as such.

I also agree that you should treat both of them as separate entities. It's more professional and in the long run, should their relationship deteriorate, leaves the door open for a continuing relationship with both.

One thing I would like to say about the "last minute" nature of their requests. This may be a huge part of why they use you. I understand that your work is very good, maybe the best in the industry. But the nature of these roles is to bail out the Marneys and Barneys of the world. It may be worth looking at your competitors to understand what switching costs for M&B would be, and whether increasing overtime rates or adding a "rush" premium would cause them to consider it.
posted by teabag at 6:24 AM on March 22, 2017

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