Today, we turn our attention to a question which vexes freelancers but leaves many entrepreneurs struggling to outsource their work in an efficient manner. “Can freelancers be trusted?”
We wish that there was a simple answer to that question but there isn’t. We’d suggest that a more useful question is not “can freelancers be trusted” but rather “how can clients and freelancers minimize the risks when working with each other”?
That’s a question I feel much better suited to answer having sat on both sides of the equation. I am a freelancer, but I regularly hire other freelancers to work on things that I am no good at or which would take me more time than I’d want to spend on something.
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The Freelancer’s Position: Personal Experience
I’ve had 3 clients try and rip me off over the years. I imagine that it would have been more had I not used an escrow service in my early freelancing days to manage the financial relationship with clients.
One client tried to run off with $20,000 and they got away with it. Until, much later when I found myself in a position to pressure them publicly. I got paid but it took almost 2 years to get the cash in. This was my first mistake and it was complicated by the fact that the client had been a personal friend and a part of my wider network. I wrote this off to experience.
The second time, I was ripped off for $4,000. The contract was for $5,000 but I’d failed to secure a decent deposit because the client and I had seemed to have a decent relationship. Nor had I supplied a detailed written contract. They took all the work, sent $1,000 and then ran away. When I went after them, they used the lack of paperwork against me – never again.
The third time, the client broke the contract and thought that meant they didn’t have to pay. I did have a nice written contract in place, clearly outlining what they had to do as well as what I did. It didn’t end up in court when I threatened to set my lawyer on them, they capitulated and paid up the $12,000 they owed me.
I’ve been lucky. Nearly every freelancer I know has had worse experiences.
The Freelancer’s Risk
All a freelancer has to sell is their time. When they give you their time, they cannot get that time back and use it on another project. If they don’t get paid – they can find themselves in a world of hurt.
The more competitive the freelancer’s rates, the closer to the breadline they are living. It’s that simple.
Freelancers assume a huge risk when they take on a client’s project for more than a few hours.
That means they, quite rightly, expect the business owner to assume some of the risks for the project too.
The Client’s Position: Personal Experience
I’ve just had a major project fall to pieces and after my friend and I had invested nearly $200,000. We were ripped off by a freelance programmer.
We made two mistakes: we failed to set out measurable deliverables during the project because we’d trusted the guy to get the job done and then we fell out with each other when I realized we were being ripped off and my business partner kept the guy on for far too long rather than firing him.
Now, while that guy certainly won’t be getting a reference – it really is our fault that we didn’t put better checks and balances in place too. If we’d been smarter, we’d have been out a couple of thousand dollars before we marched him out the door, rather than ruined on the project.
Yes, clients assume a risk when hiring a freelancer, but truth is – this is a manageable risk.
How To Reduce The Risks Of Working With A Freelancer
A freelancer doesn’t need to be trusted. Trust is something that blooms within a relationship where both parties meet their responsibilities on a regular basis.
These are the simplest ways to reduce the risks of working with a freelancer:
- Agree on a contract. I can’t believe how many people still work without a contract. Having said that, while I never undertake freelance work without something in writing – we were still foolish enough to hire our crappy coder without deliverables in writing. You need to set out
- Deposit – for projects under $1,000 I want all the money upfront. I know this is a risk to you but it’s too much like work to invoice for it twice and the tendency of clients to disappear is much higher than the tendency of freelancers to disappear. I’ve been doing this for more than a decade now, I’d have starved to death if I didn’t deliver. For projects over $1,000 – I normally want half the first month’s money upfront and then the balance paid before the final set of deliverables is handed over. That way the client sees something before they have to stump up all the money, but they don’t get all the work until I am paid. I do offer follow up work which I offer as part of my contract, but you can’t hold cash back for that. A freelancer that doesn’t ask for a deposit is naïve and inexperienced and you might want to think twice before you take them on.
- Payment terms – when to pay, how to pay, tax liabilities, penalties for late payment, etc. all want to be written down. Then there are no arguments over this.
- Deliverables – what needs to be delivered (be precise – if you want the work products as well as the end product, specify this), when it must be delivered and the acceptance process for any work delivered (you need to ensure work is fit-for-purpose or they need to fix it)
- Exit terms – if things aren’t going well, you may need to walk away, define how this will be done contractually, what the freelancer must handover, what you will pay as a notice period, that sort of thing. Typically a “kill fee” of the next 2 milestones on the project time line is expected for early contract termination.
- Responsibilities – I’m a writer. I expect you to read my material and then ask for specific edits/corrections, etc. that’s OK, that’s how this job works. I also expect you to do this within 7 days unless we’ve agreed otherwise, or the work is counted as fully accepted. That’s because I have to book my time against the project. If you don’t do what I need you to do, I can’t do what you need me to do. Get all this kind of stuff on paper.
- Intellectual property – make sure you assign the ownership or licensing of any work product in the contract. If you don’t then the freelancer may well own everything even though you’ve paid for it. Seriously.
- Anything else you can think of. You can’t be too specific in a contract when it comes to the details. It’s impossible for somebody to say “I didn’t know that” if it’s in the contract.
- A process for amending the contract. I write one contract for a client relationship and then we add new projects, etc. to that contract. It saves on paperwork and means that we can spend more time working on things that matter and less time on contracts.
- Take a reference (or two). Look, if you want to talk about a freelancer’s skills then all you need to do is talk their previous (or current) clients. Most freelancers will have a couple of people that they’re happy for you to call and talk to. Now, this is not a perfect way to vet someone, but it helps and if there are things you ought to know – you may well find they come out in these conversations. Do prepare for these chats though or they tend to end up being, “Yeah, they’re great. Really great. Cheers. Bye.”
- Trust your gut. If you have reservations about the individual even after seeing their portfolio, interviewing them and talking to their past employers – move on and find someone else. There are always plenty of competent people out there – employing someone you feel that you can trust is always a good place to begin.
A Harsh Truth
Things can and will go wrong. Even the best freelancers have off days. Even the best clients can be a complete pain in the bum on a given project. This is OK.
The trick is not to do what we did with our coder and let things do on and on. When things start to go wrong have a conversation and address your concerns with the freelancer.
If this doesn’t work, then hit the exit clause button on the contract and let them go. Yes, you will occasionally take a loss on a project – this is the risk any employer takes too, but you can limit that loss by taking action fast.
A freelancer needs to be treated with kindness and respect, but they are not an employee and if things aren’t working out – pay them what’s owed and let them go.
“Can freelancers be trusted?” Some of them can, yes. Some can’t. The trick is not to base your business relationships on trust but rather to base them on a written contract. Trust can then come over time as the person delivers on their contractual obligations.
When things go wrong, though, take action and make it decisive. You don’t need to get tied up in micro-managing a freelancer, they are not an employee.