I don’t do contracts.
What I mean is that all of the agreements I make in my business are pretty much based on a handshake. No legalese required.
Ask any lawyer, and they’ll say that’s a risky strategy.
I actually did hire a lawyer one time to create a contract for me to use in a previous business. The experience was ridiculous. I’m sure he was a good lawyer, but to go to him and ask for a “contract” was like opening up a bottomless can of worms.
When I spoke with him, it sounded like it might take about 40 years to address any and every potential situation I might encounter in my business. And even then, my “safety” couldn’t be guaranteed. Funny, but no thanks.
The reason I bring this up is that I sometimes see “contracts” mentioned on sites for freelancers and independent professionals. They talk about them as if they’re necessary to run a business and be successful.
If you’ve actually been on the street for any length of time, you realize that contracts are often worthless.
Let’s say you have a slow paying client who owes a balance of $10,000.
How much do you think it’ll cost to pay a lawyer to (maybe) recover that balance? A nearby lawyer we’re using for an unrelated matter has a normal rate of $350 an hour. So it wouldn’t take too long to eat up your $10,000.
Not to mention the time and attention it takes to monitor the process. Attention you could be directing towards the acquisition of more profitable clients who actually pay.
Here’s what I do to “protect myself” with my clients:
I often have a signature spot on the proposals I send out. Or, if a proposal isn’t necessary, maybe on a 1-2 page Letter of Agreement. The main point of these documents isn’t that they are legally binding (I doubt they are), it’s more to make sure there is full understanding of the project, responsibilities and measures of success.
I know the law probably says somewhere that if I have a contract then I have some legal standing to pursue a client who breaches that contract.
But frankly, life is too short to work with a**holes, so I’d rather move on and not get entangled in a battle that does nothing but create a new name on the payroll.
Here’s why I think contracts are a waste of time for most independent professionals:
Because they are based on fear of loss… based on protecting all parties involved.
That’s just not how I live my life or my business.
I don’t live in fear.
I don’t live in fear of being screwed.
I don’t live in fear of losing out.
I don’t live in fear of my client taking advantage of me.
I don’t do it because I think it’s downright unhealthy.
The law is opinion in my book. And I’ve seen or heard about too many examples where the law is basically useless when it counts most.
Plus, I’d rather work on paying ME than a lawyer. No offense to lawyers or anything.
If I don’t trust the client enough to work without a contract, then I don’t work with them.
In about 4 years of doing this business, I have had one situation where I called upon a lawyer to send a little nastygram regarding money that was owed to me.
The letter was sent, my payment was received.
That’s about as much time and effort as I’m willing to put into it because it’s just easier to move on.