Freelancing
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Jul 13, 2015

How a design contract can help you manage clients

Discover the key to happier, healthier client relationships.
Good client relationships brim with lively banter, crazy stories, and friendship. Bad ones bring headaches and stress. You know the kind. Clients who take ages to pay (or never do), make unreasonable demands, expect endless rounds of revisions, or keep trying to expand the scope of the project.

Thankfully, a good contract can make even the most difficult client much easier to deal with. For the most part, it’s all about setting the right expectations, and sticking to them. Let’s see how.

Put it in writing

First and foremost, you have to put it in writing. Yes, it’s nowhere near as fun as getting to work on your ideas, but it is a lot more fun than wasting your time and losing a client.

A well-written contract protects both you and your client in case there’s a disagreement, a speed bump, or a major problem. It also lays everything out on paper so both sides can weigh in and make sure what’s most important to them is understood and addressed. We’re not going to give you legal advice here, but we are going to cover the high-level bullet points and why they’re so important.

Pro tip: Never reinvent the wheel. Find and customize a contract template to keep things simple.

Here’s what you need to consider before starting a project:

Timeline and milestones: Define how long the project should take and when specific elements are due. If there’s wiggle room, make sure to spell that out too.

Scope of work: Clearly detail what you’re making so it’ll be obvious if/when the client tries to expand scope.

Compensation: Be clear about what you’re charging and when you expect to get paid.

Late payment penalties: Prevent late payments before they happen by defining the consequences.

Conditions for additional work: Lay out what happens if you agree to expand scope, including how much notice you’ll need, and how to handle revisions to your timeline and compensation.

Possible conditions for unforeseen circumstances: Speed bumps and roadblocks happen, so plan ahead for possible changes.

Maintenance: Define how you’ll handle small changes and updates once the project is delivered, including how much you’ll charge, if anything.

Your business hours: Let the client know when they should expect you to be working and when it’s okay for them to reach out.

A few of those warrant expansion, so let’s dig deeper.

Scope of work

This section of the contract should detail exactly what you’re doing for the client. This can vary widely, but here’s an example based on a client who needs a restaurant website:

- All pages (or features) of the site: landing page, about page, contact page, menu page

- Additional versions for devices: tablets, phones, etc.

- Number of design revision rounds: note that additional rounds will require a contract extension, and consider defining what the terms of that extension will be

- Graphic/visual design work: logos, icons, or graphics

- How designs will be converted into a functioning site—if you’re working from mockups (but we always suggest prototypes)

- Hosting: how’s this site getting online. Do they expect you to keep it up for them?

- Maintenance, if any

Be explicit when defining the scope—for both you and the client’s sake. It’s all about managing expectations.

Proposed timeline and milestones

Detail how long you expect the project to take, and define milestones along the way. This adds transparency, gives the client something to look forward to, and helps keep you organized and motivated.

Be honest with yourself when setting a deadline. It’s all too easy to let your desire to please your client override all other concerns and deadlines. Just remember that you have a life outside work, and don’t forget Murphy’s Law: anything that can go wrong, will go wrong.

It’s worth remembering that you’re the expert here. You know how long it takes to build an entire website—your client probably doesn’t.

So add some buffer time to your estimates. It could save you some embarrassment, and it will definitely help your client set realistic expectations.

Note: This isn’t an opportunity to quote low and promise high to try to outbid other designers. Dishonesty will only lead to arguments and animosity later on.

Compensation and payment schedule

Before I wised up (a little), and started using contracts and implementing late fees, my clients often took months to pay me—despite me sending over a new invoice every two weeks. To prevent this, always detail your payment terms: how much, when it’s due, and how to pay you.

First, you’ll need to choose how to bill them. You have a few options:

Hourly: Ideal for short-term or infrequent work. Even if you opt to charge a flat rate, it’s easiest to base that rate on your desired hourly income.

Flat weekly rate: You charge a fixed rate based on the number of hours you’re able to work per week and your hourly rate. This can help keep you honest—i.e. working—but beware of overtime.

Flat rate per milestone or project: You charge for completed chunks of work, based either on your hourly rate or an industry standard. Clients often prefer this since it’s easier to budget.

Don’t forget to specify how you want to get paid, whether it’s by check, PayPal, Venmo, or Starbucks gift cards. Keep in mind that some payment methods charge the receiver (you) a fee, so ask your clients to use low-fee options with lower fees (wire transfer, check, PayPal without a credit card), or build the fee into your rate.

You need a retainer

Don’t worry—I’m not taking a jab at your pearly whites. A retainer is just a non-refundable down payment. It reserves your time, and helps you cover any non-refundable expenses that might crop up, such as design assets. It also covers you in case your client changes their mind, vanishes, or refuses to pay you. They’re most common for flat-rate projects.

Late payment penalties

Defined due dates and late payment penalties are the best way to ensure you get your money on time, or at all. I usually add these two payment conditions to my contracts:

Payment is due within 14 days from the billing date

For every week past the due date, there will be a late-payment fee of 10% (or more, though 50% is the usual maximum)

These stipulations will often get clients to pay within a couple days of getting an invoice—sometimes even instantly.

If even these methods don’t work, you may be forced to sue. But that’s an expensive, stressful, and unreliable option. Thankfully, having late-payment penalties in place can give you a way to avoid litigation altogether by offering to drop the penalties if they pay now.

Note: Just because someone is slow to pay you doesn’t mean they’re vindictive. They might just be forgetful, or under financial pressure. Try polite and respectful reminders first, and only pull out the big guns if you really need to.

Conditions for additional work

As the project chugs along, you and your client might discover needs that weren’t written into the contract. No big deal.

Just estimate the time it’ll take to complete, and give them a quote. If they approve, add an addendum to the contract and get to work! If your client pushes back at the additional charges, politely remind them of the original scope you both agreed to. If that doesn’t help, you might offer a small discount to soften the blow. Just try to keep your client happy—after all, extending a current job is easier than finding new work.

Negotiating the price for additional work at the beginning of the project can help a lot. Just be very clear as to what counts as a full design revision. Swapping out a photo shouldn’t count.

Set your hours

If your clients are anything like mine, they’re dedicated and excited (stressed) entrepreneurs. That’s awesome. You want to work with people who are truly invested in their work. But this can also mean change requests coming in at 11:59 p.m. on a Saturday … on Christmas Eve.

Remember: You don’t need to accommodate every request as soon as it comes in. Every business has operating hours, and yours should be no different—even if you’re a freelancer.

Be explicit about your availability from day one. Include your hours in the contract. It’s your time. Don’t let work consume your life.

Also, be sure to keep clients in the loop if you’re going away for a few days. Give them a significant heads up!

Treat your clients respectfully

All of this advice goes both ways—you need to treat your clients very respectfully as well. A happy client will be more cooperative, forgiving, and understanding, and will keep coming back. They’ll also spread the word to their friends.

Find the clients who make you smile

Remember that you choose your clients.

Instead of battling with a client who stresses you out, spend your time and effort on the clients who put a smile on your face. A great client can be a friend—and a source of work for years to come. Even if they pay a bit less than the next person, it’s worth it for your peace of mind.

Ever had a client relationship go sour? How did you deal with them? How do you prevent the same problems now? 

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Neal O’Grady

Freelance designer, traveler and all-around web guy.

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