client not paying – need advice!

[Brendan Coots]

“I was thinking of sending her a letter – stating that her final disc will be released upon final payment; AND that any use of ANY graphics I created for her is forbidden until final payment is paid. “

That would be a retroactive contract and, like all contracts, without her signature of agreement it would be thrown out by any judge before they even read it. It’s a waste of your time.

I would, however, immediately send her a certified letter containing a Cease and Desist Order (if you can’t afford a lawyer, here’s a standard C&D that can be modified to your needs) covering all the materials you provided to her. This is legally binding since you CAN prove you created the works and own the copyright. If she continues to use the materials after receiving the notice you can sue for much more than the $450 she owes you ($150,000).

Even if you have no plans to sue, this is smart business to preserve your rights and remove the “doormat” sign from your back.

Brendan Coots
Splitvision Digital
http://www.splitvisiondigital.com

[Bill Davis]

DeAnna,
This has clearly been a huge learning experience for you.
It’s also probably been a huge pain in the butt for you. Particularly since you note that the money you’re NOT collecting is important to your family.
So the plentiful advice you’ve been given here is an excellent foundation for considering and re-thinking some of your business practices so that you’ll have less of this kind of thing to deal with in the past.

However, I’d like to address a different area that these things bring up.

What this circumstance and – equally importantly – your reaction to it – will do to your reputation and your business outlook in the future. Yes, it’s true that no business person wants to be seen as a “pushover” who won’t go to bat to collect what’s due. It’s equally true that few business people want to be seen as heartless scrooges who’s first and primary thoughts are ALWAYS about the money.

I’m not going to tell you which end of the spectrum is best – or even best in this unique situation. In fact, in my experience, the spectrum shifts based on a lot of variables. Perhaps a client will stiff you and you’ll learn that they have plenty of assets to use to pay the bill. These people ratchet UP the desire to collect at all costs. Perhaps another client will prove to be someone who’s great idea truely crashed and burned – leaving them struggling to pay even their small bills. This *might* cause you to look at their situation and be more lenient. Or not.

The important thing is to stop for a while and think about what kind of business person you wish to be. Where will you position money in the range of importance available to you? Would you want that last $500 if it shifts serious burden from your kids to the client’s kids? How much?

Again, I’m not advocating a position here. Just noting that most of us entered business thinking that it would be fair, equitable, and we’d be dealing mostly with others of equal moral compass. And we discover that this is not always true.

Personally, I think the lingering hurt you’re feeling about being treated poorly is the MOST valuable part of the whole exercise. And it’s instructive that when hurt, some hold grudges – others forgive.

What’s important is to find YOUR way to move on as quickly as possible – feeling OK about your response – and returning your focus as quickly as possible to efforts that can grow your business – the action that will ultimately do more to “heal you” than spending the next 3 months digging after this old debt. Maybe.

Good luck.

[Bill Paris]

DeAnna,

Great advise from everyone. I would just like to add a couple of thoughts.
1. Make sure your communications are all in writing from this point on. Perhaps send an email outlining the steps you will be taking…. (ie. All materials relating to the project will be retained until payment is received in full…..)
2. Be professional. State the facts, not emotions.
3. Like everyone else is advising you…. let this one go!

You may be surprised, your client may need the rest of the project or portions of it and be forced to pay in full. If they do….. complete it professionally and keep the door open. You never know how these situations can turn out in the long run!

Good luck!

Bill Paris
Crew Hawaii Television

[Deanna Villalobos]

Thanks to all who have responded – I really appreciate all of the sound advice.

Although I do agree with the idea of not wasting negative energy on this “grinder” – I am still in the Fight Back mindset at this point and am willing to do what I can with minimal focused energy.

Brendan – thanks for the link to the Cease letter…I am taking a look at using that now. My last concern at this point is offending the client – I just want to wrap this thing up the best way I can with minimal loss.

I am finished trying to call her – I will be writing her via email and by post. We’ll see what reaction I get – I’ll be sure to let you know! Going to try the C&D letter, plus give her an option of payment.. I’m even willing to offer collateral, so it’s not like I havent been offering alternate routes, which is more than most would do. She has refused, so I’m taking the next step… we’ll see!

thanks again,
DeAnna

[Kenton Vannatten]

“Of course the flip side of this, which I’m sure is true for many of us, is working with reliable long-term clients where the expectation is NOT an advance deposit rather periodic or project billing on a regular basis which is paid within normal prescribed terms, ie- 30 days net“

I can’t believe the irony of my reading this thread today – maybe it’s the time of year?

I’m in a very similar situation with a client that I’ve done a number of projects for in the past. I have always billed my clients at the end of the week for the work performed during that week and have only ever asked for a deposit/Contract from new clients. So, the first invoice for the latest project came due on 7/20 – no payment was received. So, I waited another week, and sent a reminder on 7/27. 8/3, still no payment. Now it’s over 14 days past due and I emailed again. The client responded, that money is a little “tight” for them right now and that the sooner we finish this current project, the sooner I get paid. Needless to say, I was very frustrated with that.

So, now I’m wondering at what point does one start billing late charges for long-standing clients? On my invoices I say that “if payment is not received by the due date late charges may be applied to the overdue balance”, and I’ve only once ever had to resort to actually charging late fees to a deadbeat client who went incommunicado and took over 6 months to pay.

To make the situation more complicated, this same client who’s money is tight (who’s money isn’t tight?) has booked me on another project already. I certainly don’t want to turn down the work (well that is, if I’m to be paid for it – lol)

Regarding DeAnna’s situation (to avoid my question from appearing like I’m hijacking the thread): It may be better actually to keep the communication via email that way (as others have stated) you have a document of what was said and when. Just remember to keep your responses professional and fact-based at all times. It’s easy to want to vent and finger-point the client’s faults, but it would be in your best interest to maintain your position of what is owed to you in as professional manner as you can. Most times, the client knows that they are stiffing you, hence the avoidance, if you keep stating the facts of the project (what was done, when, how much was billed/paid), then eventually (hopefully) the client will realize that you are serious and you’re not going to back down.

A couple of years ago I started working on a project that quickly went south with the producer/client. He had 75 hrs of footage that he wanted cut into a documentary, we agreed on 8 weeks (for rough cut) and I quoted an amount. I got a deposit on that one and started digitizing all 75 hrs of unlogged material. After two weeks of digitizing, I had enough material that I thought maybe I’ll cut a scene together and send it to him. I got a frantic call within minutes saying that he wasn’t sure what I was doing the past two weeks and that he thought that I would’ve been much further along than just a 3 min segment (he also made sure to tell me that the segment I cut had nothing to do with the piece he envisioned – nice) So, he tells me that he wants me to stop work and that he’s going to find someone else because he’s already missed deadlines for two film festivals, etc etc. I said, “I told you 8 weeks for the rough cut – you would’ve missed those deadlines anyway.” He wasn’t having it.

So, I sat down and calculated a pro-rated amount for the 2 weeks I had done based on the original contracted amount minus the deposit. I invoiced him and agreed to deliver his tapes back to him. He called me and very angrily told me that there was no way he was paying “$xxxx” for just capturing. I explained the contract terms, that he chose to terminate the contract and that I was pro-rating him for 1/4 of the total amount. He didn’t get it and was refusing to pay. Eventually he emailed me and I just kept the tone serious and stated facts and terms of the contract. After about a week or two, he agreed to pay the amount – I’m assuming because he realized he was obligated to via the Contract. The kicker is that he tried to screw me again when I went to go meet him in person to pick up the check (I wasn’t having the “check’s in the mail” story from this guy) – He tried to say that the amount of the invoice was a considerable amount lower than what it really was…. luckily, I had printed a copy of the invoice and contract prior to going to meet him. It was a very nice victory.

Sorry for the long diatribe there – the point is stick to your guns if you know you’re right, keep it professional (even if they stoop) and hopefully it will all work out for you. Good Luck.

Kenton VanNatten
Avid Editor (for hire)

[Max Baker]

A lot of good advice. My initial thought, which you mention but is not deeply pursued in this thread, is your copyright to the product, i.e., when it transfers to the client. She could claim that it is hers as you were retained to create it on her behalf, but as you point out, you could argue that it transfers on full settlement. I like the idea of the cease and desist letter. I, too, would recommend moving on, but if you are rabid about pursuing this, like on a vengeance scale, small claims court is probably your only venue. You never know, just the summons may prompt settlement. You’ve certainly exhausted the direct communications approach. Also as pointed out, you have to take into account the goodwill aspect. How likely is this to impact your brand name in the future? Someone already framed out some basic concepts for ingredients of a contract; I would add a clause that states when the copyright transfers. That’s a lot of leverage, since they can’t use your product commercially if they don’t have the copyright, which reduces their enticement to stiff you.

Good luck!

Max

[Sutharsan Bala]

Sorry to hear about your predicament. I’m a recent filmschool graduate and I’ve just gotten my first job. It’s doing a documentary for a firm in my town. This is not a film company, and they don’t (as always) have any money for the project. Regardless, I’ve been very stringent about the contract, and signing it, and we’ve been negotiating it for almost three months now (with summer vacation in between, some time was taken off discussing the issue).

To get back to your post – I recommend you join a union of some sort that offer legal assistance and / or financial help. I joined a union right after I was offered this job and my union has helped me a lot concerning what kind of pit falls to avoid and what things that I should remember to have in my contract. ALWAYS make a contract for your work. You probably know this by now.. 🙂

As for copyright etc. You are ENTIRELY entitled to the copyright of your work if you haven’t signed anything that says otherwise. In other words, you have a pretty good case concerning her using your work. I’d def. use this as a leverage. You’re entitled to your money and you HAVE TO go and get it. So I’d suggest you hire a lawyer, or join a union (my union has legal services for free) – and tell her that. You tell her that you will be forced to take legal action unless she is willing to sit down and communicate with you like an adult. You’ll see that as soon as you involve authorities, things usually have their own way of working out.. 🙂

All the best to ya!

-n0c-

P.S – Remember, just because it isn’t copyrighted don’t mean you don’t OWN the copyright. She could be facing a lot of costs if she is using your work for her own benefit. You HAVE TO use this to your advantage.

“Two things are infinite: the universe and human stupidity; and I’m not sure about the universe.” – A. Einstein

[Chuck Green]

There are many great responses here, and I want to address a different part of your issue. The project started off simple (small?) you state; I have found that clients tend to lock in their minds the lowest rate first mentioned, even though the scope of work may grow significantly. It is important to keep them aware after things start to expand that the project is now larger, that they have enlarged the scope of work, and that new scope of work is what is now being billed for. Do this repeatedly over time as you communicate with them!

Similarly, if in your initial discussions you say the possible price range will be $ 4,000 to $ 7,000, they will likely be holding $ 4,000 in their minds from that moment on, while you might be thinking $ 7,000, whether the scope of work stays the same or expands.

[Jeff Bonano]

This really has become a group effort!

DeAnna,

Again, a full agreement is made with everyone here plus with what you are shooting for. As a creative artist myself, I have been in this situation too. I’ve lost a lot when I first started, and have found that my “written production agreement” (I avoid the word “contract” because it can put a scary thought in some peoples eyes as a paying customer) is often updated to cover my butt when a client finds a loophole in it. Starting now, I would say type up an agreement that you can use BEFORE you look for that next client. Read it over and over, then make adjustments. Put a revision date at the bottom too so you know that if you make changes, you are always using your most current agreement form.

With that said, the rights to your work can be preserved if you can prove to the court that you have the original work. (Not necessarily the most current work because if that was the case, then I could ask to borrow what you have so far, spruce it up even more, and claim to be the owner of all the rights….which isn’t how things work) If you have anything with original dates or documentation that she doesn’t have, then you have a better chance. With that in mind, if you can produce anything that shows you have the original rights to the work you have done, you could be a sport and offer her the chance to pay in full in order to receive a written license agreement from you that grants her the right to use your work commercially.

Now I do have to say, that these tactics may not be the best route to go and as mentioned by others may have some side effects on how you look in the business world. But with how determined you seem to be without the tool of a written agreement in your arsenal, the only way I see you having a fighting chance is to either be patient, wait it out, get other clients and income in the meantime….or be down and dirty, and fight like a lawyer would.

Finally, I agree with the timecode stamping that Greg Ball mentioned. I actually add a watermark that pops up from time to time with my website or “unfinished work” in the middle as well as digimarking my work too. I hope all of the information you’ve gotten in one way or another helps you out. I wish you the best of luck with this battle whichever route you decide to pursue.

Jeff Bonano
http://www.bonanoproductions.com

[Karel Juhl]

I suspect the primary problem is she’s having trouble paying, and is embarrassed. You might try taking advantage of that: I’d write her a letter (postal mail, hand-addressed envelope with no return address will help get it opened). Tell her you understand she may be in a predicament, budget-wise, and that while you’d like to give her a pass, your family relies on your income, as well. Reiterate your willingness to accept regular payments (a year of $40 monthly payments is better than no payment at all), because “I know you would pay for the work I’ve done if you had the means to do so.” Tell her you understand that she may need to receive income from your work before she is able to pay for it, and that you can accommodate that. But just so she knows you’re not a total pushover, withhold the piece of the final product that you do still retain. This has worked for me.

Karel Juhl Writing & Editing
kareljuhl.com