
Ask HN: Freelance Client Capping me on Hours – how to handle? - wayzz
HN,
I&#x27;m recently begun working with a startup for about 3 weeks now.<p>They originally paid me for a week&#x27;s worth of work, its now been (2) weeks - and pay day again.<p>I sent them my hours for the past (2) weeks (1 week at a time after each sequential week).<p>They now are complaining that they wanted each &quot;task&quot; to take only 2 hours to complete. (2) tasks were over (2) hours (one 7 hours, and one 3 hours).<p>How do you deal with clients like this? Are client&#x27;s that refuse to sign your freelancer contract (when you knowingly sign their contract) a red flag?<p>Do you typically insist on your freelance clients signing your contract?<p>Thanks!
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patio11
Clients having their own paperwork is normal. It will get even more common as
you go upmarket.

Clients believing meaningful development work can happen in two hours is not
normal. You should stop billing by the hour, change your minimum increment to
a day or a week, and assist your clients in making the transition from
"micromanaging every hour of wayzz's time" to "letting wayzz handle the
specifics of how he delivers the fantastic value promised in his Statements of
Work." It is possible this client will not make that transition with you.

Also, charge more.

~~~
ekidd
I agree strongly with patio11. I have a simple rule:

1\. Programmers are the final authority on how long a specific piece of
functionality will take.

2\. Clients are the final authority on what to build, in what order, and how
much money it's ultimately worth to them.

In general, clients who insist on negotiating (1) are often unsalvageable.
It's better to structure the relationship so that this never comes up at all.

But if a client continues to insist, "No, you should be able to implement our
video encoding server for $500," I find that the best response is, "If you
have another programmer who can do that for $500—and do a good job—then you
should hire them instead of me. That's a remarkably good price."

Basically, learn to qualify your sales leads: You want to work with competent,
reasonable clients for whom you can earn a lot of money. Everybody else should
be filtered out of your sales pipeline as quickly as possible.

~~~
patio11
FWIW: You can probably 10X your rates if you take responsibility for what to
build, in what order, and how much money it's ultimately worth to them.

Otherwise, broad agreement with your comment.

------
tptacek
If you're going to consult professionally, take the time to write a statement
of work for every project you undertake. If it's worth spending a day on, it's
worth writing a SOW. If it's not worth spending a day on, don't do it.

The typical contractual form a consulting engagement takes is a one-time
master services agreement that establishes all the terms and conditions under
which you'll work (this is usually the client's paper), followed by a series
of 1-page SOW contracts as projects come up.

Each SOW specifies:

* That it's being done under the master agreement

* The nature of the project being done (it's to your benefit to keep this somewhat abstract)

* The acceptance criteria, if any, for determining completion

* The pricing used --- here you'd establish, for instance, that the project is being done on a T&M basis, expected to take N days, and that you'll obtain written permission should the project take longer.

You should be doing this on _every project_ you run.

------
social_quotient
Start back at the estimation. Who or how do they think its 2 hours?

I suggest to offer to "backlog groom" these estimates so the person that's
actually going to do the work is providing the estimate. You can fairly be
managed this way.

If they don't like the estimates, welcome input or clarification. Take a
collaborative tone here.

Start the conversation of this new approach by saying something like. We seem
to be drifting apart on hours and expectations. I have come up with some
strategies with my colleagues and would like to propose...

If this doesn't work - time for a new client. If you need the cash and can't
just quit. Make sure expectations are clear at all points in writing when you
have warned them of the estimate and the actual hours. Keep this in the
freelancing platform so you have room for debate if they stuff you on hours.
Finally get approves on the tasks after you estimate. They might not have the
money - they need to come to terms with this at each 5-7 hour block.

Good luck!

------
dognotdog
YMMV, but this is my experience so far:

The your contract / their contract thing doesn't worry me, I've never had my
own standard contract to begin with.

Bigger clients usually have a standard contract, but it is negotiable to some
extent. Some potential clients had two hundred page standard contracts where
you're supposed to sign away the soul of your firstborn child, and even if
those are largely unenforcable, I'm not going to sign it. (If the client isn't
willing to budge on this, it'll just get worse later on)

Small clients I could visit in person, I've worked with single page contracts
and a hand shake, to no ill effect so far.

I'm wary of small companies with big contracts, those tend to be the ones who
take the first opportunity to screw you.

Also, I am always up front about estimates, making it very clear that it might
take longer or shorter, and the smallest group of tasks I'm willing to give
estimates for is a single day's worth of work. If I had to confer with the
client every time some piece of work slips a few hours, I'd never get to the
actual work. Also, there might be significant overhead attached to any little
task, or simply overhead that cannot be assigned to any particular task, such
as keeping documentation and planning up to date, which is invisible to the
client if the work is broken down into too many single tasks.

For fixed deliverables, I give the client an estimate on the number of days
it's gonna take, and we make a contract for that many days to work on the
project, with the option to extend the contract at the same daily rate, should
the need arise. If the client insists on the fixed deliverable being the
subject of the contract, then it won't be a fixed sum of money or number of
days; they can chose which way they want it, but can't have it both ways.

------
IgorPartola
I do not generally insist that people sign my contracts. This is a bad sign.
The logic of "each task should take no more than 2 hours is flawed". You can
easily combat this by breaking up tasks further into subcategories. In fact,
that is generally a good idea for tasks over 8-16 hours when creating
estimates. So there are things you can do on your end.

Having said that, I would give them a call and explain politely that you are a
professional and your work is worth what you are billing them. If they are not
going to pay you, then you will simply stop working for them (assuming you can
afford to do so). You can even say "if you cannot afford to have me work X
hours, that is one thing. Let's talk about that. But otherwise initially you
agreed to pay X for Y. I delivered the work, and you are not paying. Why
should I continue working with you?"

------
dctoedt
Most lawyers get to see this movie from time to time with their own clients;
the bar has developed some folk wisdom that gets preached at continuing-
education conferences and in bar-association publications. _(Usual disclaimer:
Don 't rely on the following as a substitute for legal advice, YMMV, etc.)_

1\. If you signed the client's contract form, that likely is what governs;
it's unsurprising that they don't want to sign yours, because that could lead
to confusion if the terms are inconsistent.

2\. [EDITED] It's super-important to put task expectations in writing, UP
FRONT, even if just in a quick email, in part because:

(a) Putting expectations in writing will help you keep the client happy about
your results. Whether or not the client _should_ be happy is of less
importance than that the client pretty much always gets to decide:

(i) whether to hire you again, and

(ii) whether to recommend you to others.

(b) If a dispute arises later, it's easier to dissuade the client from
behaving badly if you can show them a writing to which (you can argue) they
previously agreed, even if only implicitly.

(c) In the (unlikely) event you end up in litigation, courts tend to give more
credence -- other things being equal -- to contemporaneous written
documentation than to after-the-fact witness testimony. Courts realize that
memory is fallible in the best of circumstances, and also that witnesses can
have axes to grind, scores to settle, agendas to advance, etc.

3\. It's not unreasonable for a client to want to cap what they pay for Task
X. It's a different question if they want to do that after you've already
finished Task X on an agreed per-hour basis.

4\. To get a better "estimate of the situation," you might want to consider
whether you're really an independent contractor, or whether instead you're an
employee and thus entitled to certain legal protections (which can vary
depending on where you are). [1]

5\. [ADDED:] I agree with the commenters who suggest having a tactful
conversation with the client in a collaborative tone.

6\. If you still have problems going forward, you need to think seriously
about whether to continue working for this client. Some clients just aren't
worth it.

[1] [http://www.irs.gov/Businesses/Small-Businesses-&-Self-
Employ...](http://www.irs.gov/Businesses/Small-Businesses-&-Self-
Employed/Independent-Contractor-Self-Employed-or-Employee)

------
lgleason
We usually have a higher rate for clients who want to use their own paperwork,
and that is only if it is close enough to our own to provide us with adequate
protections.

Obie Fernandez has some great freelancing MSA and SOW templates that we based
ours off of.

I have seen too many contracts from clients that have provisions that will
make it difficult to contractually collect on late and non payments. Because
of that we usually require that we use our agreement, but then write it so
that it is fair to both parties.

------
acoyfellow
You guys need to have your expectations outlined up front. You shouldn't be
hitting them with a bill they don't understand. That is your opportunity to
explain (because your the expert they hired) to educate them as to why your
hours needed to be more than two on a task.

If you do explain this and you soothe their minds out, they will thank you and
respect you even more. If they don't then fire them.

Biggest tip ever you can take away? Stop calling yourself a freelancer. Step
up to a tech consultant. People treat freelancers and consultants differently,
even if the work is exactly the same. Act accordingly, and use this to your
advantage. There is no teacher or boss to tell you must be a freelancer.

~~~
wingerlang
Is there some term that lies between freelancer and consultant?

~~~
acoyfellow
What is there to be afraid of? I don't think anyone should call themselves a
"freelancer". It just devalues you. And, when starting your own business: you
don't need permission from anyone else to "call yourself something".

Call yourself a "Wordpress Consultant" for example, if you are a WP dev.

------
mocko
You have a bad client. Fire them and move on.

------
sachingulaya
Today my freelancer engineer billed me 180 hours despite not having a
deliverable prototype. I was shocked. I paid him. When does work ever get done
on schedule or within budget? Rarely.

~~~
lifeisstillgood
How many times in that period did you sit down with him and review the work
done to date? How many milestones on the way did you agree with him and how
many has he completed?

How much of the prototype is "I have an idea in mind but have never thought it
through but know what I want it to look like" and how much is "written / drawn
wireframes and explanations that have then been reviewed and planned with the
two of us"?

I cannot feel too bad for what is over a months highly paid work that you did
not have control over. If you did have control, why did it take 180 hours to
kill it?

~~~
weaksauce
why do you think they are planning on killing the work?

~~~
lifeisstillgood
the comment something like "180 hours ! no prototype! WHy should you guys get
away with it!" indicates to me either ending current contract or whole
project.

~~~
weaksauce
I figured the part in their next sentence was being somewhat ok with moving
forward: "When does work ever get done on schedule or within budget? Rarely."

------
BSousa
Ever had a chat with them and change the work arrangements from freelance to
contracting?

This way they pay you a fixed sum per day/week, and you can give them updates
on the tasks as they go, without having to fight over 1 hour for this, 5 hours
for that, 3.5 hours for the meeting where you end up spending 1/2 time talking
about your daughters engagement.

As for the contract, depends, some companies have standard contracts that were
done by their lawyers that protect the company (read it carefully) and prefer
not to have to pay a lawyer again to read and validate yours.

~~~
wayzz
"refer not to have to pay a lawyer again to read and validate yours" I could
totally see why this is why they didn't want to sign it.

------
ilaksh
If you think you can negotiate to get some of those hours they don't want to
pay you, then do. If you think that trying to get them to pay that will cause
them to refuse to pay, then don't.

Basically get what you can out of them and get a better client as fast as
possible. If you can't fire them immediately then obviously get another client
first.

------
nextweek2
The capping issue sounds outside your original negotiations. Surely you could
agree to this if you factored it into the rate you charge.

Everybody has to make a living, if they want you to absorb the risk, then you
can charge a higher fee. That common business practice.

------
opless
Like most people have said, it's a bad client

Also watch this: [http://vimeo.com/22053820](http://vimeo.com/22053820)

------
edgeman27
If one party refuses to sign the contract that is a bad sign from day 0. What
are their reasons for not signing it, out of interest?

~~~
wayzz
I thought it was a red flag too - but they had promptly paid me the week
before (for week 1) with no problems. Their reasons for not wanting to sign it
were "we have a standard agreement that all "freelancers" sign and we don't
sign separate contracts as we have investors"

~~~
mallin
"I have a standard agreement that all my clients sign. If you aren't willing
to sign it, here are some other freelancers I can recommend."

~~~
wayzz
Great point, noted for next time for SURE!

~~~
song
I would first read the agreement they want you to sign though. If it's not bad
and you can live with it, it's sometimes worse it to compromise. Some of the
bigger clients cannot be flexible on contracts.

Of course, one important thing is too decide how money you're willing to risk.
If you're not willing to risk more than two week's worth of work, then bill
them weekly so that you can act quickly in case they decide to stiff you.

------
bluewolf
I've been contracting for about 8 years now. Your client is trying to stiff
you. It will only get worse from here.

Get out while you can, but still try and collect on money owing - even if it
takes you a year or more.

