Ask HN: Is it reasonable to ask a client to pay me royalties?

[codingclaws]

As a freelancer, I built a trade show system 7 years ago and I was paid $10k for the planning and build.

My client says he loves this system and he's used it at around 50 trade shows since I built it. I'm not sure how much he charges the trade show to use it.

It has minimal bugs and requires little maintenance.

Would it be fair if I got royalties or some of the profits every time he uses it?

[rabbitofdeath]

Speaking as a freelancer myself, I would be kicking myself if I were in your shoes, but I think its a bit tasteless to go back and ask for royalties now. I'd keep this option in mind for similar systems you plan on building (or if you sell the system to someone else and make it a subscription platform.)

[joezydeco → rabbitofdeath]

You might have trouble selling that same system to other clients, the first client will claim they own it. Without seeing your contract(s), the client is probably right.

If you can create a 2.0 with substantial improvements, then you might have an opportunity to shop it around and rent it out yourself. But you'll have to do all of that at your own expense.

[rabbitofdeath → joezydeco]

Totally agree - it would have to be a 2.0 version to do it right.

[b20000 → rabbitofdeath]

tasteless? who cares? this is business, and as a developer you should get whatever you want out of it.

[rossdavidh → b20000]

If you are a contractor/freelancer, reputation counts for a lot. Most sales are to (happy) existing or former customers (in this or any business). Charging royalties is fine if you said so up front/beforehand, but not afterwards. Even if you failed to make it stick, legally, you would lose a lot in reputation.

[rossdavidh]

Speaking as a freelance contract developer myself:

1) normally, they would explicitly say they own the IP to what you build for them

2) it sounds like they did not in this case, but you also did not explicitly say you would charge royalties

3) I don't know what the law says, but the normal way these things work is that if they paid you up front to make it, they own it, and it would give them a lot of legitimate grounds to feel ill-used if you were to find some way to charge them royalties now

4) the goodwill and perhaps recommendations from a satisfied customer, are worth more than whatever royalties you might be able to get out of them, because you probably wouldn't have any goodwill afterwards

[rossdavidh → rossdavidh]

By the way, what I have done in the past is have an ongoing agreement of a few hours per month minimum charge (e.g. 5 hours/month) for support, which is not exactly like a royalty. If they don't need any maintenance, great, you write documentation or do security upgrades or whatnot. If they need more than that number of hours per month, they pay you for it, but they agree that you will get at least that many billable hours. But, this would be something for a future piece of work, it would be hard to do it now.

[mytailorisrich]

Fair or not you agreed to be paid a lump sum for the work and you were paid so that's the end of it.

[talloo]

Most consulting contracts are work for hire where you explicitly agreed to transfer and relinquish any claim to the IP.

You should check your contract to see what it says. In all likelihood, it is unreasonable to request royalties.

[codingclaws → talloo]

There was no written contract.

[codingdave → codingclaws]

Contracts do not have to be written. Whatever you agreed to verbally is your contract. So no, it is not reasonable to come back years later and ask for more money.

But in the future, it is a great idea to add into any new negotiations.

[muzani]

Nope. Don't be greedy.

I have a client who loves something I made around 7 years ago as well, and he gives me a huge chunk of the revenue now because I've been helping him maintain it and modify it to fit new clients.

He's a good friend now. He said I do have a family and he didn't feel right paying me so little when others were charging him 20x the price or so. So he offered the fairer deal.

It's not right to change your rates years later. However, since you have the high ground here, use it to propose a new deal where you add new features for a cut of the profits.

[codingclaws → muzani]

He's asking for new features as we speak. What should I say? Do I drop the hourly rate and ask for 10% of revenue?

[muzani → codingclaws]

Ah if you're still working with him, then yeah, it's a good time to just ask if he wants to switch to a profit sharing model.

[brudgers]

A.

Fair is a two sided affair.

Ask the client.

If the client feels it is fair, then it is fair.

If the client doesn't feel it's fair, it isn't fair.

B.

The cost of collecting royalties can easily exceed the value of the royalty.

Both in lawyers and accountants and in your time thinking about whether you are due and why you haven't been paid.

C.

If you want to make an ongoing business out of trade show systems, build and sell more systems.

You already have a happy client.

Talk to them about other players.

D.

Good luck.

[notahacker → brudgers]

Especially C.

You have someone who likes software you've written for them and is apparently good at doing business with trade shows. Probably there is other software which would be useful to participants at trade shows he could sell more of.

Just don't be especially surprised if his answer is that whatever he charges the trade shows covers an awful lot of manual work, setting things up, contact the other parties et cetera and the software is just a small but necessary part of that.

[altdataseller]

1. It only matters what was in the original contract, it doesn’t matter what’s fair or not.

2. If you had asked for royalties in the start, you probably wouldn’t have been hired. Unless this was some problem only the top 0.1% of engineers could build, why would they hire you instead of some other person who wouldn’t ask for royalties?

3. That’s the nature of being a freelancer vs a business owner. You just built it and got guaranteed income. The owner still has to sell it and take risks to make it profitable

[b20000]

do you have a contract in writing and did you both sign it?

you should talk to a lawyer.

you can negotiate any deal you want but you will need a contract IMHO.