Here’s my New York Times story today about dealing with the bane of business, and one that is getting much worse in this recession — clients who refuse to pay you, now or ever.
Like many of my article ideas, this came out of my own costly experience last fall. First, an out-of-state, privately-owned start-up publication abruptly cancelled $20,000 worth of work, then tried to stiff me out of $5,600 for my work already in, accepted and invoiced for. Two months later, an in-state regional publisher sat on my check — my story already in the magazine, already published — for months, essentially thumbing his nose at me in emails.
My favorite read: “The squeaky wheel doesn’t get the grease.”
At least they were answering my calls and emails. My solution, in both cases? Attorneys.
I found the first one — unusual for me, then very new to social media — through LinkedIn. I posted a simple request: “I need to find an attorney in X state to sue a deadbeat client.” I heard within hours from an attorney in San Francisco, referring me to someone he knew in the city where I needed help. Within a day. I’d hired a collections attorney; many other freelancers who had sold writing, photos or illustrations to this magazine, some of whom I was in touch with, said they preferred to be patient. I doubt they got a penny. Six months later, I got 50 cents on the dollar, minus 1/3 to the attorney. Better than nothing.
As for the New York loser, I turned to a friend I play softball with, a local attorney. His letter to this publisher managed to get me a check within days.
1) Do your due diligence! If you are going to do business with anyone, find out whatever you can about their current financial situation and their reputation for payment. I’m on the board of the 1,400-member American Society of Journalists and Authors, and we have several mechanisms available to our members to help them recoup their payments and, perhaps most crucially, warn others away from trouble spots. Use any legal or ethical means necessary; anyone who’s recently done business with them (fellow members of an industry association or listserv) can help.
2) Don’t just wait if payment is late. I know one young writer who waited (!) almost a year for her money from a major New York publisher. Call, email, call and email, however politely. You’ve earned your income and you have bills to pay.
3) Use prudent caution if you choose to work with/for a start-up, a family-owned business and/or one that is out of state. All these can be red flags.
4) If you fear your payment isn’t going to arrive, look into small claims court or a collections attorney sooner rather than later. It takes time.
5) Document every deal: emails, contracts, faxes. You need proof there was a deal.
6) Do whatever you can to keep three months’ expenses in the bank, or a line of credit at a decent interest rate — which is also harder to get these days — as backup. Your mortgage, rent and other bills will not wait for these deadbeats.