Illustration: Oscar Ramos Orozco

Client Relationships: What To Do When Things Go Wrong

You’ve been working hard on your latest project for a client. You’ve delivered, so now it’s time for that last payment. But after weeks of wrangling with their people, there’s still no check in the mail. Turns out, they feel they don’t owe you any money. You feel betrayed and frustrated. You held up your end of the deal, why can’t they?

One of the challenges of being a creative freelancer, and one of the most dreaded parts about being in business for yourself, is dealing with client disputes. What do you do when you and a client have a disagreement and your relationship starts to deteriorate? Let’s take a look at the options, from least adversarial to most.

1. Give it some space, then talk it out. 

Disputes between creatives and their clients more often result from misunderstanding than from bad faith. Happily, the solution is often pretty simple: communication. Put the dispute front and center, and attack the problem together.

If your client brings up a problem, restate what they tell you to make sure you’ve got it right. Ask them if they have a solution in mind, and be proactive about proposing your own. For example: “So you feel like I haven’t been responsive to your emails? I’m sorry about that. How about this: let’s schedule a daily check-in to make sure we’re on the same page and I’ll be more responsive between meetings.”

If things get heated, the best thing to do is to wait until tempers have cooled and then pick the conversation back up again. Schedule a call or meeting for the next day or two, after you’ve both had a chance to calm down.

Let your values guide you, and vocalize them when you think it will be helpful. “I believe it’s important that we treat each other fairly” can be a very reassuring thing for a client to hear even if you can’t give them exactly what they’re asking for.

2. Seek help from a trained mediator.

In mediation, you and the other party sit down with a trained facilitator who runs a structured process that gives you each a chance to talk about your issues, eventually moving to a discussion about solutions. Because conflicts often stem from a party feeling like they haven’t been heard, mediation can be very effective.

Mediation also has the advantage of being relatively inexpensive or even free. Many localities have non-profit dispute resolution programs, and the attorney directories found at state bar association and state court websites can be a good resource for looking up lawyers trained in mediation (though mediators don’t have to be attorneys). The American Arbitration Association, JAMS and Mediate.com also provide online mediator directories. 

3. Use your deliverables as leverage.

Discussion and mediation can work well when you’re trying to resolve a good-faith disagreement with a relatively reasonable client. Unfortunately, not all clients are reasonable, and not all disputes arise in good faith. So if you’ve exhausted your other remedies, you may need to take more extreme measures.

One of the toughest parts about being a creative freelancer is feeling like the client has all the leverage. After all, they’re the ones who get to decide whether to pay you, give you future business, or recommend you.

But you might have some leverage of your own. Usually this means withholding deliverables from a client pending resolution of your dispute. For photographers, this might mean delivering only watermarked images until you’re fully paid. For a graphic designer, it could mean holding back native image files. It’s never fun to have to resort to these tactics in reaction to a dispute, so plan in advance. Take control of your client agreements at the outset and structure them so that you’re keeping part of the work until final payment.   

Unfortunately, not all clients are reasonable, and not all disputes arise in good faith.

4. Have an attorney send a threat letter.

Sometimes the only language a troublesome client understands is a legal threat. Short of actually filing a lawsuit and serving a client with a summons to appear in court, an ominous letter from an attorney can be one of the most effective ways of signaling to a client that you mean business. When a non-lawyer gets a threat letter from a lawyer, they often decide it’s not worth it to hire a lawyer of their own, so they relent.

A good legal threat letter factually describes the history of your dispute, lays out your specific demands, cites relevant documents, laws and cases, and explains what action you will take next (usually filing a lawsuit) if the other party doesn’t comply. 

Of course, involving an attorney costs money. You can reduce the bill by giving your lawyer a written summary of the relevant details of the situation – essentially a first draft of the letter, which the lawyer can enhance and expand on without having to spend as much time gathering all the facts.  And, depending on what kind of creative work you do, where you live, and your income level, there might be volunteer legal organizations that are willing to help.

5. As a last resort, go to court.

When all other options have failed, there is, of course, the lawsuit. But going to court has several downsides. Most obvious is the time and expense involved. It’s also possible that you’ll lose, which can be easy to forget when you’re convinced you’re right. And even if you win, collecting money is a separate process that involves additional time, expense and uncertainty. If you’re lucky, the other party will cooperate and pay up. If not, attempts at collecting payments can drag out for months or even years. And, when you file a lawsuit, you open yourself up to the possibility of a counterclaim where the other party sues you back.

Before you consider filing a lawsuit, check your client contract (if you have one), for an arbitration clause, which might require you to resolve your dispute outside of court.

If you do go the lawsuit route, then depending on the size of your lawsuit and where you live, you may or may not qualify for small claims court, where the amount of money involved typically has to be $10,000 or less (the threshold varies by state). Small claims court has lower fees and simpler procedures than courts that try larger claims, and is geared towards non-lawyers representing themselves. 

Often, the key to winning in small claims court is being able to assemble, organize and present the relevant parts of the paper trail of your dispute. Come to court prepared with your written agreements and communications (including printouts of pertinent emails), invoices and receipts, indexed so that you can cite them at the right time when making your case.  

In the end, the most rational reason for going to court is because  you’ve tried everything else and the amount of money at stake is high enough to justify the time and expense. Suing someone on principle or simply because you’re upset is rarely a smart economic decision.

Suing someone on principle or simply because you’re upset is rarely a smart economic decision.

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It’s always unpleasant when you and your client don’t see eye to eye. But it doesn’t have to end with you rolling over and accepting your clients’ demands. Understand your options and your rights, know what you want, and look for the least adversarial way of getting there.

Remember that it’s not about winning or losing, but about finding a mutually acceptable way forward. The value of a client relationship can go beyond a single job, so keep the bigger picture in mind.

The above information is for educational and informational purposes only. Shake does not provide legal advice, is not a law firm, and is not a substitute for an attorney’s advice.  Please consult a licensed attorney in your area with specific legal questions or concerns.

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Vinay Jain

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Vinay Jain, an attorney and former freelance writer, is Chief Legal Officer at Shake, an app that allows you to create, sign and send legally binding agreements in seconds. You can find him on Twitter at @jainspotting.
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