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Legal Advice Every Creative Should KnowThe Sampler

Legal Advice Every Creative Should Know

26 November 2015,   By ,   0 Comments

The Biggest Legal Mistake Freelancers Make

Whether freelancing is something that you’ve started out doing casually with machinations of eventually quitting your job or it’s the work that keeps your bread buttered, you’ll want to acquaint yourself with a sexy little document we lawyers like to call, the Client Service Agreement (or CSA, for short).

If you are selling a service, you must have all of your clients sign a well-drafted CSA before any work begins. It’s not enough to have a Statement of Work or a handshake or a friendly conversation. None of those will sufficiently cover your rump when the excrement hits the wind-machine.

A CSA, as the name suggests, is all about your relationship with your clients, and it’s capital ‘E’ essential. If you are a photographer, designer, coach, or pretty much any other type of freelancer providing a service, it’s imperative that your clients know what to expect when working with you and what their responsibilities are in the transaction.

A well-drafted CSA not only memorializes the basic terms of your relationship with your client, it also provides next steps in the event something unexpected happens. It can prevent disagreements and confusion with your customers, which in turn can prevent all manner of assorted fuckery such as:

  • requests for refunds that destroy your cash flow for the month,
  • threats of lawsuits,
  • actual lawsuits, and
  • a former client telling everyone they know that you are the devil himself (or herself — the devil could totally be a woman).

Why we all need CSAs.

Before we get into what a CSA should contain, let’s first take a brief trip down scenario lane so you get a good idea of what I mean about covering your tuckus in case things go wrong. If we lawyers know anything, it’s that everything’s all smiles and giggles until somebody’s project is suddenly three times the size (but not three times the money), or someone else demands a full refund because the website you spent 6 months designing and building “just don’t look right.” Take it from us, whenever somebody is paying you for a creative service, where the outcome can be pretty subjective, things can get all Judge Judy real fast. People have certain expectations about the outcomes of services that they pay for (as they should), and unfortunately, sometimes those expectations are completely unreasonable. If you have your policies clearly set forth in a CSA, you’ll have something concrete to point to when someone comes complaining about the work that you produced, making preposterous demands.

But, CSAs aren’t just for governing complaints from unreasonable clients. CSAs also exist to inform your clients–at the get-go– of how your engagement will proceed, and what they should expect from the relationship. By having a CSA in place, your client has some peace of mind in knowing when, how, and at what cost you will perform your services and deliver your product. Likewise, you have peace of mind knowing that you have a legal document to lean on if their payment is late, or you make a mistake, or a hacker crashes their site.

Ok fine. We all need CSAs. But how do I make that happen?

Now that I’ve scared you into getting a CSA (we lawyers feed on fear and gummy-bears, as you probably know), here’s a list of what a decent CSA should contain, so you can draft it yourself if need be. This is just a general list of the most important points, and there may be things relevant to you that aren’t included here. At a minimum, you should make sure you include this stuff. Because, as important as CSAs are, a crappy CSA can really cramp your style.

  • How many calls/emails/meetings with you can the client expect?
  • When and how will the services be delivered?
  • When and how will the client pay you? What happens if payment is late?
  • How many rounds of revisions/edits will you do?
  • What rights to the intellectual property (and by intellectual property we mean the designs, photos, copy, marketing plan or other exclusive thing you’re creating for them) is the client purchasing?
  • How can you use that intellectual property after you sell or license it to them?
  • What happens if you discover that don’t like this client and need a get out of jail free card?

But what about all that other stuff?

Sometimes business owners look at a CSA and ask, “Do I really need all of that legalese at the end?” The answer is a resounding: hells yeah!

The stuff at the end of your CSA is called boilerplate. These are standard clauses that are often found at the end of a contract to protect you if there is misunderstanding, confusion, or just plain trouble-at-the-OK-corral during the relationship with your client. The boilerplate clauses control what happens when the parties to the agreement disagree.

You may not care for the seemingly long and unnecessary language at the end addressing things like modifications, assignments and choice of law, at first glance. But trust me, when you get that one shitstorm of a client (you know the one I’m talking about and if you don’t know then you haven’t met him yet but you will; oh, you will), you will be so incredibly glad that all of that superfluous boilerplate was at the end of the contract your client signed. That boilerplate will be your fortress when a client from hell tries to storm the battlements.

For example, the Limitation of Liability clause is meant to do just that: it limits the amount of liability you could have if an issue arises out of the contract. In other words, thanks to this clause, the amount of money a problem will cost you is limited and won’t be inflated by extra, over-the-top damages.

Recently, a client of mine who works as a consultant was threatened with a lawsuit by her customer. She had worked with her customer for 3 months, and when the engagement was over, the customer wanted her to finish the projects they had worked on together. When my client informed him that the term of their engagement was up and he would need to pay more to keep working with her, he threatened to sue her for loss of profits (she was that good).

Of course because she’s a smartypants, she had her customer sign a client service agreement before they started working together. Her client service agreement included some very helpful items:

  • It specified a term for the agreement with a clearly defined end point.
  • It included the limitation of liability clause that prevented her from being sued for loss of profits (see how handy that is?).
  • End result — with these superhero clauses, my client wasn’t too concerned with her customer’s empty threats.

By the agreement he signed, she couldn’t be sued for lost profits, and the term of the agreement meant she was not obligated to continue working with him either. She directed him to these clauses in the contract and never heard from him again. (I assume he is off somewhere trying to bully someone who didn’t have him sign a CSA.)

Another important clause in the boilerplate is called Recovery of Litigation Expenses (also known as the attorney’s fees clause which is such a better name, right?). The typical attorney’s fees clause allows the winning party of a lawsuit to recover their attorney’s fees and other costs incurred when bringing a lawsuit to enforce the agreement. In other words, if the judge agrees to it, then whomever wins gets their attorney’s fees covered. Which is awesome, because some attorneys can be expensive (Not me though. I am worth every penny.)

Look at it this way. If your client owes you $7,000 but it’s going to cost you $5,500 to bring a lawsuit, well, it’s kind of not worth it, right? But if you can get the $7,000 you are owed and the other guy has to pay the $5,500 you spent to bring the lawsuit, all’s right with the world.

(By the way, this happened to a freelancer I know because they thought it was enough to have their client sign a statement of work. As I mentioned in the beginning, this is a big no-no! A statement of work is not a client service agreement!)

The moral of these stories is that all of that boilerplate at the end of your CSA is actually protecting you from the typical kinds of freelancer problems that can cost you large sums of your time and money to resolve.

And another thing!

The terms of your CSA should be reasonable, and the way you deal with clients is an important part of building your reputation and your business. So, try to strike a balance between protecting yourself and respecting your time, and pleasing somewhat picky clients. It’s ok to go above and beyond what you’ve promised in your CSA from time to time (so long as it isn’t to the client’s detriment).

PS. What to do when you forget to bring a pen

Here’s one last tip to make this CSA thing super easy: use HelloSign or a similar app to have all of your clients electronically sign your CSA. Electronic signatures are totally legit and they’ll help you get your agreements signed quickly by every single client.

Now, go get your CSA together. Your conscience (and your bank account) will thank you.

Author: Rachel Rodgers from Esq

Source: Creative Class


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