The art of the steal

Creative approaches for dealing with a client who refuses to pay, before and after the fact

Radio silence…


Simon and Garfunkel…

If you have worked as a freelancer or contractor in a creative trade, you no doubt recognize what your client may be telling you without actually saying anything. Hell, while this is common in the creative world anyone who has spent any amount of time in a service business —where you're trading time for money—can relate.

The silent treatment nine times out of ten can only mean one of two things: Your client is either on an extended vacation in the Dominican Republic (avoid the mini-bar!) OR your client is out of here and has no intention of paying you for that brand identity you've been killing yourself to finish on the unrealistic deadline they gave you.

While it's useless to assume we can avert these kinds of issues entirely, there are things you can do to minimize risk in advance. If you are reading this, however, you are likely screwed already. Don't panic. I've got some ideas for you too.

Planning ahead for those who notoriously don't plan ahead

For many creative types, preparing for the client who will eventually screw us isn't exactly our strong suit. After all, we design for the love of design. Right? Money isn't that big of a deal. Right?

One big issue is that when many of us enter the trade, we are often designer/copywriter/motion artist/etc., first and business person second. As a result, until we've had a couple of bad experiences, it is difficult to recognize the importance of being prepared in advance. Even now, after 15-years in business, we were recently screwed over by a client for just north of $20,000. The reason? I was too comfortable with our client and made the mistake of being lazy when it came to having them sign an updated work order. Dumb mistake and it cost us big!

I tell you that story for two reasons: First, so you realize that even experienced agency owners and designers still make mistakes. But second, to illustrate how easily that lousy situation could have been avoided by only planning ahead.

Interview your clients

Before taking on a new client, you absolutely should do a little background research - and if the opportunity exists - you should literally interview them. As creatives, many of us have a hard time recognizing our value in the market. This general lack of awareness is responsible for a myriad of problems we as creatives experience throughout our careers. For purposes of this article, however, suffice it to say we need to get into the habit of recognizing ourselves as equal partners in any client relationship. They need you as much as you need them, and for that reason, you are well within your rights to sit your prospect down and determine if you wish to engage with them.

Clear Scope of Work

Clearly defining the full scope of work with your client serves a couple of critical purposes. The first is that you are establishing your marching orders in cooperation with your client. Doing so ensures that you have a clear list of the demands being made of you and at the same time allows the client an opportunity to have their needs expressed in writing. That said, clients are notorious for expanding their wishlist after it has been agreed to. This phenomenon is called scope creep, and it's pervasive. Typically leading to issues like our aforementioned fleecing of $20K. The moral here is that you need to define the scope as completely as possible. Anything beyond the agreed-upon scope results in a change order. Period. No exceptions!

Sign on the dotted line

Any time you engage with a prospective client, your process must include a signed operating agreement. For a lot of designer-types, this step is often overlooked in the interest of brevity or simply because we're desperate for work and wish to remove any roadblock keeping our client from saying "yes." I get it. I do. I'm guilty of skipping this step completely more than once in my career. Usually, there is a level of comfort with a client, maybe they came by referral or something, but almost without exception omitting this formality ends in disaster.

It's critical that your client not only agree to the scope of work you've defined together, but they also sign off on the terms of your operating agreement. Typically your operating agreement will contain things like payment terms, what happens in the case of non-payment, dates and times for receipt of deliverables, milestones, assignment of intellectual property, and more. This document is what gives you a leg to stand on - even if its a short, stubby, wooden leg - should your client head for the hills.

Skin in the game

Finally, before lifting even one creative finger, you should demand a deposit of some variety upfront. This is a common way of doing business, but so many creative-types are notorious for not asking for any coin in advance. Again, this serves a couple of purposes. First, it protects you in the event your client gives you the ol' double-tall-man and ensures you aren't left with only the lint in your pocket for your efforts. It's not as good as getting paid in full, but it sure beats the alternative. Second, it sort of pre-qualifies your client and gets them to put a little skin in the game. They are making a financial commitment to your relationship, typically indicating that they are in it for the long-haul.

Well crap… screwed over again

Your client is a ghost. The phone has gone dead and no matter how kindly-worded your email messages they aren't responding. This is precisely the scenario that we had tried to prepare for, but those lousy good-for-nothings bailed. So now what?

Get communicative

If a client goes dark on you first things first, don't panic! It is possible your communique was intercepted by the KGB or spammed off someplace so give your client the benefit of the doubt. People go on vacation; they get busy; they get lazy; and you know what, sometimes priorities change. It doesn't make it right, but all of those are simple explanations for why your client may have dipped underground.

Use this opportunity to double-down on your communication skills. If email isn't working try text, snail mail, courier pigeon or there is this technology I read about in a book once. Hmm, something to do with putting a device near your ear, the other end next to your mouth and merely talking back and forth like human beings. I can't remember what it's called, though. The shone, prone, PHONE! That's it, pick up the phone!

There are a lot of creative people who are quietly - or not so quietly - pretty introverted and aren't dying to get on the phone. But frequently when emails get overlooked or ignored a simple phone call will do the trick in half the time of a record-setting email chain.

If you've exhausted every modality you can think of, feel free to try certified letters or demand letters as a last-ditch effort. You may get a little traction. Often, however, as time has passed and the likelihood of getting paid has slowly slipped out the window, it might be time to consider elevating the situation.

Stop it!

If your previously attempted communication efforts have failed or have born little fruit, and sufficient time has gone by, it goes without saying, but you need to stop working. You'd be surprised how often - as diligent designers committed to our craft - people keep on and complete their tasks despite being ghosted. It doesn't even occur to them to pump the brakes.

This is one of those moments when you need to put yourself ahead of your client. They have abandoned you for all intents and purposes, so stop and continue your communication/collection efforts. If a connection is reestablished, you may resume if it feels right.

Split the diff and move on

When its become crystal clear that your efforts to get the project or client back on track have been met with a resounding "not happening," it's time to consider other, more drastic approaches. This and the following options depend entirely on the way you feel they will be met, and if the time or money spent is worth what you stand to gain. In the case of our $20K faux pas, our attornies advised us that we were likely to be on the hook for that amount or more if we chose to go to court so for us the discount-and-ditch technique was our best option.

The way it works - assuming you at least have an open line of communication with your client - is that you offer a settlement. Essentially discounting the work you've done for them and accepting a partial payment instead of going to court or collections. It's not a great solution, but it is a better than nothing solution - if the client will agree to it. Also, depending on the feedback from your client, you can explore payment plans, a renegotiation, or whatever else might fit the bill. The point is we're trying to collect something versus the nothing we've got so far.

Court, collections, and factoring oh my!

If you are considering court or collections at this point, I think it's safe to say things have gone officially sideways. By this point we're usually exhausted from the enormous amounts of effort wasted trying to collect and for many, they simply throw in the towel. Honestly, sometimes that is the best option.

If you are at this point, you should probably take a minute to get introspective and take some time to analyze what the potential upside is if you proceed.

Beyond just finances factor in your time, stress, and mental anguish. Some times it's honestly just not worth it to engage.

For simplicities sake, let's consider three options if you decide to move forward on your plan to collect. There are probably other options that include ruffians showing up on doorsteps and whatnot, but we'll stick to what is popular - and legal - for the purposes of this article.

Collections. This is a super-common method utilized almost universally for attempting to collect on past-due invoices. A debt collection agency, by definition, is a company that specializes in recovering payments that are typically more than 90 days past due. These guys will take the dirty-work of collecting off your hands, but at a cost. Generally speaking, they will take a fee of 10% to 50% of the amount to be collected. Also, be aware that not all collection agencies are created equal. Should you choose to engage one, look for an agency with experience in your field. This will increase the odds of a successful collection and could reduce the agencies risk translating into lower percentages paid by you. Here is a Forbes article that explores in greater detail what to look for in a collections house.

Factoring. The most significant difference between factoring and simple collections is that with factoring you are actually selling past-due invoices for a percentage of what the invoice is worth. Oooh, and did I mention you get paid upfront and in some cases as much as 75% of the invoice's value?! Not too shabby if you've been squabbling over an unpaid invoice for a couple of months with no payment in sight, am I right? There are commonly other fees and percentage deductions written into the deal. Pay attention, but losing 25–35%-ish of a bill might be worth it in the end if you are burning a lot of time trying to collect yourself. Not to mention saving yourself some stress and aggravation.

One such company that engages in this sort of thing is Check out this page for more information and the ins-and-outs of factoring.

Court. If all your other efforts have proven useless, and you've literally pulled your last straw, maybe court is for you. It usually is, but really should be absolute Hail Mary time before you give old RBG a shout and take your client to court.

In the United States, typically - although the rules vary from state-to-state - you'll need to choose between small claims and municipal court. The court you select depends entirely on what your client owes. Small claims courts have limits, generally, from $2,500 to $25,000. If the amount exceeds your local small claims court's limit, you will need to take your client to municipal court to seek satisfaction.

Before going to court, you'll need to weigh the pros and cons and the financial costs and benefits of going down that path. If the numbers make sense, and if you have a good case, it should be a snap to get the judge to agree to a settlement that works for you. Here comes da judge… Here comes da judge…

Debt collection is never a good time. The odds aren't great you will never run into a billing or collection issue. However, with any luck, you'll be able to avoid the down-and-dirty of the legal system when it comes to your client relationships. After all, that is what we're talking about here, right? Relationships. Building meaningful, quality relationships with your clients is the single best thing you can do to hedge your bets against future non-payment. Additionally, taking the time to interview prospective clients, set clear expectations, establish agreements, and collect deposits are great ways to protect yourself for the eventual 'just-in-cases' of doing business.

Contract workers unite!

Have you run into client drama in the past? Are you working through a problem right now? Let's talk about it! Share them here in the comments below or find me on the socials. Let's continue this conversation wherever the audience most suited to hear it can get involved - I am @ryanroghaar on Medium, Twitter and Instagram.