It was the
summer of 2007.
I was in what
can only be described as a horrific limbo, personally and professionally.
After eleven
years as a law firm employed attorney I'd just started my first business as a
lawyer. Formed my LLC specifically to take on my first client.
This client was
very promising. She said all the right things. I was impressed by what she was
trying to achieve. She seemed exceedingly professional and believable and I was
excited about the work.
She didn't
hesitate to pay me a $10,000 retainer, and things were going great.
Until she never
paid me again
With this
client I was using an antiquated billable hour model, under which the client pays
a retainer, the lawyer holds that money in trust and bills against it, and when
it's gone the lawyer bills the client directly, in a "pay as you go"
arrangement.
Things were
chugging along on the project and when she missed the first couple of payments
that were due after the retainer ran out I hardly gave it a second thought.
We were busy.
Things were
moving quickly.
She promised
the check was in the mail
I believed her.
After all, she was a professional woman with a huge vision.
It's hard to
pin down when I fully realized that her promises were empty and hollow,
and that I'd fallen victim to a desperate, futile, anxiety ridden cycle of
"hope" that she'd just pay me because I'd held up my end of
things and done the work.
I got screwed
Royally,
totally, fundamentally screwed.
The financial
hit was devastating enough.
By the time she
disappeared she owed me $35,000
By the time I
(barely) got past the shame, humiliation and self loathing to take action to
collect, interest and attorney's fees put the number north of $40,000.
The sick, sad
part was that the financial screwing was not even the worst of it.
The emotional
fallout was much, much worse. I spent a year living with shame, humiliation and
self loathing (the details of which are a subject for another post).
Again, this is
a worst case scenario. There are many "lesser" ways that clients
flake.
Some common
examples are:
- Not showing up for appointments
- Showing up late for appointments
- Rescheduling appointments at the last minute
- Requesting a refund due to "buyers' remorse"
- Paying late
- Not paying at all
- Not doing the things you recommend
- "Disappearing" owing you a large sum of money
Consistently
allowing clients to flake comes at a steep cost
Every time a
client flakes it erodes something inside us. The erosion may not be apparent at
first - but the resulting pain insidiously grows and festers.
That pain plays
out in any number of ways.
For example you
could:
- Experience shame, humiliation and self loathing (like I did)
- Question your self-worth
- Question your ability to run a business
- Wonder why people don't take your business seriously
- Find yourself giving too many refunds
- Stress a lot about money
- Wonder whether you're charging too much (or too little)
Before you read
any further, understand this: I'm not saying that all clients flake -- in my
experience most of them don't.
And sometimes
things happen unexpectedly and need adjusting. Of course they do, we're all
human, and as business owners we need to be flexible.
But make no
mistake, your ability to make money is vital to your business and every client
who does flake erodes that ability, and ultimately slows your growth.
The Antidote: A
Professional Service Agreement That You Believe In
The best thing
you can do for yourself, your business and your clients is to start every new
client relationship with a solid Professional Service Agreement.
As I
transitioned my business from straight up lawyering to writing website copy and
content I began working with a business coach.
Through her I
connected with tons of coaches and business professionals, many of whom would
ask me about things related to what they could do when a client flakes. I was
shocked at how few small business owners don't actually have a solid, strong
professional service agreement.
What a
Professional Service Agreement Is
A Professional
Service Agreement is a written, legally binding agreement signed by you and
your client, where you both clearly understand and intend that you're rendering
and your client is paying for a professional service.
Whether you're
a coach, consultant, intuitive healer, or a writer, you provide a professional
service.
Why You Need a
Professional Service Agreement
The main reason
you need a Professional Service Agreement is so that you can sleep well at
night knowing you and your business are protected from the insidious
erosion of both confidence and finances.
Since your
business needs to make money first and foremost, and since new clients are your
main source of income, the professional service agreement forms the
foundation of your work, serves as a roadmap for how you work with your
clients (including how and when they pay you), and maps out how the relationship
is going to end.
While no
agreement is ever going to be 100% airtight and invincible, starting each new
relationship with a Professional Service Agreement sets the stage for full
performance (by both your client and you).
Having a
legally enforceable agreement that you fully understand and believe in allows
you to work with clients more confidently. It also allows your clients to
fully step up to the plate to receive and implement the valuable work you do
together.
A well crafted,
solid agreement lets you do things like:
- Set enforceable boundaries with your clients
- Get clear about how much to charge for your services
- Get clear about how and when your clients will pay you
- Minimize refund requests
- Decide up front what will happen if you need to fire a client
- Decide up front what will happen if a client wants to fire you
- Be in the best possible position should you need to take legal action
A solid
Professional Service Agreement gives you the foundation to stand up for your
business when you need to - to stop flaking dead in its tracks, make more money
and be confident in the process.
Do you use a
professional service agreement that you're happy with? If not, what would you
most like to know in order to create one and start using it?
By Stefanie Frank
Image by © Juha Tuomi
Stefanie Frank
is an entrepreneur, triathlete, and lawyer who lives, works and trains in
southern Nevada. She writes website copy and content for lawyers, business
coaches, and service professionals who own small businesses. Stef creates
continuity between what her clients want to achieve profit-wise and what
readers of the content want and need to receive in order to buy. Stef is
currently training for Ironman Boise 70.3 and the Ironman 70.3 World
Championships.
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