Re: Getting a Client to Pay

[Elna Tymes <Etymes -at- LTS -dot- com>]

Bruce Byfield wrote:

> I have a client who's refusing to pay. The client has (to put it politely) an
> extremely elastic memory and is becoming increasingly abusive, claiming that the
> work wasn't completed to his satisfaction, that it was incompetent - almost anything
> to defend his refusal. These claims not only grow each time we talk, but also
> change.

What is this - your client taking lessons from our latest Client From Hell?  In
September we delivered a rush project that had us working 60 hour weeks most of the
summer.  We had a contract that specified not only what documents we were to deliver and
what form they would be in, but the actual 7-step process we would use to produce them
and what was expected from the client and from us at each point.  No sooner did we sign
the contract than they breached the first agreement.  We thought it was because they
were a young startup, all but one were Chinese ESL folks, and probably most of those
H1B's.  They nodded and promised to be good, so we figured that it was a learning
experience. Sadly, we were the ones who learned that they wouldn't keep any of the
agreements, despite the contract.  We were paid on a milestone basis, and they argued
and fought with us over every payment. However the milestones were so close together
that by the time we didn't get the check on time for milestone X, we had already
delivered milestone Y and were within a day or two of meeting milestone Z.  Ultimately
they decided to redefine the meaning of the word "review" to allow for multiple
iterations and although we protested, they said they wouldn't pay until we went along
with it.

The last straw was our delivering all the final drafts on the due date and submitting a
final invoice, plus an invoice for a bonus we were due for finishing on time.  The
Client From Hell then decided that our work was no good and refused to pay. We tried
negotiating with them, my partner and I played Good Cop/Bad Cop, we tried warning them
that we'd hire a lawyer and go after the principals personally (and we actually had a
private eye get us a full set of credit, personal, and criminal data on the three of
them), and still we had to hire a lawyer to start the whole legal process.  We have now
served them with the demand letters (the amount they owe us is well beyond the Small
Claims limit in California), they have responded by hiring Wilson Sonsini to represent
them (Wilson Sonsini et al is one of the biggest legal firms in Silicon Valley and a
long-time player in the computer industry), and the lawyers are trading phone calls.
Our lawyers want an out of court settlement, and frankly so do we.  But we'd like to be
paid for our work. We are fully prepared to pay the costs to file suit and do the whole
court bit, cuz now we're not just angry, we want to get even.

The advice in here re: your client is to keep records of everything!  In our favor is
the fact that we've kept every piece of email and every page of notes from meetings, and
we can create a trail showing what was authorized when and by whom.  In fact we wound up
putting together an annotated set of email explaining it all to our lawyers.  If you can
show your client what you and he agreed to on specific dates, you have a better chance
of him being unable to deny your claims.

And don't be afraid to take the client to court.  We've taken clients to Small Claims
Court before - an unpleasant experience but at least we got our money in both cases.
The current Client From Hell, however, will be our first in regular Municipal Court.

Elna Tymes
Los Trancos Systems



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