Either works - Answers which are less than helpful. ;-)
You can offer your client a choice:
Option 1: T&M at your prevailing rate, 2 hour minimum onsite call, 1 hour minimum remote...
Option 2: Monthly retainer of x hours (10?) at a slightly reduced rate: 10%-25%, 2 hours can roll into the following month.
With option 2, offer that you do a weekly checkup on event logs (30 minutes to 1 hour and provide a very simple status report - ie: summary of any findings, suggested fixes or changes).
Again, with option 2, the key to your reduction is a minimum term/minimum commitment. Minimum term (6 months), minimum commitment (10 hours).
The idea is that if they agree to a longer term, you can plan your income much easier, so the greater reduction is in order.
There is no hard, fast rule on this – some consultants provide no discount and the commitment buys rapid (sub-4 hour availability). I am happy to provide a discount for long-term, ongoing work.
As far as a contractual agreement with teeth – I don’t have one. Either look around or have an attorney draw one up if it is a concern. I am a "naive" handshake kind of guy. I do have a signed proposal/quote for the work, but the legalese is non-existent. I just write up the terms of the agreement and have a conversation about it.
Two reasons for this: 1) I am getting money up front, so we are committed for at least that month. 2) The amount of time, effort, and money required to pursue legal action on even 20 hours of collections is not worth it. I would rather develop the type of business relationships that preclude that as a need.
I’ve consulted since 1995 and its never been an issue.
Have I had clients non-pay? Sure. In those instances, it is either a misunderstanding of some type – in which, for long term work, I can usually get a client to split the difference, or it is a bad client, in which case, it is my fault for bad judgment and I walk away.
I have had 2 clients in the “bad” category over the past 11-12 years. The first argued every invoice and I eventually had my contractor walk off the job. We never went back and I “lost” $6,000 in billable time. The other had us start a project, I didn’t get the standard 50% up front, we worked for a month and when I billed them they said they had decided to go another direction. Probably cost me $8,000.
In the latter case, about 2 years later, they contacted me with an emergency – on the project they didn’t pay us for. I explained that they still owed me $8,000 and I would only work on a pre-pay basis – requiring $10,000 to start. They $10,000 was to catch up on their prior bill and the $2,000 was to analyze the current problem and propose a solution.
I ended up speaking to the owner, who had fired the guy we had worked with prior. He ended up paying the amount and we did another $70,000 in work for that company over the next 2 years.
Needless to say, two lessons learned. One, stick to your payment terms – for everyone. Two, a reasonable conversation is never a bad tact- don’t lose your cool.
We never name called or threatened. Both clients received the standard phone call from me..
“While I believe that my company can provide you with the best solution possible, the current situation makes it economically unfeasible for me to do so. Thank you for the opportunity but it is best for us to end the working relationships immediately.”
I hope you find this helpful and good luck!
Matthew Moran (career blog and podcast below)
Career Advice with Attitude for the IT Pro
