Ethics and Money Question...
I'm a freelance editor working out of my home with my own equipment. Recently due to sickness I had to stop working for almost a year.
As you can imagine I lost all my clients (actually I referred them to acquaintances that could get the job done).
Six months ago, as I tried to get back on my feet (literally) a friend from college aproached me and ofered to give me work. He assigned me the weekly edition of TV ads that needed to be changed on a weekly basis, offering me a fixed fee for each ad I edited/modified every week. He acted as the intermediary between the final client and me.
As the weeks passed my duties started to grow, not only did I edit, but also started to update and design new graphics, label the tapes (with my friend's company logo), making several DVD dubs of each ad and managing the traffic instructions for different networks/feeds.
I asked my friend for a raise, he told me that the client had asked for a reduction in price and faster turnaround times, that he was making a huge effort to give me support and that his profit margin was almost zero. This being Latin America and facing lots of competition I kept going on for the same fee.
Well, to make the story short; today in the morning I was contacted by the final client: an acquaintance from my old days at public broadcasting referred them to me, they are trying to cut the cost of their ads and wanted me to submit a bid, they gave me the information on how much they were being charged by their current supplier (that's my friend). As far as I know they don't know that I'm working for their current provider.
I found out that my friend is charging them four times what he pays me. I was very upset... but still feel confused at what should I do... People tell me that in business things like "fairness" and "honesty" only make you more vulnerable or a fool... Still...
Should I submit a bid? Should I reveal to the client who am I? Should I take the account away from my friend? Or should I steer clear of this?
BTW, I do really need the money I'm still paying medical bills and drugs, and would like to upgrade my equipment and be more competitive, etc. And as far into this year this has been my main source of income, it has been very difficult for me to get new clients or "recapture" the old ones.
Thanks in advance for your advice.
Its time to quit calling that fellow you've been working for your friend, he's a liar and a cheat. And, while it sounds as though he's helped you out when you were in need, he's clearly taken advantage of you the entire time. It makes me angry just to hear about it. You must feel betrayed, and rightly so. I don't think you owe him a thing...
So, if I were you, I'd bid the job as if this client had just walked in off the street, and don't volunteer any information to your former friend or to the client. If you land the work and get chummy with the client, you can always tell them about the marvelous coincidence that has you doing the work for them again.
Good luck, I hope you get the work...
David Roth Weiss
David Weiss Productions, Inc.
POST-PRODUCTION WITHOUT THE USUAL INSANITY
I don't think you owe anyone anything in this circumstance. So long as you didn't pursue going around your client to get to the end client, there's nothing wrong with placing that bid and potentially getting the work.
The one thing I'd look out for is will you potentially lose other work from your current client. We work with a number of ad and PR agencies , and wouldn't consider skirting most of them in this sort of situation, even if we were in the right, due to the impact it would have with them long term. You have to evaluate which relationship will be the most valuable long term sometimes, because even if you're in the right, don't expect to work with your friend / current client again if you get the end clients work directly.
Also consider, is there anything your current client is doing for the end client that you don't want to or can't. You'd hate to get the gig and then end up losing it or even deciding you don't want it, because then you've lost on both fronts.
In all there's nothing wrong with it ethics wise, just make sure it's your best move.
Sound like your "friend" is about to lose that client and in essence you'll be losing your job with him. It's very easy for me to say bid on it as your own company but your friend will eventually find out as will the final client. I would be upfront with both of them, bid on the project and the let the chips fall where they may. In the end you won't have it weigh on your conscience.
[Kenzo_UVW] "Should I submit a bid? Should I reveal to the client who am I? Should I take the account away from my friend? Or should I steer clear of this?"
Absolutely submit a bid, especially since you have the knowledge that your friend misled you on how much the client is paying per spot. That's one thing I never do with any of my editors who work with me, I'm very upfront about client fees in the event that I ask them to work for a lower rate than usual.
The client approached you for a bid, not the other way around so I feel you are fully justified in submitting a bid because the client is obviously looking for another supplier. If you can do the work for half of what your friend was getting, but get to keep all that money, then you're probably making double what you are now.
If your friend who hired you gets upset, that's really not your concern because obviously the client is looking for a better deal. If you can supply that, more power to you. Sounds like a really nice steady gig so make a bid and good luck to you!
Walter Biscardi, Jr.
HD Editorial & Animation for Broadcast and independent productions.
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First, it's not always evil that you supply a service to someone who then charges a markup on it. That's just business. How *much* of a markup is a delicate balance between what is reasonable yet competitive with others vying for the account, and what is reasonable for your time on the job. So just because he's marking up your work to the final customer and pocketing a profit is not of itself a basis for the decision you want to make.
The fact that he's charged 4 times what he's paying you, WHILE grinding on you to hold your costs down while doing more work, IS a huge problem. HE's in the wrong there.
Myself, I would decide if this is really a friend and one I want to keep. If yes, I'd confront him directly about this. If not, go ahead and bid, but if it was me, I think I would tell them I was the guy that was working for them all along, only now we're cutting out the middle man and finding a rate that works well for both sides. I usually ask my wife for a second opinion about these kinds of things, she's a great moral compass.
It does sound like he's going to lose the account anyway, and all you need to do is underbid what he was charging by 25% and you are still going to be getting your raise you wanted, and more. You should, as was suggested earlier, make sure however that the extra money doesn't come with surprise extra expectations not budgeted. As far as hurting other business contacts, well, what is the guy going to say to blackball you? "He stopped being my underpaid and exploited wage slave and started charging what he was worth, the NERVE of that guy!" :-)
Whatever you decide, don't do it just to get some kind of revenge on the friend. Do it because it is a good, ethical business decision.
markups are a sticky subject. I myself don't care if an agency marks up my work to their client as long as they aren't pleading hardship to me to get a discount rate...
Your friend may be taking advantage of you and simply pocketing the money or he may be in some sort of trouble and he needs the money for something...who knows?
The key is that the client approached you, not the other way around. I would tell your friend that the client has approached you and that you've decided to provide a quote.
I'm a big believer in being completely above board, however...
As these things can get ugly, I would then intimate that you know what he has been charging. I'd offer to leave unsaid that you were doing the work in order to not make him look bad to the client...which means he'd have to also keep his mouth shut rather than spread all sorts of undeserved bad vibes about you.
The client is happy, you're happy, and he lives to overcharge another day...
A happy ending. :-)
Creative Cow Host,
First I would like to thank each and everyone of you who chimed in.
I don't see what good it's going to do to talk to the guy about it. He threw you some work in down time, which was nice, but he exploited you in the process. Don't give that kind of person an opportunity to guilt trip you into making a mistake or let him sabotage your bid.
If he can screw you once, he can screw you twice. He's gonna be upset whether he finds out before or after - either way he won't trust you. These jobs come and go so he's gotta be prepared for that.
I do second the idea that you double check all of the details of what the client wants delivered. There may be hidden costs that you don't see that your friend was doing. Producer's don't always get much credit, but we do occasionally do something of value, besides order lunch. :-)
First, forget the illness and the medical bills. That's your problem, nobody else's. The fact that your "friend" exploited you when you were ill gives a good clue as to his character, but beyond that it's irrelevant.
Second, evaluate whether you need this "friend." If not, then you have another interesting dilemma: do you tell the final client of your involvement?
Because the client is unhappy with her current experience, and because you have been part of the "team," you probably should tell her that you have supplied the tapes, and that any delay in getting the tapes to her was beyond your control.
You say you are working out of your home -- is that going to be a problem for the client? If your producer/friend did supply some value, even if it was only his office, perhaps you could enlist another producer/friend to bid on it with you.
I'm curious about one thing: perhaps she knows that you supplied the tapes, and she's just trying to cut out the middleman. Perhaps she is a "grinder" as well as your friend. In that case, it's probably a good idea NOT to go into detail about how much your friend marked up your services -- unless you want to keep working for too little money.
Tough call. I'd go for it though.
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Regardless of your friend's decisions, I personally think it would be unethical for you to bid on the job. If I were you, I would just confront your friend with this information directly and let him explain himself. Two wrongs don't make a right.
As for your friend's "ethical lapses" another reason to confront him/her directly is that you don't know where that money is all going. He may be up to his eyeballs in related expenses that, once explained, rationalize his markup and lack of wiggle room to give you a raise.
Communication is always better than backroom dealings that burn bridges and make you look bad. All you have is your credibility.
I just recently went through the same thing. Your "friend" needed a sucker who was desperate for work and you were it. He lied about the pricing of the job to take advantage of you. DRW was correct, this is not your friend. He is a user.
I would have a meeting with the client and ask them for a written offer. Then, take it. At some point you have to tell them that you have been working on their job. Above all, never say anything negative about the other guy. He may try to smear your reputation, so be prepared for that. If necessary, have a letter from your attorney ready to present to him.
Plan on catching hell from the rip off guy. Before all of this transpires, have your response ready for when the phone call comes. When the call does come, simply say "While I appreciate the fact that you thought of me and gave me work when I needed it, I don't appreciate the fact that you weren't forthright about the money involved." You do own him that much but nothing more.
As for my story, a "friend" approached me about a project in Mexico. He explained that the client didn't have a lot of money right now but they would be a gold mine in the future. Knowing that this is always a scam, I offered to work a little extra, out of the country for my local day rate , but only if it was exactly what he was charging them. He agreed and away we went, twice.
The client called me direct 100 days later and explained that they had never received anything from the producer and that they had given him almost $50k. They sent the contract to me and he had charged them 2 1/2 times my rate for my labor. I knew that something was up when the producer never picked up that HDCAM tapes. He simply blew them off. He had also charged them for three crew position that were never filled. I shoot with an F-900 and he charged them $450 a day for a tape operator, just to give you an example.
My point is that these crooks are always caught and those who operate in an honest, ethical, manner owe the thieves in the business nothing.
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I forgot to say that I'm happy that you've recovered and are back to work.
Don't you dare offer to do the work for less money.
Based on the evidence, I'm sure your "friend" is less than ethical but think about the situation if he were JUST a client and not a friend.
Would you really question how much a producer is making on top of what they are paying you? Is it any of your business to do so? I think all the producer is entitled to tell you on the front end is exactly what they want to pay for exactly what they need you to produce. It's then up to you to decide if you want to do the work for that amount or not. If you realize at a later date that you aren't happy with what you are being paid, it's up to you to renegotiate your terms or to simply quit working for the producer....as long as you have fulfilled the terms in your agreement.
In this case, you asked for a raise based on increased responsibilities and he told you that the client's budget wouldn't enable him to pay you more money. At that point in time, it was up to you to either do the extra work for the same rate or to quit working for him altogether. It was your choice and you chose to continue working.
Then the call came from his client that ultimately revealed how much money he was making on the job. You then quickly compared his money to your money and didn't like the result. In reality, his client is calling you because they want to pay less for the work. So, your client (in a way) was telling you the truth when he said that he couldn't pay you more because his client wouldn't pay him more.
But this pissed you off because you felt betrayed that he was making more money than you when you were doing all the work. But, WAS HE REALLY MAKING MORE MONEY? Remember that a producer spends a lot more money than they make because they have to hire out just about every skill set required to complete a project. Plus, you have no idea what is required financially to run his business.
Now let's talk about his client for a minute. If you have known your friend for a long time and have never had a reason to question his ethics or values, then why would you let one call from a client you've never met allow you to question all that you know about this friend?
If I were in your shoes, I'd sit down with your friend and discuss everything with him. I'd tell him that based on all the information you have, you believe he has taken advantage of you by asking you to do more work for less pay. Then, see how he handles the situation. If you don't like his reaction, then you can decide on your own if you want to pursue the client's business. If he handles it the way a good friend should, then I might think twice about going around his back directly to the client. So what if the client called you instead of you calling them. Your job as a friend is to protect your friend. Your job as an editor is to protect the producer or agency that brings the work to you.
It's a dicey situation but as a producer, I'd never hire an editor that even remotely indicated that they'd take my business if the client were to call them directly. Then again, I pay my freelancers industry standard rates so maybe that's why I don't run into these problems.
Good luck with whatever you decide to do. If it turns out that your friend will remain a friend but will lose the client's business anyway, you may want to figure out how to get the business for yourself but hire the friend to do some work for you. This way, money still flows his direction but you are in control of the lion's share of the budget.
Just my thoughts.
Kristopher G. Simmons
Video Business Coach
I agree completely with MindYourVideoBusiness.
Many artists get angry when they see how much the producer/production company is making, but that is only half the story. The producer may have a profit margin of 5% due to all the costs of managing the job, other artists, the cost of landing the job to begin with etc.
Reacting based on one slice of information (and information provided by a client looking to pay less for the job) is foolish, and going behind the friend to take the job is just as back-stabbing and ethically bankrupt as the producer is being accused of engaging in.
well sure ya gotta submit a bid. Freind or no friend, he knows what ya do for a livin' and this is part of making one. A little competition amongst friends is always a good thing.
I handed a freelance buddy of mine six figures a year worth of bidness a couple of years ago. Now we compete on a regualar basis. I see it as fun and healthy. Makes us both have to be worth what we charge... which is two very different rates.