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Freelancing, Confirmed Bookings, Holds, and Cancellation Fees

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Scott BartholomewFreelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 22, 2008 at 8:40:21 pm

Hello Everyone,

I'm a freelance AE/C4D designer/animator in the bay area and have gotten into a sticky situation with a client and would love to hear some advice from other freelancers as well as studio owners and producers .

I was recently booked on a 3d medical animation project that has been canceled half way through due to client concerns that were out of both of our control. In general terms the start up company client of the studio turned out to have bad credit and the studio decided not to follow through with the project fearing they would never get paid. This sort of thing happens and I completely understand the studio's situation.

When I first agreed to do the project I had a second studio willing to book me for the week and so I asked the studio in question to confirm my time for the week and let them no that if they couldn't guarantee me work for the week that I would need to take the other guaranteed booking. They said that they would book me for the week and that even if this job fell through that they would be able to put me on another project. Based on his promise, I let the other studio know I was booked and turned down their alternate offer for work.

As it became clear that the project wasn't going to be seen through to the end by the client and the studio, the producer asked me and I also offered to see if I could find some other work for the remainder of the week. I haven't been able to find replacement work as of today and let the producer know that he would have to pay for my time because I had turned down an alternate booking to take on the job and that he had promised me work for the week.

I told him if I could find an alternate booking that I wouldn't ask for any money for the days I hadn't worked and I've also offered to charge him my half day rate for the three remaining days in the booking as a courtesy to him and the studio.

The producer feels that this is the risk I take as a freelancer and that this is the nature of the job and doesn't feel he needs to pay me for the remainder of the confirmed booking that was canceled half way through the project, even at the lower half-day rate I have offered as a courtesy.

I've let him know that I expect to be paid for my time, that we had a verbal agreement, and that he needs to do the right thing and pay for my time. I've been more than fair in this situation but also don't want to burn any bridges. If this was a hold then I wouldn't be writing this post, but it was a confirmed booking and I turned down other work to take it.

I'd love to hear from any producers, studio owners, or freelancers that have ever been in a similar situation.

Thanks in advance,

Scott




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Chris BlairRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 23, 2008 at 1:35:36 am

Without a written agreement, you don't really have a leg to stand on when it comes to getting paid for the cancelled days.

But, I see both sides of this. I freelanced for a number of years in the early 90s, and have been a facility owner for the last 12. We use a couple of freelancers extensively, and when we have project cancellations, even if they've been booked for weeks for the project, they don't expect us to pay them for the days they don't work. They'd rather stay in good graces and get booked for the other 50 days this year we'll end up using them.

However, we also occasionally use 3D animators and designers, typically booking them on a per project basis. To avoid just this scenario, we typically ask them to work for a certain number of days or hours to provide us with preliminary sketches, layouts, keyframes, designs...you get the idea. That way, we can see the direction of their work, don't get committed too deep financially....and...if the project changes or is cancelled, we're not out for the entire amount.

In your situation, I would weight the prospect of future work with this client against the fallout if you demand payment for the days you didn't end up working. If there's a good chance of future work, let it go. If they already are pissed at you and wouldn't use you again...perhaps it's worth pursuing. But you can bet they'll tell every colleague about this at industry conventions, conferences and the Kiwanis Golf Scramble. So if it were me...I'd let it go.



Chris Blair
Magnetic Image, Inc.
Evansville, IN
http://www.videomi.com


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Brendan CootsRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 23, 2008 at 5:43:43 am

Sticky situation indeed. On the one hand, if there was no explicit agreement that you would be paid for a specific duration, regardless of whether that time would be utilized, then you don't have a LEGAL argument. At the same time, as a one-time freelancer I understand your plight and this is a lame situation to be in.

Honestly, this happened to me now and then, and I never asked to be paid for lost time, it kinda comes with the territory. The only way to avoid it is to have a contract you ask your clients to sign that specifically stipulates that you are being booked for X number of hours and will be paid for those hours no matter what happens. This way it's all very out in the open and both parties know exactly what to expect.

Brendan Coots

Splitvision Digital

http://www.splitvisiondigital.com


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Mark SuszkoRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 23, 2008 at 1:56:23 pm

"If it's not on paper, it never happened."

I thought that was magnanimous of you to offer the half-day rate for the lost days. The last-ditch offer from you might be to accept the reduced rate cancellation fee (which is what it is) in low installments without interest.

But basically they have you over a barrel. This time.

A guy I respect says "With the right people, a contract is never needed; with the wrong people, it's never enough". I knew a supplier/vendor like that, I'd rather have his handshake on a deal than a stack of contracts and would have slit my wrist before going back on such a deal with him. But these are different times, and in hard times people sometimes start to drop some of the more expensive parts of their character and personal code.

How this facility has conducted it's spoken-word agreements is very telling. It's a small circle we work in and reputation is everything.


For all future dealings with these guys, insist on everything in writing, even if it is only by email. Have your policy up front and clear. Consider billing in smaller progress payments for each step. Progress payments protect both sides; a cancelled project doesn't have to pay for work that will never be done, but you get paid for everything you did so far.

And if you decide to drop holding out for the money they owed, you can still do what many other retail and wholesale businesses do: pass the cost of thefts and bad debts on to everyone else with a slight rate increase on all their future jobs to cover the "leakage". Which punishes the innocent along with the guilty.


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Rory BrennanRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 23, 2008 at 3:14:21 pm

There was a discussion of a similar nature a few weeks ago and one thing I noticed was the wide variety of responses with most people ending with the "someone is going to get screwed here, you and the producer or just you."

Where I work we also use the hold / challenge / bought system and expect if time is bought it is paid for even when a job is cancelled. We can implement that against big companies like HBO, USA, ESPN etc but not smaller companies.

In your case the safer option for you is to probably get screwed, chin up and get on with finding more work.

RB

Rory Brennan
Editor
New York City


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scott bartholomewRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 23, 2008 at 5:27:39 pm

Hey Everyone,

Thanks for all your feedback and it's great to get some outside perspective on this. I actually cleared things up with the producer and they have decided to move forward on the project and have gotten there client to fill out credit apps and all the necessary paperwork that they needed to feel comfortable.

We both sort of apologized to each other and I hope our relationship wasn't too strained over our little argument.

I've worked with this studio for a very long time so I think I took it very personally when they went back on what I thought was a very clear agreement we had. If didn't have such a long history with the studio I think I would have probably reacted much differently.

I definitely need to be less casual about such specific agreements in the future and get at least an email confirmation or something in writing. I could also probably lighten up a bit when it comes to things like this and just decide not to work with certain folks if I don't like the way they operate.

Thanks Guys!

Scott

Scott Bartholomew
motion graphics - 3d animation - editorial
Website: http://www.sbmotiondesign.com


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moody glasgowRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 23, 2008 at 6:01:49 pm

I know this is different for all markets, but in my circle in the LA area it goes like this:

Company A puts you on hold for a day.
Company B calls and asks if they can put you on hold for the same day.
You inform Company A that someone else wants you on the day that have you on hold. Company A has the option to "buy" your time, or give up their hold to Company B.
Now in the case when someone buys your time and then can no longer use it, you try and find other work to get them off the hook.

I think you have been more then fair, and accommodating to these people. And, it goes to show that even people you work with for a long time might have different ideas about what you think are common business practices. I think it's a good idea to be up front and clear about cancellation policies before accepting a job.



moody glasgow
editing.compositing.design


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Brendan CootsRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 24, 2008 at 3:53:22 pm

I think my post upstream was misconstrued - In every single case where someone has come to this board for advice because they are getting screwed, they lack any formal written agreement, or their agreement is missing key details. Those who operate on a handshake may think they are being noble and "above the fray," but all they are doing is injecting unnecessary risk into high-dollar situations. Maybe it's worked for them so far, but it's only a matter of time. It's easy to think that your client is cool enough, and the relationship strong enough, that a contract would only stiffen things and drive a wedge into the relationship. But this is about making sure both sides know what to expect should a wide variety of situations occur, as they often do during any given production. Leave nothing to chance, or risk losing those "bros" at the first whiff of a kink in your well-laid plan.

If I buy an artist for a block of time and the job is cancelled, the artist would be reimbursed. I just don't have to worry about it because my client contract covers such contingencies. PROTECT YOURSELF.

Brendan Coots

Splitvision Digital

http://www.splitvisiondigital.com


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Chris BlairRe: Freelancing, Confirmed Bookings, Holds, and Cancellation Fees
by on Oct 24, 2008 at 11:11:24 pm

If I buy an artist for a block of time and the job is cancelled, the artist would be reimbursed. I just don't have to worry about it because my client contract covers such contingencies. PROTECT YOURSELF.

Unfortunately, contracts don't always insure you'll get paid. We're dealing with a large company that owes us a significant amount of money who's owner is a well-known multi-millionaire. We have a contract, written by our corporate attorney stipulating project and payment terms. The company in question is in the process of likely closing their doors. When we called this week to arrange payment on what's due, the multimillionaire owner's VP of operations actually said: "if you demand full payment all at once, it's just going to piss him off and he just won't pay you."

This guy's been sued by the State Attorney General in 2 states for deceptive advertising and business practices (we didn't do those ads by the way)...and he refuses to pay either. It's been 5 years in one state, 2 in the other. Nothing has happened to the guy because he can afford attorneys who wrangle things and keep him out of reach.

So contracts are great, but they don't guarantee everything will go your way.


Chris Blair
Magnetic Image, Inc.
Evansville, IN
http://www.videomi.com


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