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No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!

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Charles DiazNo Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 1:28:56 am

BACKGROUND:
I filmed a commercial donut for my highest paying client, no contract was signed, but they paid full price for everything. And since it's a donut they pay each time it needs updating i.e. ongoing work for me.

Today the client has coyly asked for the negative -- basically the commercial without the donut and no onscreen text -- a blank slate. I found out that they've hired someone else to use clips from the donut I created to edit another commercial for them.

This creates a problem for me. It could be a one-time thing, or they could be taking the donut and running. I do charge pretty high, but I'm worth it.


MY QUESTIONS:
1. Should I charge and how much should I charge to give up the "negative"?

2. Is it unprofessional to inquire on my status with them i.e. "are you wanting to work with someone else & why? How can I fix it, etc."?

3. I'm young, talented and know this won't be my last client, but they are my highest paying client. Should I even be worrying about this?

Thanks,
Newtofreelancing


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Bill DavisRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 6:43:08 am



My opinions...

Paragraph 1 - you said "they paid full price for everything." So in my book, they OWN everything. It's theirs, not yours. Period.

Paragraph 2 - coyaly schmoilly. They are asking for their own property. Any "coyness" on their part is a reflection that they're not jerks and feel uncomfortable. Good for them. But again, they're asking for what is already theirs. As to someone else doing the work, again, it's THEIR work. If they want to give their donut to 10 other shops to work with - that's up to them.

Paragaraph 3 - A) running a business create countless problems. Get used to it. B) if they leave, they leave. What they owe you (being paid for the work you do for them) is already settled. They "owe" you nothing else. As to "I do charge pretty high, but I'm worth it." this is your opinion. Up to now, they've obviously shared it. Perhaps they question that now? Or have come to believe it's no longer true? Both happen in business all the time. The critical thing is that the "I'm worth it" part is now revealed as possibly something seen one way by you and another way by the client. Again, welcome to business. This is typical, real, often variable, and hugely affected by changing market conditions. Good lesson.

If it's true and they can't get similar service from another, less expensive vendor, they'll likely be back as long as they value the quality product more than the extra costs. But just as likely, they might find 80% of your quality at 50%of your price. And that might be a better deal for them. So you'll lose them.

This is the nature of business and of competition. It's why all of us have to constantly monitor our position in the market, our products and services, and adjust them accordingly.

This is what business is. Period.

As to your questions:

Re: #1. Nobody but you knows. There's no one right answer to questions like these. Hypothetically, if you charge Amount A of two different vendors in this situation, the first might be delighted and the second might bad mouth you as overpriced and arrogant for the rest of your career. Pricing standards that once might have given you a clue are largely gone. It's a three way balancing act between your income, your market reputation and your personal growth as a business person. Good luck.

Re 2., Heck no. It's not "unprofessional." However, it's very, delicate. You need to talk about a very uncomfortable area with someone who (from your own description) probably already feels guilty about having to pull the work from you. If you have friends who you respect who have a very high level of "emotional intelligence" and "interpersonal radar" talk to them about how to handle touchy situations like this. Then do the best you can and sink or swim, learn from the experience.

Re 3. Absolutely. Not whether you keep them or lose them as a client. But rather the larger game of learning how to manage business change. Because your business WILL change. That's inevitable.

Good luck.

"Before speaking out ask yourself whether your words are true, whether they are respectful and whether they are needed in our civil discussions."-Justice O'Connor


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Mark SuszkoRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 8:07:59 am

Our work here is done, thanks to Bill here:-)

This donut as described has all the aroma of a "work for hire", and if that's the case, you hand everything over with a smile and wish them all the best, inviting them to come back anytime.

As to your insecurities:

A It could be you, something wrong with you. Your price, your quality, your speed. Your interpersonal style of working with them i.e. your "chemistry". Go over things in your head, ask yourself if you could have improved in any of those areas. You may not be completely honest or observant of the true nature of said personal chemistry, being too close to the situation, so do ask a close friend to evaluate you. Maybe it's your breath or pit odor in the suite, who knows?

B It could have nothing at all to do with you. The orders to change could have come from a new guy in the head office who wants to throw the work at someone they know. In these hard times, maybe they are out of cash and too embarrassed to let on that they're going to try to do it in-house. Maybe somebody pushed to bring stuff in-house and bought a shiny new editing package because accounting sucks and they want to create a different job in the company for themselves. Maybe they are going into a new, different line of marketing and they've pigeon-holed you as only capable of "making the donuts". Lacking imagination and vision, they might assume you have no skills for the new thing they want to do, and they forgot to or were afraid to ask you.. Maybe Joe's House of plug-ins Editing Hut underbid your work to steal the account away from you, with an unsustainable "teaser" rate, and you'd be a fool to race to the bottom, competing on a rate that's lower than your best current rate.

It could be a little bit of both A AND B. Or they could be grinders.

In either case, the businesslike thing to do is take your beating with a smile, not make a scene or act insulted, and extend every courtesy and invitation to come back, should they ever need you again. Do not burn bridges. This could all just be a test, and if the competitor stumbles, you must be positioned to be ready to come to the rescue with grace and professionalism and NO recriminations or "I told You So" 's.

Next month, send them a little email, card, or a letter, offering a " We miss you! special" where you might extend the billing period or offer smaller payments spread out over time. Or make a freebie out of some "added value" like free dubbing and shipping or compressing for youtube or whatever your ace in the hole is. Or let them know you bought a new plug-in or something and show some samples of what It can do, tailored to the kinds of things they've done, that might spark an idea for a new project in their heads.


Contractually speaking, if you want to "own the donut", and your other work product, you need that in writing, in advance, next time. And always get paid before you hand over the key element.


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Michael HancockRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 11:53:49 am

[Bill Davis] "Paragraph 1 - you said "they paid full price for everything." So in my book, they OWN everything. It's theirs, not yours. Period. "

From a legal perspective, that's wrong. Unless you have a contract that explicitly states Work for Hire or that the client retains ownership, the footage and project files belong to the OP.

[Mark Suszko] "Contractually speaking, if you want to "own the donut", and your other work product, you need that in writing, in advance, next time. And always get paid before you hand over the key element."

Nope. They own the finished spot you give them to air. Everything else is owned by you. They have no legal claim over it.

How you proceed, though, depends on how much you want to keep the client. Ask them what they need it for. If you give the donut to them, charge them above the cost to make a dub for them. You're giving future work away, so make sure you're compensated. But keep it professional and let them know you're always ready and able to help them again in the future.

Good luck. Tough situation to be in.

----------------
Michael Hancock
Editor


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Bill DavisRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 22, 2012 at 5:53:48 pm

[Michael Hancock] "[Bill Davis] "Paragraph 1 - you said "they paid full price for everything." So in my book, they OWN everything. It's theirs, not yours. Period. "

From a legal perspective, that's wrong. Unless you have a contract that explicitly states Work for Hire or that the client retains ownership, the footage and project files belong to the OP.

[Mark Suszko] "Contractually speaking, if you want to "own the donut", and your other work product, you need that in writing, in advance, next time. And always get paid before you hand over the key element."

Nope. They own the finished spot you give them to air. Everything else is owned by you. They have no legal claim over it.
"



We can all play "amateur IP attorney" all we like. And yes, it's true hat Title 17 is specific about "work for hire" ownership. - but in the present climate I think focusing on that is a huge mistake. It's "inside baseball" in nearly all common business situations. I have nothing against anyone who wants to read up on the letter of the law, school themselves in "work made for hire" and "fair use" et al. It's an excellent grounding. But in actual business transactions focusing on that will (at best) result in won skirmishes and lost wars.

You want to focus on the war. Which is building a profitable business.

So I view every work I do as exclusively the CLIENTS properly. With very few and very specific exceptions, I've learned the hard way that defending IP claims in my work is a losers game. I don't want to have to budget for legal hassles, copyright defense or litigation. And those are necessary if you institute policies that favor ownership disputes.

I don't' want to do that. So the best way is to try to NEVER dispute ownership. And a policy of vesting ownership with the commissioning party in every possible transaction handily diffuses the bomb.

It also paints me in a VERY favorable light with clients. I'm the easiest guy to work with because I never dispute the ownership of anything. If you're my client, large or small, and you want it? It's yours. Uncontested.

And the funny thing is that I've learned that THIS actually protects me more than the iron-clad contract. Because the vendor who causes fewer hassles is the one that's most often selected. Particularly today when anyone can work with anyone anywhere. 99 times out of 100, there will NEVER be a dispute. Win/win.

I'm delighted to give away the rights to my work with full payment because I believe that the knowledge I gained in doing the work in the first place is WAY more valuable than the work itself. Every successful commission makes me a better creator. Every successfully delivered job ends with me in possession of MORE KNOWLEDGE than I had when I started it.

I can create tangible work from ideas. But the tangible work, itself, isn't the prize. The ability to create it is. And that can't be "assigned" to anyone.

Now when I create for myself, that's a different ballgame. I defend my IP on that to the teeth. But when I do commission work for others, the full ownership rights to the completed work always go with the commission.

And my life stays simpler because of it.

FWIW.

"Before speaking out ask yourself whether your words are true, whether they are respectful and whether they are needed in our civil discussions."-Justice O'Connor


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Tom SeftonRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 10:57:26 am

The only thing I haven't understood is your use of the word "everything". If there is no contract, and no verbal agreement of what they own then surely you still own all of the rushes...

In which case, I would give them what they ask and try to find out what the intended use is. Questions will only help you!


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Charles DiazRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 4:05:29 pm

Fantastic insight, thank you. A lot of things to think about from your response and everyone else's. This is a lesson in professionalism, economics and interpersonal relationships. Business is very tricky, I'm learning.


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Richard HerdRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 4:36:35 pm

You can charge a reasonable fee for gathering all the stuff and putting it on a drive.

Invoice for the price of the drive plus your time to transfer the data and babysit the process.

Also get a facebook page and make sure they are your friend/like and make sure you keep it updated with what you're doing, so you can stay top of their mind.


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John BaumchenRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 23, 2012 at 4:12:46 pm

What do you mean they own everything? They paid for the edits, not the source. Absent a specific agreement that the job is a work for hire, the video company owns the copyrights.

If you want to give your assets away, that's your choice, but please don't try to tell others seeking advice that just because the client paid full price, they own the 'negatives', it isn't so.


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Charles DiazRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 23, 2012 at 4:23:07 pm

You're absolutely right. This is an area of contention though, the question not being in who owns what (since work for hire status requires a contract or similar written agreement), but what action would return the most value. Keeping the footage and demanding to be paid for it would return some money but I'd lose a client for good and potentially damage my reputation. But handing over the footage would return good will and ensure my reputation remains intact. If we were speaking of millions of dollars here, then I'd probably get a lawyer, but my reputation outweighs the money in this case.

Have you been in a similar situation?


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John BaumchenRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 24, 2012 at 11:27:18 pm

I was in a situation like this early on in my career. The only difference was that I knew the client was a grinder, got ground up on the job I did for them, but was able to return the favor when they wanted the raw stuff.

Agreed that the best way sometimes is to just hand it over, but when people make statements that the client 'owns' it, just irks me.


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Matt GeierRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 3:38:00 pm

I think this is one of the biggest problems that freelancers in common face on many sides of the circle. I know this happens time and time again in the web design business.

#1 ALWAYS get a contract, even if it's just an email that explains what each party is agreeing to. Emails hold in court and act as verbal agreements ... contracts.

#2 PLEASE LICENSE YOUR WORK. Especially if they are having someone else take your work and revise it in some way....you should still include some Creative Commons license in your work, and perhaps other licenses as well depending on the software or hardware you used to create the negatives. If someone violates your license that you included when you handed over the work, then that's something you can legally take action on.

#3 Sometimes when you are using an "all inclusive" price, you still don't have to include EVERYTHING. In other words, you have to gain security in Contracts, Licenses, and Rules to obtain a price.

If you need some other help or conversation. I'd be happy to network with you!

Matt G.
Creative Consultant
Social Media Consultant
Technical Consultant


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Charles DiazRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 20, 2012 at 4:14:15 pm

I am learning the importance of contracts, not just as legal protections, but as a way to make it clear to everyone what the rules are. Licensing my work is a very interesting idea.... Thanks for your response. Would love to chat about this kind of stuff and network!


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Scott SheriffRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 21, 2012 at 9:49:32 pm

[Charles Diaz] "1. Should I charge and how much should I charge to give up the "negative"?"

By your own admission "I filmed a commercial donut(sic) for my highest paying client, no contract was signed, but they paid full price for everything." the client paid full price for everything, shoot and post.
So IMO, the client isn't "Pulling the Ol' Rope-a-dope!", as you suggest. Perhaps you feel a sense of entitlement that the client isn't feeling?
Next time get a contract, and quit thinking you're so good you don't need one, and that the clients would never leave.
Had they paid only for a finished product, i.e. 'the doughnut', you might have some claim on the footage. In the absence of a contract that says otherwise, I would have to go with it belongs to them.
So if they want the master shots you can charge a reasonable fee for the transfer and the materials, but that is all since they have already paid you for shooting them.

[Charles Diaz] "
2. Is it unprofessional to inquire on my status with them i.e. "are you wanting to work with someone else & why? How can I fix it, etc."?"


Not unprofessional, but it needs to be handled carefully. They still have the potential to come back later, and/or give good/bad references to other clients.
There are a number of reasons they may want the master shots, but it sounds like you're fired. In reading between the lines of your original post, the most likely reasons are your rate, attitude or quality. It wouldn't hurt to ask even though it probably won't help with them. But it will be good info to have for the next client.

[Charles Diaz] "3. I'm young, talented and know this won't be my last client, but they are my highest paying client. Should I even be worrying about this?"

Yes.
The fact you find yourself in this predicament should be cause for much concern. There are a lot of things in your post that make me think you might have a poor attitude.
"Client Pulling the Ol' Rope-a-dope!"
"I do charge pretty high, but I'm worth it."
"I'm young, talented and know this won't be my last client, but they are my highest paying client."
It might be a good time to check the ego at the door and start thinking of this as a business. Get contracts, know the market, know what rates the market will bear. In the time it took me to post this, a hundred new 'one man band' shooter/editors just got in the game. And everyone of them thinks they are the next Ridley Scott. Wrap your head around the fact you're not the only game in town, and act accordingly. It might save you from loosing your best, highest paying client next time around.
Just remember that graveyards are full of people that swore they were too good to be replaced.

Scott Sheriff
Director
http://www.sstdigitalmedia.com


"If you think it's expensive to hire a professional to do the job, wait until you hire an amateur." ---Red Adair

Where were you on 6/21?


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Mike CohenRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 22, 2012 at 3:51:35 am

I'll relate a tale to you, bscuring the details of course:

Shot a video for a customer - a darn good customer we have had for years. Cut the final edit which was used in a webcast - what we were hired to do.

Shortly thereafter they asked that we send the raw footage to another vendor with whom they were working on another project. Were we upset they didn't just bring us the work? Sure we'd love all their work, but this other vendor was doing a marketing campaign and needed to cut their own video, and they liked what we made but wanted to start from the source, not re-edit our deliverable. But whatever they wanted it for, it was the client's to use - they paid their bill.

It turns out we know this other vendor and sometimes we send each other materials needed for different projects with the same client. I guess there is plenty to go around.

So yeah, as the others have said, save your ego for when you are trying to sell your services or your great cinematic masterpiece. But when doing work for hire, show some humility and do good business with those who give you good business. Don't "give people the business" as they say.

Mike Cohen


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Charles DiazRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 23, 2012 at 1:37:24 am

Just a follow-up:

No contract means it is not legally work for hire. Regardless, I gave the footage to the client without complaint -- I agree that it is about winning the war and not the battle.

Spoke with the client, too. I wasn't fired, they've given me outstanding references to potential clients and my price line remains intact. A happy ending.

Overall, the response on CC has been fantastic -- a very dedicated and helpful community. Thank you everyone. Your insights, points and suggestions have all been noted and taken to heart.

This has been a valuable lesson in pricing, communication and why it's probably better not to post questions to forums when you're in the middle of a paranoia-induced panic attack!

Cheers.


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Scott SheriffRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Jan 24, 2012 at 2:31:00 am

[Charles Diaz] "Spoke with the client, too. I wasn't fired, they've given me outstanding references to potential clients and my price line remains intact. A happy ending."

That is a great outcome, so glad to hear that.

Scott Sheriff
Director
http://www.sstdigitalmedia.com


"If you think it's expensive to hire a professional to do the job, wait until you hire an amateur." ---Red Adair

Where were you on 6/21?


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Ellen CruzRe: No Contract Was Signed -- Client Pulling the Ol' Rope-a-dope!
by on Mar 1, 2012 at 1:32:36 am

For the pricing, just know your costs and establish your rate. As for the negative, this will be the best time for you to start a contract which sets the outline the specifics and expectations for all parties involved. You can arrange and discuss with them the details and the extent on how they can use your negatives. Do your best to protect yourself. You as the creator have the right in the property you create. It is illegal for any unauthorized person or company to scan, copy, duplicate, manipulate, alter, etc. your work without your permission. The law specifically gives creators the right to copy, reproduce, distribute, display and create derivative uses of their work.

It is not unprofessional to inquire on your status with them. You can politely ask them where you stand. It is best to arrange a time to discuss the situation in-person. But don’t pose it as a threat; instead, “offer to have a conversation where you can provide input into their business and see how you can be of assistance.

Good luck.

Helen


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