If you're an entrepreneur or run a small business, chances are you've hired a freelancer or considered hiring a freelancer. And for good reason: when you don't need or can't afford an employee, freelance labor gives you access to talented workers who can take care of a specific set of tasks.
But getting the most out of freelance labor is not always easy because freelancers work differently than employees and many entrepreneurs and small businesses don't understand that. To ensure a successful relationship with a freelancer, here are five common mistakes to avoid.
Mistake #1: Not signing an agreement.
Many entrepreneurs and businesses fail to reduce their agreements with freelancers to writing. This is a huge mistake for reasons that are probably obvious.
Mistake #2: Not securing your rights to the work product.
A written agreement is a good start but after spending the last 10 years working primarily on a freelance basis, I'm still amazed at the number of poorly-written agreements I'm presented with that don't require me to assign the rights to work product.
Making sure you obtain the rights to work product is extremely important because in many places, intellectual property rights automatically vest with the creators. Hypothetical example: you're a US-based company and you hire a graphic designer on a freelance basis to design a new website for your company. Unless your agreement with the designer contains a valid work for hire clause or provides for the assignment of rights, you don't have the rights to the work product that you probably think you do. In other words, you may not own the website that your paid for.
Mistake #3: Getting lazy with specs.
The old adage "you get out what you put in" is applicable to your relationship with a freelancer. If you need something built but leave all of the important blanks to the freelancer to fill in, chances are you're going to get a result that differs from what you really wanted. To boot, you'll find that you spend more time and money.
By investing in developing clear and detailed specs up front, you can help ensure that you get the work product you need on time and on budget.
Mistake #4: Not paying on time.
Being a successful freelancer is not as much about acquiring enough business to stay afloat as it is about managing cash flow. If you're owed $10,000 for a project but you aren't paid before your bills come due, $10,000 in accounts receivable doesn't do much for you. And so it goes that many freelancers eventually go back to being full-time employees not because they can't get clients but because they can't seem to get money from clients before they have to pay bills.
Many companies that work with freelancers don't appreciate that freelancers have the same cash flow issues many businesses do. They'll pay late and not give it a second thought. This is a bad move for two reasons. First, it puts the successful completion of projects at risk in the immediate term. After all, if your freelancer has to take on another project that will get the bills paid, he'll put you on hold. And second, it sours the relationship, sometimes to the point where a great freelancer won't work with you or gives you economy-class service going forward.
Mistake #5: Micromanaging.
The differences between freelancers (independent contractors) and employees are not merely legal or semantic in nature. Most freelancers think, act and work much differently than employees. As such, they should be treated differently. Yet many times, companies that hire freelancers expect them to function as employees. From expecting the freelancer to be available 24/7 to directing the freelancer's work, there are plenty of ways that companies can treat freelancers like employees. Generally, this can lead to varying levels of micromanagement as the company tries to overcompensate for a lack of control that it isn't used to.
Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.
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4:13PM on 2nd September 2009
Ooh...I really like and thoroughly appreciate this article!
It's so true that many people hiring freelancers don't know how to work efficiently with them. There is a general perception that one can just hand off work to a freelancer, and it miraculously gets done. But - garbage in, garbage out.
I would also like to add that as a freelancer, it's important to me to receive some "tailgate" information. I like to know what the results were, was the client happy, was there anything we could have done differently? And if the responses are positive, can I have a sample, can I post it on my website including result stats, and can I have a testimonial? This is the currency of the freelance world.
4:25PM on 2nd September 2009
Great post! I agree with Louise that the piece that's often missing is the final "debrief" or tailgate info. Getting paid is always nice, but you also want to know that the results met the requirements (or if not, where they went wrong). If something wasn't entirely to the client's liking, it's often a reflection of #3 and not enough information/background/support given upfront.
1:10PM on 3rd September 2009
Also add insurance, especially if you have someone come to your place of business, home office or on location to perform work for you.
Creative Director at Foliovision
2:37PM on 3rd September 2009
Ronald, I beg to disagree. Insurance is a waste of money most of the time. You spend more time and energy trying to collect from recalcitrant insurance companies than the policy is worth.
Patricio, good post. It sounds like you do have some experience with this issue.
Not so sure about the rights issue: if the work was done for pay, the freelancer who then comes back to claim additional rights is on pretty shaky ground. But it is one more loose end.
A written agreement, i.e. the specs is really all one needs. But that much one does need.
Tech Reporter at Econsultancy
4:19PM on 3rd September 2009
Alec,
Thanks. It does sound crazy but the rights issue is really important since as a general rule, copyright automatically inures to the creator of the work product. If you pay somebody but it's not a work for hire and/or there is no assignment of rights, you can easily find yourself in an ugly situation.
Example: you hire me as an independent contractor to design a logo and website for you. We don't sign an agreement that has a valid work for hire clause or an assignment of rights. This can become a legal mess. For the logo and design, it may be considered a joint work because you contributed in the form of feedback and creative decisions. For the website's code, I am going to be the copyright owner.
It seems unfair that you could actually pay me and not own the rights to your logo and site but this is indeed the case. Now you may have an implied license to use the work product but this is not very comforting since you still don't have ownership.
And even if you have an implied license the parts of the website for which I own the copyright, what happens if you decide to use those components in your print materials? I could easily argue that your implied license does not extend beyond the web and that you are infringing upon my rights.
The cost of litigating an average intellectual property dispute is probably going to exceed the cost of an average freelance project so I always think it's best for everyone to tackle this issue in an agreement.
Some helpful links:
http://www.copylaw.com/new_articles/wfh.html
http://www.ivanhoffman.com/website.html
Creative Director at Foliovision
12:53AM on 4th September 2009
Hi Patricio,
I see your point. The law currently is in favour of the lawyers. I.e. if you don't have a clear copyright assignment, the work-for-hire precedents are unclear enough that both parties will spend a lot of money on lawyers with no certainty of who will take the day.
What is more troubling is that the laws on copyright and employment vary so widely between jurisdictions. Notably, in France all the laws are in favour of the artist to the point there are many rights which as an artist you are not allowed to forfeit.
I don't judge this as a good thing or a bad thing (it's probably a good thing as it prevents predatory agreements as are common in the United States).
But it does mean that getting clear copyright assignment is very important. I'll have to upgrade our standard agreements to include that language.
Thanks for elaborating on your earlier point and for the links to the legal opinions. This has been a great help.
Tech Reporter at Econsultancy
6:11AM on 4th September 2009
Alec,
Glad they were of help. I definitely agree with you on the inconsistencies in international intellectual property law. As you may know, I live in Chile and it's always an interesting experience as most of the companies I work with are in the US and Europe. Protecting your rights cross-border (and making sure you can enforce them) is definitely an expensive challenge. As they say, the lawyers always win. The key is to have a good one that can help keep you out of trouble.
8:30AM on 15th September 2009
Interesting article, as i had face the same problem initially when i first post my requirements on limeexchange.com but their support suite help me to understand the different freelancers so that i can easily connect to them.