Using Legal Contracts to Avoid Scope Creep

Scope creep occurs when a project strays too far off task due to changes being made or extras being added beyond the original agreement on expectations. Often a client will see something minor they would like to change and request that it be adjusted. One or two incidents of this are typically not a problem, but oftentimes such occurrences snowball and the amount of time spent working on a project ends up putting you over-budget.

Scope creep can cause difficulties for both the contractor and the client. The contractor will feel stressed and overworked because they are doing more wore than they were prepared to do. The client might feel dissatisfied when they ask for something extra and the client is unable to deliver.

There is one easy, simple solution: procure a well-written contractor agreement that clearly defines the scope of the project. Include what you are and are not willing to do, and where you are flexible.  Clearly stated contracts let clients know what to expect and when. They also detail how work will be delivered and what corrections or changes can be made, if any. This ultimately results in a less stressful life for the independent contractor and more satisfaction and value for the client.

Ways to Ensure Payment for Independent Contractors

You have a prospective client or a project on the line and now all you have to do is close the deal.  How do you bid the project out?  What is the best way to quote a rate?  There might not be a 100% surefire method, but I have a few techniques I have found helpful.

A lot of my bidding and rate quoting is based on personal knowledge and proximity to my prospective employer.  When I am able to meet people face-to-face, I am usually able to gauge their interest in working with me and their general budgetary concerns.  When I work with long-distance clients or with clients via internet, I usually have to spell my rates out more clearly and my closing rate isn’t nearly as great as my in-person clients.

Working as an independent contractor, I always ask for a certain percentage upfront on all jobs over $500.  I generally ask for one-third upfront.  That just ensures that my client is serious, fully engaged in the process, and it makes it next to impossible for client not to pay.

Once I have completed the first phase of proofs, I usually collect the second third of the project.  I have found this makes setting appointments with clients to review their project much easier.  It also makes it difficult for clients to take my design work and develop it themselves.

After the project is completed to the client’s satisfaction, I give them the final bill with any and all necessary corrections.  It is not uncommon for clients to initially want to put in some “sweat” equity on their project.  Very often when it comes time for clients to deliver their end of the bargain, they do not.  That is why I have to correct their final bill.  I always promise to keep their final bill within ten percent of the original estimate unless I have received their written consent.

As an independent contractor, I use these steps if I am billing out on an hourly rate or for a fixed rate.  I find it useful to estimate the number of hours it will take me to complete an entire job.  This is helpful for the client so they know what to expect and it helps me to budget my time.

Nailing down your client’s budgetary concerns and needs as soon as possible can be extremely helpful.  If your client is asking for something that cannot be achieved within their intended budget, you need to either decide to take a hit on the project or let them know.  Being open and honest is always the best policy.  Part of being open is being willing to find new, creative ways to complete a project within your client’s budget.

Verbal Contracts – Are They Enforceable?

Verbal Employment Contracts, sometimes referred to as oral employment contracts, are ironically thought to only be as enforceable as the paper they are written on.  Without written evidence, it is hard to hold either party to said contract.

In the IT world, especially the IT independent contractor world, the odds are stacked against IT consultants, in regard to larger clients.  If you enter into a contract without proof or evidence of what you have entered into, it becomes a he said/she said issue.  As a general practice, it is just safer from a personal standpoint to protect one’s self.  Why take the chance of being burned when you are working on a contract to contract basis?  Verbal contracts are a risk to both parties as well.  For my business, I prefer to spell everything out so all parties are on the same page.  Verbal Contracts are easy to forget and often become confusing.

From a “best practices” standpoint, the added expense of a written contract often times pays for itself in practical application and peace of mind.