Contractually

Although new to the digital signature scene, Contractually boasts several impressive features to speed up the negotiation process. You can use their lawyer-reviewed forms, add one of your own, and even customize your forms with their online contract editor, which notifies all parties of any changes made to their contracts, as well as the differences between different versions.

Contractually also goes some way to eliminating confusing emails and other communications around negotiations with built-in questions, requests, and replies that are kept with the contract and that are visible to all participants. Plus, all messages, attachments and change histories are stored with contracts for future reference.

ContractPal

ContractPal calls itself an “electronic signatures cloud” and offers several features to help reduce certain hassles of contract negotiation, like incomplete documents, which are reduced through what it calls a “reflexive questioning engine.”

ContractPal also automatically routes forms and agreements based on content and parameters you set so that you’re not waiting on approvals or revisions. Plus, it can even accept payments.

GoPaperless

GoPaperless is another solution that provides simple digital signing of documents. Not quite as feature-rich as Contractually or ContractPal, it’s an easy-to-use alternative that offers basic “click to sign” functionality with security through layered encryption, password-protected signing sessions and session activity tracking.

It also provides the ability to export to a variety of formats, as well as have multi-party contracts with a controlled sequence of signers.

DocuSign

Another simple and straightforward solution, DocuSign’s basic-level service collects electronic signatures, authenticates recipients and tracks all activity for a document and is available online and through mobile devices, like the iPhone and iPad.

It offers several additional features with its more advanced editions, including collaboration, document routing, and user and group management.

Adobe eSignatures

Adobe eSignatures has been around for a while and was reviewed by Charlie just last year.  It offers perhaps the most basic of e-signing solutions and is free to use. Just upload your document, enter the email address of your recipient, select a due date, and sign the document yourself, unless you opt to sign after all other signatures have been collected.

RightSignature

RightSignature might tout the fastest process for sending electronic documents for signature with its “one-minute send,” but it also offers more elaborate features than services like Adobe eSignatures, such as handwritten signatures, webcam photo authentication, digital fingerprints and iPhone mobile signing.  It also offers a unique “NaviGuide” flag to point signers to the next required field, as well as a checklist and progress meter to show users what needs to be done to complete the process.

EchoSign

EchoSign works in more of an email-like interface and allows you to control how your documents are signed, whether by e-signature or fax. Its “MegaSign” feature is helpful for documents that require acknowledgement from large groups of people, at the end of which a complete activity report is generated showing who has and hasn’t signed the document. This is helpful for things like policy changes and other situations where you need all employees to sign off on something.

What applications do you use for negotiating contracts and getting them signed online?

Photo courtesy Flickr user sure2talk

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Contract Templates and Wizards

The hardest part in getting contracts in place is the drafting of the agreement itself. Unless you already have a lawyer who has created your documents for you, finding the best template can take a lot of time and effort. No matter how good a contract template is, it’s rare to find one that perfectly suits your situation. The good news is that there are some useful resources that can do this for you at the fraction of a cost of hiring a lawyer. Do-it-yourself solutions such as FastDue and RocketLawyer are good places to start, and we’ve covered both of these in the past.

RocketLawyer has a collection of business legal forms ranging from consulting agreements to articles of incorporation. You fill out a simple questionnaire and a document is customized based on your answers. Other features include e-signature and the ability to collaborate on documents. Google Docs users can also use free RocketLawyer templates, but you’ll have to customize them yourself. If you want to know more about RocketLawyer, start by reading Imran’s review.

FastDue also provides templates for contracts and agreements, although not as many as RocketLawyer. One advantage, though, is the variety of forms on offer, including past due notices, invoices, expense reports, and receipts. The forms also include interactive messaging, allowing your clients and colleagues to make comments directly on the document itself.  The free service offered is enough for a freelance contractor, but you can sign up for the premium service if you want something more robust.  Thursday covered FastDue’s services in a previous article if you want to learn more.

Sending and Signing

Once you have your contract ready, it’s just a matter of sending it and having it signed. Some contract creation wizards offer free e-signature functionality as part of the service, but there are plenty of other e-signature apps. Here are some of them:

• EchoSign. There are two ways to sign a document via EchoSign. Users can simply type in their initials or, if they prefer an “old school” analog approach, they can print the document, sign it and fax it in. EchoSign can also integrate with Google Docs and Zoho Writer.
• DocuSign. Just like EchoSign, DocuSign is a web based e-signature service. Additional features include CRM integration the ability to embed your signable documents within your web site. It also offers mobile signing if you want to use your cell phone or BlackBerry.
• E-lock. E-lock has signature solutions for both the web and your desktop. The desktop application integrates with MS Excel, MS Word, and Adobe Acrobat.

For colleagues and clients who prefer a written signature rather than a digital one, you could send your contracts via online faxing solutions such as MyFax and eFax. To make the process easier, I just pull up one of my scanned signatures on file and paste it into the document. Then, I export the entire contract as a PDF and send it off as an e-fax, avoiding any printing on my end.

There are a couple of disadvantages to e-signing, however. Some people might not read their contracts thoroughly. To prevent this you should attach a note emphasizing the importance of reading the entire document or even discuss it on the phone paragraph by paragraph, if needed. Also, you need to make sure that e-signatures are legally valid in the states and countries where each signatory resides.

With all these available tools, we no longer have an excuse to take contracts for granted. Getting the right document and the necessary signatures is only a few clicks away.

How do you manage your contracts and other legal documents? What tools do you use?

Photo by stock.xchng user wagg66

You can find scores of articles talking about the dire state of the economy leading big businesses to pay late and collect fast and people struggling to keep their businesses afloat. We’ve provided some tips on dealing with non-paying clients previously, but here are some techniques used by businesses that have have collected payment without breaking knees or relationships.

Before Starting the Project

• Add clauses to the contract: Writer Laura Bergells of Maniactive picked up this tip from an editor. “In the contract, state that you own the copyright up until the point of final payment, at which point the copyright transfers to the client. The threat of a copyright lawsuit is often stronger than a suit for non-payment of services,” Bergells says. Since you can’t predict whether a client will be late with payment, cover yourself by saying the service you provided remains yours until the payment is made.
• Build relationships: If you work with an organization rather than a couple of people, work on building relationships with people in the organization from the get-go, as those people can step up for you. “When a late payment becomes a serious issue, key people inside the organization will fight for you to get paid immediately. I’ve been known to send a large bouquet of flowers just to say ‘Thanks for going to bat for me.’ Acting like a jerk may get you paid once, but acting like a professional will get you paid consistently for the long term,” says Nestor G Trillo, an interactive strategist at Ava Niu. Trillo’s company will stop working with clients who consistently pay over 90 days late.
• Use a credit card payment system: After losing $5,000 in payments, Chief Executive Officer Matt Scherer of Scherer Communications started using a credit card payment system that works well for him. I can hear some of you saying you don’t want to give the credit card company a percentage of the money you earned. Scherer works around that with a contract template that includes a one-time charge that covers the credit card fees. Another option is to add an item to the invoice to cover the credit card rates.
• Outline the project or product at the start: At the start of a project or before selling a product, outline the specs, time frame, payment time frame, the cost of not paying on time and a discount rate for paying quickly. The helpful thing about this set-up is that it covers the project or product — not just payment. Have the client sign off on these requirements binds them and the penalty and discount part can be a powerful motivator.

After the Project is Complete

It’s best to be proactive before starting the project to ensure you receive payment on time. But it doesn’t always work out that way.

• Give discounts: Offer a discount on the invoice if the client pays within x days. “One thing has worked well for us — giving a 2 percent discount if they pay in 10 days. And, to note the discount and savings on the invoice,” says Michelle H. Wallace, an independent consultant. She has seen success with this set up for both clients and vendors. “The tradeoff between waiting for the full amount and improved short-term cash flow was a no-brainer. Plus, my company got to buy more hours, and improved responsiveness on our payables. It was win-win.”
• Use Priority Mail envelopes: Have you tried calling and emailing your late paying client? Michelle Dunn, a credit and debt collection expert, has a solution that she reports works 98 percent of the time. “Go to the post office and get a cardboard red, white and blue priority mail flat rate envelope. Put a strong collection letter in the envelope send it out with delivery confirmation and wait for the check to arrive.  Make sure the letter you use, has specific amounts, and the date you need to receive the payment by,” says Dunn.
• Send Postcards: Cliff Stepp has a creative solution to the “old past due notices being shoved aside” problem. So he started sending his client colorful retro postcards with a humorous twist. “After the second postcard, the 120 day + bill was paid in full!” Stepp says.
• Use a letter template: Melinda Mallari sends a letter with the following message, “We are unable to find a record of payment for Invoice # dated ___. Could you please send a copy of the canceled check or a credit card statement verifying the payment transaction so we can update our files? We apologize for the inconvenience, and appreciate your kind assistance in this matter.” This works 80 percent of the time.
• Explain the impact: Tell your client straight out how your business works in providing a product or service. Mary E. Davis, author of “The Entrepreneurial Mom,” finds this process pays off and shares an example. “I remain business-like, but explain that ‘I am a small business. And when I have even a few clients who let their accounts fall behind, that it impacts me in a tremendous way.’”
• Withdraw payments with automated clearing house (ACH) network: CPA and Director of Development for Treasury Software Glenn Fromer explains that collecting payment through ACH, businesses won’t have to deal with credit card merchant and processing fees. Small and medium businesses can use the service, which is available from commercial banks.
• Take the nice approach: Laura Posey, vice president of Dancing Elephants Achievement Group, struggled to get a client to pay after being 120 days late. She did what many do: sent email or called the client every few weeks. Then she moved on to the next step and emailed or left a message for the client on a daily basis while letting the client know she was concerned, not angry. “By the second email, the client sent me an email telling me that she had had an unexpected death in the family and she had let lots of things slide during that time. She apologized profusely and sent the payment right away,” Posey says. She received a reward for her gentle handling of the situation and landed more projects with the client.

How do you collect late payments while keeping the client relationship intact?

Photo credit: Jeinny Solis S.

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• Consulting agreement
• Finder’s agreement
• General release
• Non-disclosure agreement
• Non-circumvention agreement
• Promissory note
• Sale of goods agreement
• At-will employment agreement
• Intellectual property agreement

Each template is fairly basic. The consulting agreement, for instance, offers spots to fill in information about both parties, as well as nine terms (each of which you can choose to remove, as well as an option to add further terms). Each term is constructed in legal terms, but most have several spots that are filled out with something along the lines of “Insert description of services and schedule.” You can also customize agreements with your own logo.

The web site provides a service beyond simply letting you put together templated agreements. It also allows you to acknowledge contracts, effectively signing them online without the back and forth or hunt for a fax machine that a printed contract can require. The interface can also make negotiating contract terms relatively simple, including a messaging system that allows you to walk through each term with a prospective client. You can also email forms, and save them as PDFs from the interface.

If you read through FastDue’s documentation, you’ll come across the suggestion that you run any legal agreement you make past a lawyer before you sign off on them. In general, I can’t recommend anything else — the fact is that we all really ought to run any contract we sign past our lawyer. But things don’t always work out that way. For web workers, it’s not unusual to sign a contract with a client in another state or even another country. Most lawyers are very familiar with the laws in their home state, but aren’t as comfortable with how laws in other states or countries can affect your agreement. To make matters more complicated, some freelancers and other web workers take on new projects often enough that taking each new contract to a lawyer has a prohibitive cost.

It’s not a perfect solution — after all, not all jurisdictions recognize electronic signatures on contracts yet. But FastDue does make it possible to get an agreement in place quickly, making it easier for web workers to create new contracts and legal agreements on the fly. As long as you feel comfortable with handling your contracts online, FastDue is a good solution to simplify the process.

Where do you get your legal documentation drawn up?

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It most likely isn’t, so don’t panic. There are steps you can take to mitigate the damage and come out as clean as possible on the other side.

I’ve run into this situation on two previous occasions. Once, I brought it on myself; the other time, the firm I was working for passed me a project due to staff transitions that had already been handed off so many times there was no clear record of who began it. The following tips come from what I learned from both experiences.

Review Your Initial Commitment

Before you resign yourself to failure, make sure you aren’t mistakenly writing off a success. The parameters of an engagement have a tendency to shift once you’re underway, and you end up doing work that you never planned or promised to do in the first place. The temptation is just to keep working as long as the client is willing to pay you, regardless of scope changes, but that’s not always the best way to go about it.

If you’ve already accomplished what you intended, and you haven’t renegotiated based on a scope change, you might want to bring it up with your client, especially if you feel you’re getting out of your depth. Better to cut your losses and suggest another service provider with expertise in the new area. Your client will think better of you than if you carried the project through to completion but did a sub-par job.

Provide a Transition Package

If you have to leave work half-done, your client will likely want to have it completed either in-house, or by someone else. You can make that person’s job a lot easier, and soothe your client, by preparing a hand-off package. This can contain any number of things depending on what you’re working on, but make sure to detail your workflow to date, what has and hasn’t been accomplished, and what might need to be reviewed or corrected.

A smooth hand-off is especially important if you’re giving the project to someone else in a firm that you work for, but it’s a definite must either way. It proves to your client that you’re a consummate professional, even if this particular situation is beyond your expertise.

Propose a Solution You Can Provide

Just because you may not be able to give the client exactly what they want doesn’t mean you can’t come up with another, possibly better solution. There are often more than one means to an end, and providing a client with alternatives will also show them that you’re committed to the project and trying to exhaust all possibilities before throwing in the towel.

Be careful how you frame alternative suggestions. Some clients will respect your opinion immediately because they hired you. Others, though, will be quite set about how and what they want you to deliver, so proposing alternatives will be a delicate matter.

Payoff

In the best of all worlds, we’d all finish all of our contracts with a 100 percent satisfied customer, who got exactly what they were looking for. In fact, that’s not always possible. Falling short is a depressing event for any freelancer or contractor, but with a little care, it can be just another unpleasant memory and not a career-ending disaster.

What do you do when you can’t deliver on a project?

Image by flickr user purpletwinkie.

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Yes, there is a trade-off in terms of customizability when you compare Proposalware’s simple template to your own original documents, but what you gain in exchange might make it worth your while, depending on your field or industry. In fact, you may find that you’ve been overdoing your proposals, and that the simple template provided by Proposalware is much more in line with client expectations. I’ve seen many a tarted-up proposal go ignored while a much more basic document struck home.

Proposalware’s bid document is exactly what one should be: a prospective invoice. In fact, the app offers the ability to create both, since for most types of projects they should resemble one another as closely as possible. The idea is that you list items and services with an attached cost, enter the amount the client can expect to pay, and then just send off the automatically generated proposal for your customer to (hopefully) OK. By default, that’s all Proposalware offers — a list of 10 items, with fields for quantity, description and price. The total cost is tallied once you’ve entered your items, with an option to apply tax, if necessary.

If you need more detail, you can edit the line items and proposal header. Each item can have a photo attached to it, and a short, long and full description. Those who offer the same items over and over again or a combination of a pre-set number of items will probably find this feature very handy. I think it’s less useful for services, for which an image doesn’t often apply, and often requires specific tailoring for each individual engagement. You can also customize the proposal terms and conditions, which really helps if you want a client to take your document seriously.

The main advantage of Proposalware is that it’s web-based, and it can be used without any special programs (like Word) required. If you get a call for submissions while you’re visiting a strange city, all you have to do is find an Internet café or even just a computer with access that you can use, and you can bid in no time, especially if the project only calls for a cookie-cutter type of response. Even if you can’t get to a computer, by navigating to mobileproposals.com using a smartphone you can access all of the regular features of Proposalware in an easy-to-use mobile format.

Your client receives a straightforward, professional looking document via email. They can’t digitally sign it through Proposalware, but it’s better than getting a Word document which they then have to open in a separate program in order to respond to. The only flaw I can see is that clients who can’t receive HTML formatting in their company email won’t be able to access your proposal.

It’s worth noting that Proposalware isn’t free. They offer a 60-day free trial for all new users, but afterwards, you’ll have to sign up for one of two paid options if you want to keep using it. The first costs $9.95 per month, while a second will set you back $99.95 for a full year. If your current proposal process is costing you contracts, Proposalware is worth considering. Your best bet is to see if your win rate changes within the 60-day trial period.

Has using Proposalware improved your contract win rate? Let us know in the comments.

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Get Feedback

I wanted to start with feedback because it’s valuable regardless of the outcome of your contract engagement. Whether your client loved you or hated you, finding out why can only help you in the long run. You can use feedback to spot your faults and improve, to capture best practices, and to help convey the impression to your employer that you’re a conscientious worker.

There are different ways to go about soliciting feedback, and some methods might be more effective than others depending on who you’re working with. Some prefer a personal approach, but in all cases I find it best to have an Adobe feedback form ready to go soon after the project starts. Generally, you can use one standard form, and maybe tailor it a bit for different clients. Adobe forms have the advantage of being portable, accessible on every platform, and easy to create.

Recover Intellectual Property

When you’re doing work for a client, you’re also doing work for yourself, in that you are producing IP that you can use to sell your services to other clients. Valuable IP could be templates, presentations and even content sometimes. The key is knowing what you can and can’t shop around once the contract has ended.

As long as you scrub anything that you actually create for a client of any reference to their company, and of any client-related content, you should be able to use it going forward either to demo your abilities to others, or as the basis for future work. No use reinventing the wheel every time, right?

Ask for Another Contract/Reference

If you don’t ask for more work, most of the time you won’t get it. Even if someone was pleased with what you gave them, they might not even think about recommending you for upcoming contracts in their own or other areas for the simple reason that it just didn’t cross their mind. A lot of contractors will shy away from asking about future projects directly because they don’t want to appear needy or desperate, but there’s nothing needy about wanting to work.

As for references, you’d better ask if you plan on using them at all in the future, because even if you think a project went wonderfully, the person paying the bill might have different ideas altogether. Failing to ask about references is something that can seriously affect your ability to secure work in the future. It’s better to be sure someone doesn’t like the work you did than to assume they did and leave yourself open to the possibility that they didn’t. There’s also no harm in asking if you can use a showcase project in your sales efforts.

Some of these steps may seem more obvious than others, but all are designed to make sure you get the most out of the end of a contract. It’s a time when you may feel overwhelmed, and things tend to happen in rapid succession, but if you’re prepared and you develop a routine that’s easy to replicate, it can be a positive experience, or at the very least not a total write-off. The nature of the freelance web working beast is that all contracts must end, so there’s no reason not to be prepared.

What procedure do you follow when closing a contract?

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Then there’s that 0.5% that I wish I never worked with.  They scammed me out of my work, never paid, and tried to get away with it.  After taking advantage of me, they repeat the same process with the next freelancer, and the next, and the next, until threads about their scamming ways start appearing in message boards.  Does this sound familiar to you?  If not, count yourself lucky.

It’s a good thing that this hasn’t happened to me in the last three years.  I probably owe this to the fact that I pay attention to any red flags or hunches I get when negotiating with new clients.

Things to watch out for

Of course, the first place where you can spot any red flags is the first email you receive from a prospective client, or the ad they place.  Previously, I talked about dissecting online job placement ads.  One of the points I raised was that the way an ad is written often reflects the communication style of the business.  If the ad is very detailed and well written, it usually indicates professionalism.  It’s alright for potential clients to have grammar or spelling mistakes, but when the sentences are too vague or hardly make sense, future communication might be such a hassle.  The same could be said for the first exchange of emails.

Watch out for ads with a defensive tone, such as “Don’t send an outrageous quote, as I can get my neighbor’s son to do this” or “This shouldn’t cost/take more than….”  This just goes to show the small value they’ll be placing on you and your work.

The number one thing that makes me nervous about a potential client is when they’re hesitant to sign a contract.  Not because of anything in the contract per se, they just don’t like contracts, period.  I’ve yet to hear a solid argument against a contract, but here are some of what I’ve heard so far:

• “But it’s only for 3 articles! Surely, you don’t need a contract for a job this small.”
• “I never had to sign a contract with a freelancer before, why should you be the exception?”
• “What for?  I trust that you’ll deliver your end of the deal.  Don’t you think it’s unfair that you don’t trust me?”

Here’s why no argument ever works: the contract is there to protect the rights of both the freelancer and the client.  It defines who owns the work, the scope of the project, and the details of the payment.  It sets clear expectations on both sides, with each party feeling confident that he or she won’t be messed around with.  Honest clients usually understand and appreciate having a contract, even if you’re the first freelancer to send them one.

Another thing that raises my doubts is when the new client wants to pay only when you’ve sent the entire project to them.  They don’t want to make down payments, and they don’t want to pay you after each project milestone.  You’re supposed to fulfill your end of the deal first, and then get paid.  After all, how can they trust you when they only met you online?

Agreeing to this kind of payment scheme is like leaving your laptop unguarded in a busy coffee shop, with your PayPal username and password as the desktop wallpaper, to boot.  You’re setting yourself up to be robbed.  True, your client might have made an honest mistake, but if they can’t see how this kind of arrangement is grossly unfair to you, then the project isn’t worth the risk.

It’s also important to pay attention to what comes up when you’re profiling your client.  You’re bound to research your new client anyway, especially for big projects.  What comes up when you enter his name or the company name into a search engine?  Are there any negative results?  How does he answer the client questionnaire you sent?  Is he evading questions that are integral to the project?

What to do when a red flag goes up

Like I said earlier, a red flag is sometimes an honest mistake.  But this doesn’t mean that you should spend hours of your time trying to convince your client to agree to the conditions you want to set.  If you’ve sent the email or made the phone call that explains your side, that should be enough.  Otherwise, you’ll just be wasting your time and energy with a person or business that doesn’t respect the work that you do.

Were you ever scammed by a client?  How did it happen?  Was there anything that raised your doubts from the start?

Image by Simon Cataudo from sxc.hu

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