Work Made for Hire’s Katie Lane Talks Freelance Contracts and the Art of Negotiation
October 17, 2016
For many self-employed creative professionals—like graphic designers, artists, writers and photographers—pesky business tasks such as creating freelance contracts and negotiating pay rates can feel a distraction from the task of creation. But without these elements, a creative pursuit seemingly become more like a hobby and less like a paying business. It can also mean that you’re leaving money on the table—or worse, leaving your work open to exploitation.
Fortunately, for those who feel daunted by these business tasks, Katie Lane of Work Made for Hire in Portland, Oregon offers legal services, negotiation coaching and workshops for creatives. We talked to Lane about how she got started, why you should always negotiate and more. The following excerpts of our conversation have been edited for clarity and brevity.
Susan Johnston Taylor: How did you get involved in the niche of working with creatives?
Katie Lane: My background is in acting and theater. When I was younger, I worked for a theater company and I noticed that when they needed business or legal advice, the advice was skewed towards a totally different type of business. It wasn’t easy for them to find advisors who could speak business, law and art.
When I got out of law school, I realized I needed to pay the bills for a little while, so I took a number of jobs over the years—all of which used my skills in contract drafting and interpretation.
I had looked at going out on my own to work with artists and freelancers, but in Oregon if you’re a lawyer, you have to have professional liability insurance. The yearly cost at that time was like $2,800 and I didn’t think I would be able to make that money back if I started part-time. I started writing my blog and then had to bite the bullet, pay for the insurance and see if it would work out. I worked part-time on my practice for about two-and-a-half years and then went full-time in April 2014.
SJT: I hear a lot of grumblings about freelance contracts getting less friendly. Are you seeing that? If so, how can we combat that problem?
KL: I am seeing that. I’m seeing more and more terms and contracts that try to make freelancers make the same promises that an employee would, but without any of the same benefits that an employee gets from their employer. I think part of it comes from a fundamental misunderstanding of what a freelancer is and what a freelancer does. A freelancer is a small business. It’s not hiring a person to be your almost employee.
Oftentimes when you’re hiring a designer or somebody to help you with a particular project, you’re hiring an expert. You need to treat them the same way that you would hire an expert. One of the things that I advise people to do is to behave like the business that you are:
- Create a business name
- Have the clients contract with that particular business
- Implement policies for your business
If somebody gives you an agreement and says the payment terms are ninety days or whatever, you can say, “Our company’s policy is 30 days. We can offer 45 days but, when we do that, we have to require a deposit of half upfront.” Or the hourly rate increases. Speaking back to the client as a business can be incredibly helpful, because instead of treating you like an individual employee, they start treating you like a business.
Because they’re changing their perspective, it can be really helpful to point out to them how “this is really not in your best interest to try to treat me like an employee and avoid the responsibility of treating me like an employee.”
I know freelancers really hesitate about wanting to push back against terms or negotiation terms, but my advice is to do it—and do it honestly. Say the reason you’re doing it is you need this agreement to be a good representation of the relationship. Understand that you aren’t the first person to ask for changes to this template agreement. The person who gave it to you knows that there are things in the agreement that probably don’t fit the relationship, but it’s more efficient for them to have you do that work. It’s not the end of the world signing a bad contract, but it has the potential of creating problems in the future that you really don’t want to deal with.
SJT: If you push back against a freelance contracts clause and your client isn’t willing to budge, do you think it’s better to walk away or to sign a bad contract?
KL: I think it’s important to figure out where this particular job fits in your over-arching goals. What is the real potential risk of making that promise? An indemnity promise is a promise to protect somebody if they’re sued. It’s usually tied to something you have done or haven’t done.
For instance, it’s really common to say have an indemnity obligation tied to the fact you were the only person that created this thing. You were the original author. That’s something you can control. By being able to control that, you limit the likelihood of the indemnity obligation ever coming up. One of the things to do is look at it and say, “What is risk of me having to fulfill this obligation?” If the risk is relatively low then it can be worth it to sign a bad contract, move forward with the job and get out of it what you need for your career or your business.
At the same time, if what they’re having you promise is so broad there’s no way for you to protect against the risk then you really have to consider if this were to come up, do you have other tools available that can help protect you? One of those tools is liability insurance for the work that you do. If that’s something you can afford, that can be a helpful tool for dealing with those things. Everything is a risk-reward balance.
SJT: What negotiation mistakes do you see?
KL: I think the biggest mistake I see is people don’t negotiate. They assume their client has all of the power. That’s very rarely true. If it is true—if the client comes back and is totally bull-headed about anything, I think it’s a really good indication to you about how they’re going to behave when you’re working together.
I think the other thing that freelancers—especially those in the creative industry—assume is that they don’t have the skills necessary to negotiate well because they’re creative as opposed to analytical. Negotiation is really much more of a conversation. It requires you to understand motivation, to be curious and to be thoughtful looking at a larger picture. All of those things creative people are inherently good at doing because they need those skills for their jobs.