I’m in a quandry. I was hired by a group of doctors manufacturing a single-use, disposable gynecological product to build their brand and market their entry into this new market. After four or five teleconferences, three or four proposal modifications, and the final go-ahead, I felt I was dealing with a group of honorable men.
Apparently not. After one month into this one-year project, I billed them for the first month’s work and continued working. Oh, by the way, I never work this way — billing in arrears. As any consultant will tell you, you need advance payment to begin your project because work done as a service can’t be recalled for lack of payment. But I softened on these guys — they have a good product. I know I could build their brand recognition and increase their sales using my strategies. And after so many conversations, I also thought I was dealing with an honorable company. Not to mention that I was working with my partner who was doing other work for them when he referred me to them.
Well, I billed mid-November 2009 and here it is the first of February and not a dime has come my way. I have talked to them, emailed them and offered to accept payments. Nothing.
What is their reason for not paying? Well, it seems a little false, but they said they didn’t see any results from my work after one month. Anyone who know anything about SEO, ORM and the Internet knows that immediate results are a pipe dream especially for a start-up company with a relatively new product. I was in the first month of a 12-month project building the foundation for the year. Since sales were down from the month of October, they seemed to be looking for any excuse at all to simply not pay.
Two Courts
I have two options: the Court of Law or the Court of Public Opinion. Given the cost of a lawsuit, you can imagine that I am pondering the Court of Public Opinion. My dilemma is that it is my job to help my clients manage their online reputation. I help repair a negative online reputation; I help build a non-existent online reputation (like this client); or I help pave the way for future problem solving by creating a strong online presence in a troublesome industry.
I am simply not interested in damaging anyone’s reputation online.
Likewise, TAO Consultants has been in business for more than 27 years, I am not used to being taken advantage of and my own reputation in my area of expertise is impeccable. I have earned my reputation with successful results for my clients. Ignoring this lack of payment puts me into a frame of reference I am simply not used to.
So let me ask for comments. What would you do? Let it go or go over to the dark side by going public with this client’s name and web address?
I leave it to you.
Chesa Keane
Only you can weigh the time, energy, and $$$ cost of pursuing payment v. erasing the slate and pursuing new business. This reminds me of what David did to our ICS project; fortunately, he did not owe us money directly. The fact that your SEO Focus jumps up #1 and #4 on Google says everything in your favor. Knowing little about the specifics of your issue, I would probably send formal letters first, then formal letters to the organization overseeing ethics in the profession, then put out the same white paper to the best public venue. Then move on.
You did not say how much money is involved, which certainly has an impact on how hard you pursue the funds. Ultimately they pay all, some or none, but meanwhile you really don’t have a client anymore; can you take down the work you did for them? In the middle age of my business I did a lot of work straightening out a network for a local Reno client who paid for awhile, then stopped because “everything took too long”, which it does when you start with a mess, the end is a moving target, and your primary contact has other agendas. When they stopped, they owed an amount equal to about one-third of my normal monthly billing run rate. I had a partner at that time, and he wanted to go to court. After a long, horrible collection phone call with the owner, I discussed it with my CPA. His advice was: quit wasting your emotional energy, accept the loss and move on. Interesting advice from a CPA, but possibly the best I ever received.
My experience with the court system has been very disappointing. Justice is not always served. It is said the laws are made for those who break them and I am in agreement so far.
Wars are started usually by retaliation so i wouldn’t go that route. I admire that you are asking for opinions. You are in the proverbial rock and a hard place.
Einstein: “great spirits have always encountered violent opposition from mediocre minds.”
With all that said…..I think a letter from you sent certified, I would love to know their name, (I would tell them how much my company has benefited from your wonderful company and just mention that I would really hate to be on your bad side considering your expertise….) then a letter from a lawyer also sent certified, then hire a very aggressive collection agency. They may not get a penny, but having been on the other side of collections, they are really annoying and degrading because they constantly remind you and anyone answering the phone at the business that you are in debt… employees most often believe the collection agency and rarely side with the debtor (their employer). I also might explore if i could in any way affect their credit by a lien. Thats all I can think of. Please keep us informed of the outcome.
There an old story in the field of collections about a guy who was owed money by a company that wouldn’t pay. So he didn’t shower or shave for a week. Then he put on his crappiest clothes and headed out to the offending business’s office. He stopped on the way to roll around in a dumpster for awhile, then showed up at the company’s reception area, sat down, opened a magazine, and began to read. The receptionist asked what he wanted, but instead of answering he simply handed her a copy of the unpaid invoice. Meanwhile, business people, customers, etc kept coming in and going out of the reception area, staring at him and holding their noses. Someone from accounting soon showed up with a check for payment in full. So he took it and left.
The point is in collections there is only one strategy - leverage - and leverage can be the oddest thing. You don’t have a lien, or any form of security, and you can’t repossess their car or furniture. So unless you want to call them on the phone 25 times a day and make a total pest of yourself (which might work) you’re stuck having to use whatever other form of leverage you can figure out.
If it were me, I’d do it. I wouldn’t let it go. Business people who don’t pay their bills aren’t doing business; they’re stealing. They deserve whatever happens to them.
I sympathise with your situation and I abhor the actions of your “client” (aren’t clients supposed to pay?). Whilst I’d be sorely tempted to go public if I were in your position, ultimately I don’t think I would (certainly not until you’ve applied a little more behind the scenes pressure). My main reason this approach is that if you go public, your client may respond in kind, making allegations about the quality or efficacy of your services. I know you could address that with testimonials from many happy clients, but would you really want that discussion going on in public? I also fear that the time to resolve this issue may exceed the amount of time you’ve already spent, as well as being emotionally draining. I guess the final decision will be influenced by how much you’re owed, but I think my approach would be a formal request from you for payment, followed by a lawyer’s letter if that doesn’t work. Aim for a compromise payment (at worst) and move on to better, more honourable clients.
You and I have both represented individuals who have been wronged by companies, helping them take their case to the court of public opinion when they were, in all likelihood, unable to afford the cost of a court of law. In my opinion, it’s a “physician heal thyself” situation. I have had to inform non-paying clients, and paid services that provided poor service (currently Logitech), that while I would PREFER to resolve matters quietly, their inaction would leave me no choice but to pursue options available to me in a court of law or the court of public opinion. If I was a litigator, I’d go to the former but I’m not, I’m a crisis manager, so I use the tools my Higher Power gave me.