Ask HN: Bad situation – how long of a notice should a consultant give a client?
11 comments
"Customary"? For a consultant, you'd normally down-tools as soon as the first invoice is overdue.
Depending on how you packaged up that "estimated 150hrs" originally, you might not (yet?) have an overdue invoice.
Just how bad is "the contract"? Could the client plausibly claim you've failed to deliver on what he's already paid $6700 for? If so, you might need to finish off whatever needs doing to meet your end of the contractual obligation (or be prepared to give some/all of that money back). If the contract was "150hours work, estimated to be sufficient to complete the project", you're fully entitled to stop and ask for more money before continuing (although if it was _your_ estimate, you'll have some questions to ask about why it was so badly out).
Depending on how you packaged up that "estimated 150hrs" originally, you might not (yet?) have an overdue invoice.
Just how bad is "the contract"? Could the client plausibly claim you've failed to deliver on what he's already paid $6700 for? If so, you might need to finish off whatever needs doing to meet your end of the contractual obligation (or be prepared to give some/all of that money back). If the contract was "150hours work, estimated to be sufficient to complete the project", you're fully entitled to stop and ask for more money before continuing (although if it was _your_ estimate, you'll have some questions to ask about why it was so badly out).
How important is the relationship and other interests?
Are you working based on the idea that the relationship is important, and the other side is hard-balling you?
Is walking away that risky that you don't want to do it?
I focus on 'relationship' as you mention being sweet-talked. Are there other interests that this client thinks they have you owing to you, or you owing in them, that make them (or you) behave like this?
If not complex with multiple vested interests, wait until Monday (Mondays are good for breaking news, as people can stew over things on weekends and it gives you weekend planning time), create some really specific criteria for both what you do that is billable and what you think is OK for continuing the contract. If it is far longer than he thinks, then tell him how long it will really take, or do something even more simple and bill on product specification, not hours, and ensure re-billing is done on any change of product specification (which should include testing checklists).
If they decline, then walk away. Don't be sweet talked by someone with no sweets in their pocket.
Are you working based on the idea that the relationship is important, and the other side is hard-balling you?
Is walking away that risky that you don't want to do it?
I focus on 'relationship' as you mention being sweet-talked. Are there other interests that this client thinks they have you owing to you, or you owing in them, that make them (or you) behave like this?
If not complex with multiple vested interests, wait until Monday (Mondays are good for breaking news, as people can stew over things on weekends and it gives you weekend planning time), create some really specific criteria for both what you do that is billable and what you think is OK for continuing the contract. If it is far longer than he thinks, then tell him how long it will really take, or do something even more simple and bill on product specification, not hours, and ensure re-billing is done on any change of product specification (which should include testing checklists).
If they decline, then walk away. Don't be sweet talked by someone with no sweets in their pocket.
I wrote about my own experience with this sort of situation here:
https://news.ycombinator.com/item?id=7831477
You need to firmly end the scope creep, now. Explain that:
* the project has blown way out, that the engagement is no longer benefiting you
* if they want to continue working with you they're going to have to negotiate a new deal
https://news.ycombinator.com/item?id=7831477
You need to firmly end the scope creep, now. Explain that:
* the project has blown way out, that the engagement is no longer benefiting you
* if they want to continue working with you they're going to have to negotiate a new deal
Sorry to hear about the stressful situation. I rarely cut an engagement short, but there's nothing wrong with doing it. Just decide how many more hours you're willing to put in to do a decent job wrapping things up, and then tell the client you're not available past X date and what you're doing to leave them in a good place. In my experience, professional people have no trouble understanding that. How you communicate is more important than the actual details. No matter how stressed you are, you can be courteous but firm.
One last thing: consulting is NOT "just like [with] employment." The "walk away at any time" bit is there for a reason.
One last thing: consulting is NOT "just like [with] employment." The "walk away at any time" bit is there for a reason.
It depends on what you want out of the situation.
If you genuinely just want to be rid of the client, then just walk away. You've done more than enough already.
If you want to see if you can turn this problem-client into a good one, then maybe you can talk with them (firmly) about setting up a payment plan or some-other-way for them to pay off the extra work you've been doing.
If you want a good reference from the client in the future (semi-important if you're still building-out your portfolio) then maaaaaaybe I'd transition away over 2 weeks or so. But that's only if their reputation is fantastic and they'd make a great reference in the future.
If you genuinely just want to be rid of the client, then just walk away. You've done more than enough already.
If you want to see if you can turn this problem-client into a good one, then maybe you can talk with them (firmly) about setting up a payment plan or some-other-way for them to pay off the extra work you've been doing.
If you want a good reference from the client in the future (semi-important if you're still building-out your portfolio) then maaaaaaybe I'd transition away over 2 weeks or so. But that's only if their reputation is fantastic and they'd make a great reference in the future.
If you haven't been paid all that you are owed, stop work immediately.
The customary notice is exactly in the contract.
The problem with providing services at below the market rate is that you've told the client that your time isn't very valuable. Cheap clients are not worth having. Part of the reason is that they prevent you from getting better work.
Good luck.
The customary notice is exactly in the contract.
The problem with providing services at below the market rate is that you've told the client that your time isn't very valuable. Cheap clients are not worth having. Part of the reason is that they prevent you from getting better work.
Good luck.
Sounds like the client has you trained. Everything the client asks for, you give in. What do you think the client is going to keep doing?
Or looking at it another way, OP has trained the client to continue to act this way by rewarding his undesirable behaviour.
Its like giving a dog a biscuit every time it pisses on the rug.
Still, I feel that the fair solution to both parties is to explain to the client why the important and urgent items are going to take much longer than he thinks.
OP could look on this gig as an opportunity to train himself in managing clients, and therefore walk away with some benefit.
Its like giving a dog a biscuit every time it pisses on the rug.
Still, I feel that the fair solution to both parties is to explain to the client why the important and urgent items are going to take much longer than he thinks.
OP could look on this gig as an opportunity to train himself in managing clients, and therefore walk away with some benefit.
1) Stop working right now. Fuck the business continuity documents. You're more than double over your budgeted hours.
2) Take 40 minutes of your invaluable time and listen to Mike Monterio's talk, "Fuck you, Pay Me". https://vimeo.com/22053820
How the client will take it is relative to how it impacts you. The worse it is for you, the less it matters how it impacts a client. Ultimately, you are responsible for the position you're in, but the client is complicit. There's a good chance that you won't be able to use this client as a reference, and do not kid yourself by believing that you can "explain the situation" to future clients. It's time to cut your losses and move on.
You are currently working for job rate of $17/hr ($6000/350). As a consultant, you are underwater. It will take time to find more work, which must be factored in to your hourly rate. I used to compute average hourly working rate on an quarterly basis: total billings for the quarter divided by gross hours worked. The gross hours worked number included admin time, which I billed to my own company. You're cruising toward McDonald's wage if you don't turn this around.
I'm going to assume that this was a fixed-price contract, and that you included a budgeted number of hours in your contract. You need to draft a communication explaining that you've more than doubled the number of budgeted hours for the project, and that you cannot continue working unless the customer is willing to enter in to a new contract with additional billing.
If your original contract did not include a budgeted number of hours, then you're really in a bad spot. The best you can hope for is that you can walk away and not have the customer come after you for failure to deliver, and demanding a refund.
The key to all of this is communicating early, and communicating often.
Do not worry that the customer will be annoyed.
Do not worry that they won't like you.
Do not worry that you're asking for too much.
Tell the client that you've worked over twice the number of budgeted hours, and that you're not willing to go any further.
Tell them what your time is worth, and that you'll be happy to provide them with an estimate to complete the project.
When you deliver that estimate, make sure your rate is solid, and that the estimate includes a budgeted number of hours. Deliver a weekly report of the hours consumed and the work completed. Book the time required to track this information to an "admin" task. Include that item on your billing, but bill it at a $0 rate. Explain to the customer that this line item is the time required to track the progress of the project, and that you're such a nice guy, you're not going to bill them for it.
I wish you the best of luck, but I've been in this situation before as well. I've been worse. I've had a developer flake out, and I had to write a check back to a customer. This is consulting. You win some; you lose some. That's why consulting rates are $250/hr when wages are $50/hr. There are costs external to the customer's job that must be priced in. The customer's alternative is to hire someone (muy expensive), or to find some other schmuck to do the job on the cheap. The trick is not to be the schmuck.
EDIT: After submitting this, I realized that I didn't address your $60/hr billing rate. That number is insanely low for a consultant. If you're a rock star and you've got work lined up for months you can optimistically expect to hit 80% billable time. That is 80% of your 40 hour work week will be billable. Do the math:
80% of 40 hours is 32 hours a week of actual billable time.
On an annual basis, how many weeks of work do you think you can line up? My experience was around 3 out of every 4 weeks. That's 39 billable weeks a year.
With those numbers, you're on track to make around $75k a year. That's if you have a mature business with a good client book and return work. It took me three years to get there.
The other problem with a $60/hr billing rate is that you'll attract $60/hr customers. Otherwise known as people who will run you double-over your budgeted hours and demand that you keep going. Fuck those people. Double your billing rate and start selling solutions, not technology.
See also: https://news.ycombinator.com/item?id=6717875
2) Take 40 minutes of your invaluable time and listen to Mike Monterio's talk, "Fuck you, Pay Me". https://vimeo.com/22053820
How the client will take it is relative to how it impacts you. The worse it is for you, the less it matters how it impacts a client. Ultimately, you are responsible for the position you're in, but the client is complicit. There's a good chance that you won't be able to use this client as a reference, and do not kid yourself by believing that you can "explain the situation" to future clients. It's time to cut your losses and move on.
You are currently working for job rate of $17/hr ($6000/350). As a consultant, you are underwater. It will take time to find more work, which must be factored in to your hourly rate. I used to compute average hourly working rate on an quarterly basis: total billings for the quarter divided by gross hours worked. The gross hours worked number included admin time, which I billed to my own company. You're cruising toward McDonald's wage if you don't turn this around.
I'm going to assume that this was a fixed-price contract, and that you included a budgeted number of hours in your contract. You need to draft a communication explaining that you've more than doubled the number of budgeted hours for the project, and that you cannot continue working unless the customer is willing to enter in to a new contract with additional billing.
If your original contract did not include a budgeted number of hours, then you're really in a bad spot. The best you can hope for is that you can walk away and not have the customer come after you for failure to deliver, and demanding a refund.
The key to all of this is communicating early, and communicating often.
Do not worry that the customer will be annoyed.
Do not worry that they won't like you.
Do not worry that you're asking for too much.
Tell the client that you've worked over twice the number of budgeted hours, and that you're not willing to go any further.
Tell them what your time is worth, and that you'll be happy to provide them with an estimate to complete the project.
When you deliver that estimate, make sure your rate is solid, and that the estimate includes a budgeted number of hours. Deliver a weekly report of the hours consumed and the work completed. Book the time required to track this information to an "admin" task. Include that item on your billing, but bill it at a $0 rate. Explain to the customer that this line item is the time required to track the progress of the project, and that you're such a nice guy, you're not going to bill them for it.
I wish you the best of luck, but I've been in this situation before as well. I've been worse. I've had a developer flake out, and I had to write a check back to a customer. This is consulting. You win some; you lose some. That's why consulting rates are $250/hr when wages are $50/hr. There are costs external to the customer's job that must be priced in. The customer's alternative is to hire someone (muy expensive), or to find some other schmuck to do the job on the cheap. The trick is not to be the schmuck.
EDIT: After submitting this, I realized that I didn't address your $60/hr billing rate. That number is insanely low for a consultant. If you're a rock star and you've got work lined up for months you can optimistically expect to hit 80% billable time. That is 80% of your 40 hour work week will be billable. Do the math:
80% of 40 hours is 32 hours a week of actual billable time.
On an annual basis, how many weeks of work do you think you can line up? My experience was around 3 out of every 4 weeks. That's 39 billable weeks a year.
With those numbers, you're on track to make around $75k a year. That's if you have a mature business with a good client book and return work. It took me three years to get there.
The other problem with a $60/hr billing rate is that you'll attract $60/hr customers. Otherwise known as people who will run you double-over your budgeted hours and demand that you keep going. Fuck those people. Double your billing rate and start selling solutions, not technology.
See also: https://news.ycombinator.com/item?id=6717875
Stop doing anything for the client until he pays. For your purposes, "pays" might just mean the money is in escrow until the work is done. But the client needs to demonstrate that the money exists and will be given to you.
I've dropped a couple of clients, usually over some kind of billing issue or abuse. I don't regret losing the relationships, but I would handle it a lot differently now (they happened earlier on in my business, and I was partly at fault too).
"Hi, we really need to talk about how your project has been progressing. I've put a lot of effort in to it, with a lot more hours than we originally discussed. I want to see it finished to your satisfaction, but I'm also not making enough money right now to cover my expenses. I have to start looking for more income immediately.
I'll finish a few more items [..., ..., ...], but if you want [..., ..., ...] done, I have to bill you at a normal professional rate. Since we've worked so hard together on this, I'll charge a little less than my next client. Let's say $400/day. I'll do my best to give you an estimate for new features."
And negotiate from there. Put the ball back in his court; let it be his decision to either pay you or discontinue the project.
Most folks understand that they can get any 2 of cheap, fast, or good; if he can't afford the budget for the project, he'll either drop it or negotiate with you and you can offer to wind down the project at a rate that you're happier with, spending far less time on it. Or, he'll come up with the money; I've had a few clients suddenly show up with a nice check once I say, "I can't keep working on this for you at your original budget."
I started doing the "straightforward & honest" thing with clients a little over a year ago. I dropped all pretenses about money and how great business is (it's not bad, but it could be better). I thought everyone would stop working with me. What happened instead is almost everyone really appreciated it. So, in my experience, there's no harm at all in just telling someone you can't afford to keep working for them. Sometimes they'll offer you more money.
A few folks will flip out or come unglued or say rude things. That's the beauty of being a consultant, you really don't have to put up with that if you don't feel like it. You can walk away from people like them and not look back or regret it.
But, almost all of my work has come from word-of-mouth, so I try to keep clients pretty happy as much as possible.
> I got sweet-talked... trying to sweet talk...
It sounds like you're just struggling with negotiating, like pretty much everyone does when they're just starting out. He begs or pleads or convinces you that it won't be that hard and you wear down and say OK and then try to do it and resent it. So now you want to run away because you don't feel like you can handle negotiating with him.
Try it anyway, and keep trying. Even if you end up walking away from the project, you'll learn a lot by trying to renegotiate. If you have to, write a number down on a piece of paper before talking to him. Don't start higher with the hopes of negotiating down to it, don't accept anything less than that, just stick to it. Write "don't do it you idiot" on the back of the paper. Every time you start to consider taking a lower number, flip the paper over.
"Hi, we really need to talk about how your project has been progressing. I've put a lot of effort in to it, with a lot more hours than we originally discussed. I want to see it finished to your satisfaction, but I'm also not making enough money right now to cover my expenses. I have to start looking for more income immediately.
I'll finish a few more items [..., ..., ...], but if you want [..., ..., ...] done, I have to bill you at a normal professional rate. Since we've worked so hard together on this, I'll charge a little less than my next client. Let's say $400/day. I'll do my best to give you an estimate for new features."
And negotiate from there. Put the ball back in his court; let it be his decision to either pay you or discontinue the project.
Most folks understand that they can get any 2 of cheap, fast, or good; if he can't afford the budget for the project, he'll either drop it or negotiate with you and you can offer to wind down the project at a rate that you're happier with, spending far less time on it. Or, he'll come up with the money; I've had a few clients suddenly show up with a nice check once I say, "I can't keep working on this for you at your original budget."
I started doing the "straightforward & honest" thing with clients a little over a year ago. I dropped all pretenses about money and how great business is (it's not bad, but it could be better). I thought everyone would stop working with me. What happened instead is almost everyone really appreciated it. So, in my experience, there's no harm at all in just telling someone you can't afford to keep working for them. Sometimes they'll offer you more money.
A few folks will flip out or come unglued or say rude things. That's the beauty of being a consultant, you really don't have to put up with that if you don't feel like it. You can walk away from people like them and not look back or regret it.
But, almost all of my work has come from word-of-mouth, so I try to keep clients pretty happy as much as possible.
> I got sweet-talked... trying to sweet talk...
It sounds like you're just struggling with negotiating, like pretty much everyone does when they're just starting out. He begs or pleads or convinces you that it won't be that hard and you wear down and say OK and then try to do it and resent it. So now you want to run away because you don't feel like you can handle negotiating with him.
Try it anyway, and keep trying. Even if you end up walking away from the project, you'll learn a lot by trying to renegotiate. If you have to, write a number down on a piece of paper before talking to him. Don't start higher with the hopes of negotiating down to it, don't accept anything less than that, just stick to it. Write "don't do it you idiot" on the back of the paper. Every time you start to consider taking a lower number, flip the paper over.
It's my first time consulting and things have gone about as bad as could be. What was initially estimated to be 150 hours for $6000 (well below my market rate to begin with) currently stands at 350 hours and $6700 in the bank so far. I got sweet-talked into extending twice. This time I told the client I am done and will not continue beyond finishing one last item and writing the docs for business continuity. He's trying to sweet talk into doing several of the important and urgent items, which of course are going to play out like everything else so far and take much longer than he thinks.
So, if for full-time employment two weeks notice is customary, what is it for consulting?
I'd also like to hear from other folks just how bad things went for them to justify quitting suddenly? How did the client take it?