This is the second in a new series called the Consultants' Forum. This series addresses the most important issues facing consultants, particularly in consideration of the current economic climate. The November forum addressed The Contract and the January forum will address Marketing.
Nina Yablok: The best way to get paid is to prepare in advance by ensuring that you and your client have shared expectations. Payment problems often result when the client doesn't have a realistic idea about what they are buying and when they are getting it. Expectations go beyond the scope of the project itself and also include other "what if" scenarios. What if we come to a disagreement? What if your payments are late? What if you neither accept or reject the work? What if I have to go to an attorney? Before the project starts, you can help yourself get paid by crafting a clear and "collections-friendly" contract.
This part of December's program will pick up on themes from the November The Contract program, but will go into more detail on parts of the contract that are specifically addressed to collections, or what lawyers like to call remedies.
Jonathan J. Sweet: If the contract language you have used is not sufficient to recover money you are owed, you may be compelled to take more serious steps. These steps may include filing a lawsuit in either Superior Court or Small Claims Court. A suit in Superior Court usually requires that you use an attorney.
Your contract may have an arbitration or mediation clause, and these clauses may allow you to avoid paying legal fees to an attorney to help you recover your money. Mediation uses a retired judge, attorney or industry expert to help you and the other party negotiate a compromise solution. Arbitration may use a professional arbitrator or retired judge who hears evidence and makes an award, which can then be converted to judgment.
Critical factors to be considered in determining how you will resolve your payment problem include (1) whether you plan or wish to do business with this party again in the future, and (2) whether the non-paying party has the money or assets to pay you. A judge or arbitration does not give you a check for what you are owed, only a piece of paper saying you are legally entitled to be paid. Separating your anger at not getting paid from being rational about how your approach this problem will help you resolve it more effectively, given your particular facts and circumstances.
Ms. Yablok has written and lectured extensively in the areas of independent contractor relationships and business start-ups. In addition to many magazine articles, she is the author of Minimizing Independent Contractor Disputes Action Guide, published by University of California, Continuing Education of the Bar. Nina enjoys working with high-tech companies, and she shares her thoughts on business, law and other topics on her BizLaw Blog.
Jonathan J. Sweet works for clients on litigation and transactional matters. He is the author of two books on the subjects of contracts and avoiding litigation, and he has taught law courses at Lincoln Law School of San Jose, San Jose State Univ. and the Univ. of San Francisco (USF).
Jonathan has created a Risk Management Video that addresses some important contractual issues. He is available to act as an arbitrator or mediator to help resolve disputes. He also serves as an expert witness and consultant in litigation. Jonathan received his BA from UC Berkeley in 1978 and his JD from USF in 1985. He lectures regularly for Lorman Education Services on transactional and litigation matters for clients.
Brian A. Berg is an IEEE-CNSV Board Director, and a consultant specializing in storage system design and Intellectual Property. He will be moderating this meeting, as well as sharing his perspective and coordinating stories from fellow CNSV members.