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I just recently started freelancing (software development) for a new client; they're a start-up and my old boss is the CTO.

They gave me a 3 month freelancing contract which doesn't specify how many hours but rather that we loosely agree to work together. They're my only client on the moment and they need me. Since they just started out and because he is an old co-worker come friend I have lowered my rate considerably. That was probably a mistake right there.

I gave a talk at a conference and afterwards someone from a big company emailed me and asked if I wanted to freelance for them for a very lucrative rate doing a very visible project. It's something that, in my country, millions of people would be using quite regularly.

The thing is they want me to start very soon and I still have about 2 month left on my current contract. I'm not very worried about the legal aspects of leaving because I am not an employee and suing would not help them in any way other than cost them time and money.

Besides the fact that I hate being unreliable, I know that for a freelancer reputation is quite important so I don't want to flake out.

On the other hand securing a great client like this won't come around every day.

Is it unprofessional to leave a contract before the project ended for better paid project? How should I approach terminating the contract if I do decide to do this?

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Possible legal consequences (i.e. suing) aside, breaking a contract for this reason is very unprofessional and could harm your career. –  Tim S. Apr 24 at 14:17
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As your old boss and friend, he should be happy to see you grow beyond having only one client. That should spill over into your professional relationship, in that he'll be positive about schedule adjustments that allow you to do both, obviously with priority to the higher-paying contract. –  Ben Voigt Apr 24 at 19:14
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12 hours, 1138 views... Good job! –  Canadian Luke Apr 24 at 20:09
    
I believe/hope you are in a good position: you work for a friend (who now owes you one since you offered an attractive rate). Talk to him and find a plan to ensure his needs will be satisfied. If you talk honestly to a friend and work for not let him alone because you have a very unique opportunity, why would he object? –  brandizzi Apr 25 at 6:45

9 Answers 9

Is it unprofessional - Yes. Should you skip a lucrative opportunity - probably not.

Now, these two things are in collision, as they always are. The only thing you can do here is work the lucrative job in regular work hours, and do the bargain job after that (probably late afternoon and night). So paid jobs are done in the prime time, and low-paid jobs after.

Before you do that, you should explain to your friend that you gave them an extra low price cause you are friends, and that you got a lucrative opportunity (2, 3 times more money) and that you have to prioritize that.

They should understand this, though they will not be glad. They may offer you the same money to keep you focused on the job, though they probably won't.

But plan your time carefully, because you MUST NOT leave project unfinished. That's the most unprofessional thing to do and you must not get used to it. The only case you can leave the project if work conditions are horrible (interpersonal relations), but never because at some point you gave them your work for small money.

PS. I am in the same situation. Gave the client 2.5 lower hourly rate cause I was out of work. After that I got 2 lucrative projects, and now I am doing his project a couple of hours at night. I explained to him about this, and he did not complain.

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I'd like to touch on the lower rate point. "Mates rates" as I've heard them called are invariably a mistake. If a real job needs doing then the client needs to be prepared to offer the going rate, or something close to it. Clearly if you are not working you might want to offer a lower rate, but then the same is true of any job you're offered when you are out of work. –  Phil Apr 24 at 14:11
    
I agree Phil. Any rate below your minimum rate is a bad thing. you simply cannot be happy with it cause you will not cover your costs and they friend has a feeling like he's paying you. I'd rather work for free. So I say "if you have to give buddy rate, then go immediately with your minimum hourly rate". You will be happy cause your will not be in loss and you will help friend. –  Peter MV Apr 24 at 17:28
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I hesitate at the statement "yes its unprofessional." If I have a mortgage, student loan debt, and mouths to feed at home... the professional thing to do is provide for those needs... the needs of any business should never come before your family. Now, if we're talking about just purely an "I want more money just because..." Then yeah... that's unprofessional. –  avgvstvs Apr 24 at 22:22
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@avgvstvs Being professional and fair to clients is the best way to pay off all those at earliest as possible. Bad reputation travels faster than anything. From my reply above, we can see how you can preserve your reputation and yet not work for no money. –  Peter MV Apr 25 at 6:32
    
It's too late now, but the lower rate can be made up for from a startup by asking for part compensation in stock (not options). You have to ask for enough, though. If they say the last round of funding made each worth 1 "unit" and you normally charge X units an hour, but have reduced that to X/2 units, you could ask for an additional 2X or 3X units in stock (higher paper value, because it starts with basically 0 ability to pay the mortgage). It may become completely worthless, but at least there's potential for not just purely losing money versus other, higher cash paying jobs. –  lilbyrdie Apr 26 at 15:52

I think it would be reasonable, since you're only on a three month contract with no specified goals besides "do some work" (my favorite kind of contractual agreement btw), to give them a heads up that you're going to be decreasing your involvement.

Here's where you could offer some creative solutions. Since the hours that you spend on things is not scalable, you could backfill yourself on your low billable friend-rate gig with a subcontractor and take a slice to support them in their ramp up.

I've been more than happy to sub when I get my end and understand the deal. I imagine most professionals are.

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If you know for a fact that, in the long run, choosing the new client will compensate for dropping your to-date employer (client), then choose the arising opportunity. We need to remember that the most important thing is your well-being (it is in your duty to defend your best interests).

Maybe, the most important aspect is to measure, how much good the new opportunity brings compared to what you have right now.

Don't be shy or afraid about change. There are many situations when you will be unable to do good for everyone. Some sacrifices must be considered (for your sake and the good of others).

This being said, consider renegotiating your present contract by lowering the number of weekly hours or by getting a higher hourly rate. If this isn't a good perspective, just terminate the contract (if as you say, there is no concern about serious liability.)

What about ethics?

Well, this is a complicated matter. Of course, sticking with your past decisions is part of your responsibilities and determines your reputation. But, as you know, the law makes you liable to your clients/suppliers and requires you to act in the best interests of the company (in this case yourself) - so, which one do you choose first?

If the new contract will bring you enough resources to cover the (eventual) costs in case you are made liable, if these resources will help you secure the future of your freelancing activity, and if your potentially "unethical" decision to give up on this client will be soon forgotten and you know it is not who you are, then look forward by choosing the opportunity at hand (this new promising project).

A quick thought (maybe unrelated to the topic)

I think is wrong (bad practice) to accept projects for a lower than normal rate just because you are out of work. I also think that it is ethical to stick with such a decision once it has been made. What should happen if you terminate a contract in exchange for some other promising offer and as soon you do so another more promising opportunity comes to your attention?

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If your current client decided that you were not satisfactory, he would fire you. Thanks, bye. Why should you feel any greater sense of obligation to him?

  1. Accept the new job. And make sure you really have it before you say anything to the existing client.

  2. Once the new bird is in the hand, explain the situation to the old client, and see if there is anything you can do for him.

If you want to see this in ethical terms, how about this; the fact that the new client will pay more means that the economy is telling you that you would be more productive at the new task. The only good reason for ignoring this information is if you disagree. And remember that the economy is a whole lot smarter than you will ever be.

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+1 for information and economy; well said. –  Max Vernon Apr 25 at 4:17
    
Just to chip in, I was also going to mention viewing this from the clients point of view, what if their budget dried up would they still offer you employment until the end of the project? Of course not. I contract (in the UK) and I am part of a workforce who are available at short notice (a week usually). I agree in a perfect world the contract would always end amicably at the right time for both the employer and contractor, but how often does that happen. I would have no qualms about taking a new role, especially given that you are offering a lower rate. That is the nature of contracting. –  lharby Apr 25 at 11:46

Telling your new employer that you are not leaving until things are settled at your old job shows professional behaviour and, not recommended, but maybe you can offer to work on both jobs for a while with reduced hours? I did that once and all parties are still happy, but it was a lot of work, so only do it if you are really up for it.

Don't burn bridges with people you consider your friends, one day you might be working together again.

Also it might be a trick from the new employer to see how desperate you are for the job/money.

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If you are being paid hourly, then the company that you're working for has no recourse because the contract is divisible and does not specify a number of hours. If you were doing fixed-price work, it'd be a different case. I'm not an attorney, but I'm pretty sure that this is the case.

The second part is, as shown in the other comments, an ethics concern. Or actually, a few:

  • I don't know who set the price you're getting. If it was your boss, it was unethical for him to offer much-lower-than-market prices. On the other hand, if it were you, it was unethical for you to accept three months' work on the cheap if you were really waiting to land something else.
  • If you stay on the existing gig, and don't level with the CTO as to your real needs, the project (and your morale) will suffer.
  • If you jump ship, it may bite you in the ^@#!&@^ someday.

It's a hard spot to be in. Be careful of doing anything too pre-emptively (meaning before company #2 has made a solid offer). "Old boss" may be willing to work with you, but you can't stretch him too far because he's got a business to run.

Best of luck.

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Taking this action sends a message that you are always willing to leave when something better comes along. You may not mind sending this message to your friend, given the circumstances. Do you really want to send this message to the new employer? They may be happy that you are coming on board, but they already know you are willing to jump ship at any point you see something better.

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For me it's important to remember that you are a freelance, not a slave. So I would sincerely talk to them and try to find a solution that would benefit both. Because you say that you have a contract were "we loosely agree to work together", try to work the flexibility of that agreement instead of seeing from the point of view of breaking it completely.

When working with clients as a freelancer it's always a push&pull and a lot of negotiation, I would encourage you to negotiate with a friendly and honest approach showing that you are willing to help but do not want to miss new good opportunities either.

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The last week we had a meeting at our office. I heard an interesting thing said by the CEO there: "Business is possible only after three parts are put together, those parts are: Work, Investment, Risk". I have no idea where this sentence was taken from, but it makes sense. You could have an investment, but with no work and no risk there will be no business... As well, You could work, but with no investment and no risk there will be no business. And so on.

Looking at Your own situation, I see that You come to the place where You have to take a risk (will make it or not) and work more (for two projects now) and treat both projects as the investment (into Your competence). You have to hold on if You want Your competence to prosper.

You got the problem which is an opportunity for You to grow. Which is good!

One more thing to mention. I am in the office where working with freelancers is quite common thing to do. And there are the interesting part of it - some freelancers has their own assistants they work with. I never knew that is usual practice to do, but it is. However, not so many people could offer assistant for them selves, because it means You have to find a job for the assistant as well as for yourself. It is Your problem how You will legalize the assistant, but there are some ways: offer to work with him as freelancer with freelancer, rent a coder from the company You trust (some companies rent coders), create a small company and hire that assistant. There are many ways to go.

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