How to fire or salvage a problem client?

Question

I have a client that I'm tired dealing with.

Although we have a written contract, they often submit change requests that are not covered by the terms of the contract. When I remind about the fixed scope and placing those change requests on future phases, they argue like "oh, our attorney is not available, let's write it down later" (presumably, when the work is supposed to be done) or "don't you trust us?" and stuff like that.

Also, they have delayed payments several times so far.

I'm at the point to take a decision of firing the client. OTOH, I understand that it's hard to find good clients and I'm not willing to throw away an existing one. So my goal is to answer for myself if my reasons are really solid to fire the client (or to salvage the relationship). Also, my primary goal is to save my face and reputation.

I can't afford an attorney to struggle for this. Instead, I can afford firing the client and spend more time finding another one.

My question is, what are the key steps the freelancer should take in order to:

• Decide for myself whether I should attempt to salvage the client?
• As soon as the decision (either positive or negative) is made, how to do it smoothly?

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Looking at the answers, I think I have to make an update:

• They are not bad people, generally. If I noticed they are deliberately doing something wrong, I would push them away without any questions;
• While I'm confident that the client is violating the terms, it well may be that I'm wrong by overestimating the danger; as I said, I don't feel of being cheated, I'm just tired of issues here and there;
• By asking here, my goal is to figure out a simple rule of thumb on how to behave in such situations, without taking into deeper details so that the answers would be helpful for further visitors;
• Losing trust to the client is an important issue, but being able to learn for myself and solve the problem is also critical for me.

Answer 1

Since you're asking the question, I think the answer in your case is fairly obvious. If they had not already crossed the line, you would not be asking this question. They have breached your contract and broken your trust to a point that you doubt the future of your relationship with them. That doubt and uncertainty can not be repaired except by them and you can not coerce them into repairing it. Threatening to drop them might get them to shape up for a little while, but I doubt it would be permanent. You also need to be consistent in enforcing the terms of the contract and in properly addressing breaches of it.

Another consideration is that forgiving behavior can lead to a client who doesn't clearly understand the consequences. Since you've let small changes slide in the past, they may not realize that their contract is in jeopardy by requesting another small change. In other words, they might believe that you won't enforce the contract since you haven't yet enforced it - you've set a precedent.

Also, in many jurisdictions a verbal contract is binding. So even if your paper contract and Scope of Work say one thing, if they verbally change it and you agree (or if you disagree or say nothing but still perform the work) it is legally the same as renegotiating your contract.

These last two paragraphs probably don't change whether or not you should drop them as a client, but they may affect how you drop them. I am personally a little relaxed about the boundaries of a contract, but I've had people walk all over me because I didn't set expectations early on.

Answer 2

When there are breaches of contract, especially to the scope of work or payments, it's going to usually depend on the situation. For a late payment, I would give them a little extra time the first time it's missed, and gently remind them with a quick phone call. If they say the cheque is in the mail, I'll take their word for it, and try for another week. If I still don't get it, I put the work on hold and inform them of that. They will get told that I will start working again once the payment has made it into my hot little hands.

For scope creeping, the toughest thing about this is when they are actually changing it, or just interpreting what was agreed upon early on when they signed the SoW with you. For me in my IT field, almost anything can pop up unexpectedly, whether it be hackers, bad hardware, bad software, another tech was in there, an employee was in there, etc. For my work, I dictate that "in a perfect world", this job would take xx hours to complete, but will bill for an extra 50%; if it takes less time, they get credit for the next job. If it takes more then 50% more then what was agreed, then there are underlying issues that need to be addressed before continuing.

If you decide to fire a client, you are right that you need to look out for yourself. Your reputation can be riding on it if the client has a big mouth. When you confront the client, DO NOT yell at them, curse, swear, smash or be angry towards them. This also includes passive-aggressive behaviour: do not belittle them or talk down to them. You must remain calm, and explain why. Have everything written out, including details of when you spoke with the client, and what was discussed. Nothing hurts more then being told that information I am giving is inaccurate.

If you're in a small town, word will get out. I live in a town of 80,000, and within 2 days of me leaving my day job, almost every other IT tech in town heard I left, and either congratulated me, or asked me to go out for drinks with them to celebrate. In my case, I was well respected. When dealing with clients though, it will probably not be so friendly, especially if you end the relationship. Just like High School, there will be gossip. You cannot let the "abuse" continue though from your client until they fire you, otherwise you'll be the one who looks bad in this situation.

Answer 3

Here's a small step-by-step procedure I found useful, but I admit it's far from being exhaustive, so other ideas are welcome.

1. Consider possible financial outcomes: not having a lawyer, it may lead myself to be the formal requestor of contract cancellation, hence I may be viable for cancellation fees;
2. Consider all possible reputation outcomes, e.g. if two of your clients know each other;
3. Try to salvage the client by speaking with them in person. Often it happens that some people are really horrible when communicating by email, but they appear nice guys while having a cup of coffee and talking about what makes me unhappy working with them; If not possible, try at least a phone call;
4. Be very specific about what contract terms are violated;
5. Not focus attention on the guilt of violation, but instead suggest acceptable ways to mitigate each particular problem;
6. Ask for their opinion about how they see the problems can be solved;
7. Make my decision at the time of discussion, not after it;
8. If decided to fire them, re-check the complete list of final actions (completing a phase, payments, etc);
9. Decide on who will be informed on results of our conversation;
10. Write a detailed letter after the conversation; copy the letter to people in the list agreed in step above;
11. If decided to continue, adjust the contract accordingly;

Answer 4

I would include in my contract a statement to the effect that once a price and a statement of work are agreed on, any changes need to be renegotiated. It sounds like it is too late for that in your situation, but you can point out that the price you agreed to is for the work you agreed to, and that yes, you can accept the change but that naturally, "it will increase the price. Shall we stop work now and negotiate the price new statement of work?" That ought to at least bring the issue into sharp focus.