Troublesome eLearning Contractor Case Study
Recently I retained the services of a freelance Flash eLearning developer. After checking out two references and receiving a sample of work, I engaged this person on a short-term scope of work (SOW). During our conversations I mentioned that I pay my contractors quickly because that is the best way to retain good people. After working with this eLearning contractor for a few weeks, it became apparent that he simply was not going to work out. Despite the adequate work sample and glowing references, he simply was too slow and the quality of his work was sub-par. This eLearning contractor submitted a total of 3 invoices – the first two of which were processed within a week upon receiving them. The final payment took slightly longer to process (two weeks). Knowing that that he was not going to receive additional work and frustrated that he was not yet paid for his final invoice, he performed the following actions:
- Downloaded all of the project files (including those for projects he was not assigned
- Threatened in email to call the client (with which he had no previous direct contact) and place a “lien” on the project if he was not paid within 4 business days.
This unusual approach to collections was most unexpected, especially since the facts were…
- His invoice was barely 2 weeks old
- The invoice did not include a due date
- The invoice did not include an amount (just hours worked)
- The invoice did not include late payment penalty terms
- The invoice did not include an invoice number
- Our contract included an arbitration clause stating that disagreements must go through arbitration
I have worked with dozens of contractors over the years. I have never heard of a eLearning contractor threatening extreme measures to require payment on an invoice like the above. Clearly this person lacked even the most basic business skills like invoice writing, accounts receivable collections, basic professional decency, etc. Looking back, there were warning signs that this contractor lacked professionalism at best, and potentially unreasonable and unstable at worst. Following are some valuable lessons that I learned and share with you now so that you may avoid the problems I encountered.
- Checking References: Be sure to receive references from people who worked with the contractor in the same capacity as you wish to. For example, be sure that you do not receive references simply from work colleagues who may be biased for this person or actually hoping to push him or her out of the company.
- Confirm Professional and Experienced Freelancer: Ensure that the contractor has experience functioning as such. Confirm that s/he has a Federal EIN and operates at a minimum under an LLC, and require references from other independent companies that have retained this person.
- Clearly Define Payment Terms: Avoid making statements like, “we pay quickly”. Instead, state that all invoices will be paid according to NET 30 or whatever your terms may be.
- Control Access to Files: Only allow contractors access to those files that they require to do their work. Do not allow unfettered access to project files.
- Don’t ignore warning signs: If you receive an invoice that lacks even the most basic elements (total amount due, due date, invoice number, etc.), that is a sign that this person may not have the fundamental business skills necessary to operate a healthy freelance operation. This contractor also had sent email from another employer’s email domain. While I immediately advised him that this was not appropriate, the fact that this had to be pointed out to him was another warning sign. Listen to your gut instincts and avoid problems before they start.
- Don’t debate or argue with an unstable person: If a contractor is not going to work out for any reason, the best course of action is to pay out the scope of work as quickly as possible, limit access to all FTP and other electronic resources, and do not engage in debate around the merit (or lack there of) of any threats the vendor may make. I tried to explain to this person that he had no right to contact the client. I clearly laid out the facts and described why his course of action was inappropriate and unfounded. He was not interested in facts and did not back down from his threat to call the client if his terms were not satisfied. You know what they say, “Don’t engage in a battle of wits with an unarmed man.”
- Involve legal council immediately when threatened: Be sure to have your legal council size up any threat you may receive and type up a response indicating your legal position and the action you will take should the former contractor attempt to damage your relationship with your client or otherwise materially harm your organization.
Hopefully the tips above will help you avoid the problem I experienced. Giving this eLearning contractor the benefit of the doubt, I don’t believe he intended to cause so much trouble. He just felt he deserved to be paid immediately upon submitting his final invoice and was worried needlessly that he may not receive his final payment. Still – his fears were unfounded and his actions were bizarre and indefensible. Rather than protract the issue, I ensured him that the payment was indeed processed and cautioned him against contacting the primary customer. I am grateful for the education I have received here – although it was not an enjoyable experience 🙂