IntroductionWelcome to the course| 00:00 | (music playing)
| | 00:04 | Hi! I am Terry Lee Stone.
| | 00:06 | I have spent most of my career focused
on the business side of creativity,
| | 00:10 | specifically in graphic design.
| | 00:11 | I am here to show you how to write
a contract for your design services.
| | 00:15 | I will touch on pricing and how to navigate
the complexities of client relationships.
| | 00:21 | Designer-Client Agreements are one of the
most important tools you can develop
| | 00:25 | in order to ensure great design and financial success.
| | 00:29 | This is both a business and creative activity.
| | 00:32 | Lots of creative professionals are intimidated by legal stuff.
| | 00:36 | There may even be a chance that you do
business without a contract, maybe you
| | 00:40 | think contracts are too difficult
or too much trouble to create.
| | 00:44 | I don't think they have to hard.
| | 00:45 | Contracts are created to protect your interest
and allow you to walk through the project with your client.
| | 00:52 | As a legal document they can be useful,
but as a communication tool it may well be invaluable.
| | 00:57 | So let's get started.
| | Collapse this transcript |
| Course disclaimer| 00:01 | Okay, so here is the disclaimer.
| | 00:02 | I am a designer, not a lawyer.
| | 00:05 | The information I present in this course
is not a substitute for the
| | 00:08 | personalized advice you will get from your attorney,
insurance agent or accountant.
| | 00:14 | If you have questions regarding legal,
financial or risk management issues,
| | 00:19 | you should seek the services of an appropriate professional.
| | 00:22 | Bring the ideas and samples you take away
from this course as a basis for
| | 00:26 | discussion with your own advisors.
| | Collapse this transcript |
| About the exercise files| 00:00 | I have included a number of
great resources for this course;
| | 00:04 | these documents can be found on the
course details page in the Exercise Files tab,
| | 00:08 | under the name Resource Guide.
| | 00:11 | They are available for all lynda.com subscribers.
| | 00:14 | Or if you are watching this tutorial on a DVD,
the files have been included there.
| | 00:18 | The resource files and exercises you
will find for this course cover some
| | 00:23 | real world opportunities and problems, they
are provided to help deepen your understanding.
| | 00:28 | You will find samples of contracts.
| | 00:31 | Please feel free to use them as templates
in developing your own agreements,
| | 00:37 | that's what they are there for.
| | 00:38 | It is okay to copy paste anything
you find in the Resource Guide files.
| | 00:43 | As part of this course, I am also going to ask
you to download a free item provided my AIGA;
| | 00:48 | the oldest, largest and most respected
design organization in the US.
| | 00:53 | This is an amazing free resource, I will ask you to
download the file, so we can discuss and learn from it.
| | Collapse this transcript |
|
|
1. Contract BasicsIntroduction to contracts| 00:00 | When we are talking about a Designer-Client
Agreement, we are really talking about a contract.
| | 00:04 | I will say it right up front, contracts are your friend.
| | 00:08 | Let's start at the beginning, you'll want
to title your contract with one of these names,
| | 00:12 | call it Agreement, Deal Memo or Estimate
or you can call it Proposal,
| | 00:17 | which seems to be the most commonly
accepted name for this document.
| | 00:21 | Others simply call this document a Contract.
| | 00:24 | In essence, the agreement that you
will submit outlining your services and
| | 00:28 | compensation on a particular project
becomes a contract between you and your
| | 00:32 | client once it is accepted and signed.
| | 00:34 | There is a school of thought among
some designers to first submit a proposal
| | 00:39 | with project information and costs only
and then later hit the client up with a
| | 00:43 | contract containing the legal copy.
| | 00:45 | I don't subscribe to that.
| | 00:47 | I like one document with everything, all in one place,
it's less paperwork and clear to clients.
| | 00:53 | Creating a formal written contract between you
and your clients has a variety of benefits.
| | 00:58 | Designer-Client Agreements are legal and binding
document. If signed, they will hold up in court.
| | 01:03 | They are an important planning activity,
because creating them makes you think
| | 01:07 | through what you will be doing
and how you will be doing it.
| | 01:10 | Agreements are great communication tool,
because both you and the client can
| | 01:14 | talk through the deliverables and the
creative process, and agreements also work
| | 01:18 | as a sales and marketing opportunity,
because you can include relevant samples
| | 01:22 | of other work to show them your expertise.
| | 01:25 | All of which sets you up as a professional.
| | 01:28 | This will elicit more trust from your client.
The more buttoned up you are in the beginning,
| | 01:32 | the more likely you'll be to have a
smooth relationship with your client
| | 01:35 | and that will ultimately result in better creative work.
| | 01:38 | Designer-Client Agreements can look
different from designer to designer.
| | 01:43 | You will find some samples for your review
included in the Resource Guide for this course.
| | 01:48 | Generally speaking, these agreements are branded to the
designer, which means it matches your identity system.
| | 01:53 | They are on a design carrier sheet
that's similar to your letterhead,
| | 01:57 | most often they are formatted 8.5" x 11".
| | 01:59 | They are clean and professional,
no tricky or unreadable typography.
| | 02:04 | They contain simple or extensive contents
depending on the designer's choice and
| | 02:08 | typically are provided to clients in PDF form for approval.
| | 02:12 | Of course you can be a rebel, you
don't have to follow these formatting
| | 02:16 | suggestions to the letter, just make
sure that your agreements are designed
| | 02:19 | well and will work in both print and PDF formats,
because you'll likely use both delivery methods.
| | Collapse this transcript |
| Anatomy of a contract: Part one| 00:00 | Contracts, like creative businesses, can
vary depending on personal style and the
| | 00:05 | nature of the work, but generally speaking,
I will present a tried and true structure
| | 00:09 | that you may want to adopt or adapt for your practice.
| | 00:14 | There are five elements or components in a
Designer-Client Agreements: General Info,
| | 00:20 | Descriptions, Compensation, Fine Print and Signatures.
Each of these are pretty straightforward;
| | 00:27 | I am going to break them down in detail in upcoming movies.
| | 00:30 | I would like to note here that what I refer to
as Part 1 of your agreement, which is General Information,
| | 00:37 | Descriptions and Compensation will change for
each agreement that you write.
| | 00:42 | While Part 2, which is the Terms and Conditions and
a line for the client's Signature,
| | 00:45 | will pretty much remain constant from project to project.
| | 00:49 | First, you are going to need to design a
branded contract template document
| | 00:54 | that is similar to your letterhead.
| | 00:56 | It should have your business's name,
address, phone number and email on it.
| | 01:00 | Label the document with the word Proposal
or Agreement or whichever name you've decided to use.
| | 01:05 | Make the name bold and obvious,
because it might look a lot like your invoice.
| | 01:11 | Each time you create a Designer-Client Agreement;
| | 01:14 | you will add the date and address it to your client contact.
| | 01:17 | It is wise to put an actual person's name,
not just the client company name, on
| | 01:22 | the document to make it clear
who you're doing business with.
| | 01:25 | This could be very important in the
case of a dispute or if your client contact
| | 01:29 | person is fired or released during the project.
| | 01:31 | When I say Descriptions, I mean two
kinds of information, the Scope Of Work or SOW,
| | 01:37 | which is what you'll do, that's mandatory.
| | 01:40 | You and the client need to know what work
is included in the agreement and also
| | 01:45 | design process breakdown,
which outlines how you'll do the work.
| | 01:48 | Typically this is detailed in phases.
It's not mandatory, but it's a good idea
| | 01:53 | to include process information, because
it helps the client know what to expect
| | 01:57 | throughout the project.
| | 01:59 | Breaking down the work in two phases
describes what you will do in each.
| | 02:03 | This also helps you track the work
from a project management standpoint.
| | 02:07 | Describing the work in phases makes the
creative process more understandable to clients.
| | 02:12 | It also allows clear demarcations for approvals,
invoices and payments, as well
| | 02:18 | as logical points to end the working relationship
if things turn sour.
| | 02:22 | This idea of phase breakdown is covered
in more detail in Chapter 2 of this course.
| | 02:28 | The Scope Of Work is typically a one paragraph
description of the project.
| | 02:32 | It should be specific enough to ensure that if there are
major changes in the project, you can renegotiate.
| | 02:38 | Also, I recommend that you tell the client
how many rounds of revisions and/or
| | 02:43 | changes or modifications are
included in the Scope Of Work.
| | Collapse this transcript |
| Anatomy of a contract: Part two| 00:00 | There are two categories of numbers that should appear
on every Designer-Client Agreement.
| | 00:05 | First, your design fee, which is the
compensation for your labor, expertise and
| | 00:09 | the value you bring to the project.
| | 00:12 | You can think of that as time.
| | 00:14 | Secondly are the estimated expenses.
| | 00:17 | These are your out-of-pocket costs for items
purchased specifically for this project;
| | 00:21 | you can think of this as materials.
| | 00:24 | All expenses should include a standard markup
or agency commission, typically a
| | 00:29 | 15 to 25% service charge is tacked
onto the actual cost of the item.
| | 00:34 | Why do designers do this?
| | 00:36 | Because purchasing items involves
a certain amount of risk; you are
| | 00:40 | guaranteeing the workmanship, quality
and delivery of the item, plus you're
| | 00:44 | acting as the bank by fronting the
money for the purchase, which is the
| | 00:47 | convenience to the client.
| | 00:49 | Primarily it is because this procedure
is an industry standard in our profession.
| | 00:54 | The Terms and Conditions copy in a
Designer-Client Agreement is set forth in
| | 00:59 | paragraphs called Clauses that describe
in formal legal language the working
| | 01:05 | relationship and obligations that
you and your client will share.
| | 01:09 | Although it may seem like a bunch of
legal gobbledygook, don't neglect to
| | 01:13 | include terms and conditions copy in
your agreements, because it protects you and
| | 01:17 | clarifies important business issues.
| | 01:19 | This is your contract and it's all about
setting up a deal that benefits you.
| | 01:24 | A client's signature is legal proof
that they have approved the Project
| | 01:29 | Description, Compensation and Terms as
you have outlined them in your agreement.
| | 01:34 | Maybe the most important line in your contract
is the one saying, "The signee
| | 01:38 | below acknowledges the above and agrees to abide by it."
| | 01:42 | Followed by a line for the client to sign and date it.
| | 01:46 | Go ahead and type out the individual's name
and the company name, since many signatures are illegible.
| | 01:52 | You may also find some clients will require
that you also sign the document, so
| | 01:56 | do that before you submit it to the client.
| | 01:59 | Digital signatures on a PDF will work,
but in a lawsuit, courts prefer dated
| | 02:04 | signatures that are literally ink on paper.
| | 02:07 | More and more, courts are accepting scans
and email stating approval, however,
| | 02:12 | nothing beats a signed original.
| | 02:15 | That's it! That's a contract!
| | 02:15 | Those five components, no need to be intimidated by them,
but don't rush through them either.
| | 02:21 | A clear well executed contract will save you a lot of hassle,
trust me.
| | Collapse this transcript |
| Reviewing a sample contract| 00:00 | Now that I have shown you the basic
components of a Designer-Client Agreement,
| | 00:04 | check your Resource Guide for three sample contracts
to see how a few designers have made them work.
| | 00:09 | In the first sample you can see the contract format
that I have outlined in the last few movies.
| | 00:14 | It's very simply designed.
| | 00:17 | Here is the General Information.
| | 00:20 | This is what the Project Description and Objectives look like.
| | 00:24 | Next, this designer outlines the Fees and Expenses.
| | 00:29 | Then they do a full breakdown of the
Phases of work followed by the Terms and
| | 00:33 | Conditions, at the very end are the Signatures.
| | 00:37 | Now I know I have suggested that you
breakdown phases before you talk money,
| | 00:41 | but this designer reversed the order and it works just fine.
| | 00:45 | In sample Contract 2, just for contrast,
I've shown you how an attorney creates
| | 00:50 | a Designer-Client Agreement, big difference, right?
| | 00:53 | They start with six pages of Terms
and Conditions and then go to a two page
| | 00:58 | Summary of the Project Information.
| | 01:00 | Essentially, they've reversed the order I suggest.
| | 01:03 | Note that this feels super unfriendly, right?
| | 01:06 | Maybe you're beginning to see why I suggest
starting with the project
| | 01:10 | and then going to the legal boiler plate.
| | 01:12 | In Contract sample 3 the designer
has followed my preferred order;
| | 01:17 | their design is simple, clean and well organized.
| | 01:20 | Note that they've included just a little bit of flair,
but haven't been heavy handed in the design.
| | 01:26 | It's all very complete and orderly,
but clearly from a creative professional.
| | 01:30 | So as you can see, Designer-Client Agreements
don't have to be boring, but they
| | 01:35 | do have to be complete and well designed;
| | 01:38 | that's because this documents are
literally setting the tone for your entire
| | 01:42 | working relationship with the client.
| | Collapse this transcript |
|
|
2. Assessing the ProjectScoping the work: Part one| 00:01 | To estimate any design project, you've got to know
what you'll be doing and how you'll approach the work.
| | 00:06 | Your client usually provides a list of deliverables.
| | 00:09 | Generally speaking, this list is
called the Scope Of Work or SOW;
| | 00:13 | sometimes it's referred to as the Statement Of Work.
| | 00:17 | Clients also typically provide a rough project schedule;
| | 00:21 | together, these two things outline a client's
expectations and allow you to price your services.
| | 00:26 | That's what scoping the work in terms of developing
a Designer-Client Agreement is all about.
| | 00:30 | In scoping the work you're trying to
figure out project parameters, time
| | 00:36 | required, resources needed, complexity
of the work and value to the client.
| | 00:42 | All in order to determine the fees and expenses,
you will set forth in your agreement.
| | 00:47 | Begin with a list of known deliverables,
including the delivery media, as well
| | 00:51 | as a general idea of when the project is due.
| | 00:54 | Decide on how many revisions you think
you'll include in your fee, think about
| | 00:58 | who will be on your team and work
on this project with you, if anyone.
| | 01:03 | From the start you should know what
aspects of the project if any will be
| | 01:06 | subcontracted to others, because you'll
need to get bids from these people and
| | 01:10 | include their costs in your contract.
| | 01:13 | Think through a rough estimate of what
your out-of-pocket expenses will be,
| | 01:17 | as well as what is not included and
may be estimated at a later point.
| | 01:21 | A typical problem many designers have
in scoping the work is that since the
| | 01:25 | agreement is being written at the start of the project
their deliverables list is often preliminary.
| | 01:30 | So clear scope of work upfront may be
elusive, it can feel like a Catch 22, you
| | 01:36 | can't price it until you know what you're doing,
but you can't begin work until you have a deal in place.
| | 01:42 | To meet this challenge I recommend
that you go ahead and state a clear,
| | 01:45 | deliverable and corresponding fee and expense estimate.
| | 01:49 | If it changes later, you'll amend your
agreement to reflect that alteration in
| | 01:53 | scope by issuing a change order.
| | 01:55 | If you don't feel comfortable with taking a stand
and outlining the scope of work upfront,
| | 01:59 | there are still ways to proceed. You can do a two-step
| | 02:04 | Designer-Client Agreement strategy.
| | 02:06 | How this works is to develop agreement number one,
by giving a client an
| | 02:11 | incomplete estimate, only pricing those early phases of work.
| | 02:14 | Then later provide a second agreement
once those early phases are completed,
| | 02:19 | because at that point you'll be able
to determine a clear scope of work
| | 02:22 | for the rest of the project and you can
completely outline all the fees and expenses required.
| | 02:28 | Or alternatively, first provide an agreement
that includes all phases of work as
| | 02:33 | you understand them, but write TBD or To Be Determined
as the fee amount for later phases of work.
| | 02:39 | Then submit the second agreement or change order
for the full, maybe even revised scope of work.
| | 02:45 | At that time include all fees and expenses,
so basically you'll fill in all those TBDs.
| | 02:51 | Like I said, although scoping is tricky
it's essential to pricing, and of v
| | 02:55 | pricing is critical information
in your Designer-Client Agreements.
| | Collapse this transcript |
| Scoping the work: Part two| 00:01 | Practice makes perfect when
it comes to scoping the work.
| | 00:03 | The more you do it, the easier it will be
to think through what is asked for and
| | 00:08 | what might be desirable as well.
| | 00:10 | As you build experience working in a
particular niche, you'll know how to
| | 00:13 | ask clients for information in your briefing
session that directly relates to the scope.
| | 00:18 | Plus, you'll also know what other clients
will pay for the same kind of work.
| | 00:22 | The scoping process is way easier if you
are in the habit of doing timesheets.
| | 00:27 | The advantage of timesheets is that they are an
essential tool used by well-run design firms.
| | 00:33 | Timesheets record how designers spend
their workday, by breaking the day into
| | 00:38 | 15 minute increments, recording the
tasks as they're done, and assigning this
| | 00:43 | time to an open job number.
| | 00:45 | Designers provide important information
that affects the project and the design
| | 00:49 | business' overall health and wealth.
| | 00:52 | I mention them here because timesheets
also provide an excellent reference point
| | 00:56 | when scoping new projects.
| | 00:59 | Many designers find themselves doing
similar work over and over.
| | 01:03 | Why not review actual data from past
projects to inform your pricing?
| | 01:06 | Once you've broken down the scope
of work and have a clear idea of what
| | 01:11 | you'll be doing, you'll need to craft a project
description to include in your agreement.
| | 01:15 | This short paragraph works
as a summary of the project;
| | 01:19 | it also becomes the legal description
of your work for a client.
| | 01:23 | It will contain the project name, so
make sure to use the name the client uses.
| | 01:27 | A brief summary of project objectives,
which is optional, a summary of
| | 01:32 | deliverables, including format, size and media
parameters and the number of revisions included.
| | 01:38 | The summary should be specific enough to
act as a starting point for pricing the
| | 01:43 | project and to begin the initial phases
of design development.
| | 01:47 | The compensation listed in your agreement
is based on that particular description.
| | 01:51 | So think carefully, be as specific and accurate as possible.
| | 01:57 | You may want to say what is not included
in the description as well, although
| | 02:01 | that could turn into a long list;
just state the most obvious, most costly
| | 02:06 | things that are relevant to this project.
| | 02:08 | For example, in the case of a brochure
project you might want to not include
| | 02:12 | photography and scans, but later go
back and change order those things.
| | 02:17 | Scoping can be challenging, but like
I said, it gets easier with practice.
| | Collapse this transcript |
| Breaking down the creative process| 00:00 | I think it's smart to break down the project into phases
and describe what you'll do in each of these.
| | 00:05 | Breaking it down this way helps you
track the work more easily from our project
| | 00:09 | management standpoint, explain the
iterative nature of design to a client and
| | 00:14 | provide benchmarks for presentations and approvals.
| | 00:18 | It also shows logical points to end the
working relationship or clear points in
| | 00:22 | the process to invoice the job.
| | 00:25 | Looking at the typical creative process
in plain language it pretty much goes
| | 00:29 | like this, first listen to a problem,
think about it, come up with ideas,
| | 00:36 | create a visualization, show it to the
client and get their feedback, further
| | 00:42 | develop the idea, sell it and get
final approval, make it or hand it off to
| | 00:49 | others, deliver it or launch it, bill it,
then start the whole process again
| | 00:56 | with another project.
| | 00:58 | The phases I'll be recommending
that you include in your agreement will
| | 01:01 | follow this same logic.
| | 01:02 | You'll need to go ahead and look at the
design process breakdown chart PDF from
| | 01:07 | the resource guide, so you can have
that at hand while I discuss it with you.
| | 01:11 | Designers have a series of repeatable steps
and procedures that make them true professionals.
| | 01:16 | For each project, you basically follow
the same systematic process of work that
| | 01:22 | allows you to consistently produce a good result.
| | 01:25 | Different designers may have different
terms for these steps, but all of them
| | 01:29 | employ something similar.
| | 01:31 | In the design process breakdown chart,
you'll see the systematic project workflow illustrated.
| | 01:37 | This chart gives you an overview of how
a design goes from concept to completion;
| | 01:41 | it's a model that can be modified to suit any design project.
| | 01:45 | Let it serve as an outline of the interactions
between you and your client as work progresses.
| | 01:51 | I try to keep the language as universal as possible.
I recommend that you
| | 01:55 | customize it to match your own practice, but
feel free to use my language as a starting place.
| | 02:01 | Typically, there are nine phases in design;
| | 02:04 | phase 1 is Project Initiation where you'll
establish the basic parameters of the project.
| | 02:10 | In phase 2, Orientation/Research,
you'll clarify objectives, goals and identify opportunities.
| | 02:17 | Phase 3 is Strategy which is about creating
an overall strategy and design approach.
| | 02:22 | In phase 4, Exploration, you'll generate preliminary ideas.
| | 02:26 | In phase 5, Development,
you'll further develop ideas and designs.
| | 02:32 | In phase 6, Refinement, you'll create final
designs and get them approved by the client.
| | 02:38 | In phase 7, you'll do final production.
| | 02:41 | In phase 8, Manufacture/Launch, you'll
complete and use the materials created.
| | 02:46 | And phase 9, Project Completion
is about relationship building.
| | 02:50 | It gives you a sales opportunity with
the client to acquire another project.
| | 02:54 | I'll go into detail about what happens
in each of these phases in the next two movies.
| | Collapse this transcript |
| Early phases of the creative process| 00:00 | If you haven't done it already, please look at
the process breakdown chart from the resources guide.
| | 00:05 | I'll be summarizing what happens in each phase of work.
| | 00:09 | You can take a look at the chart for more specific details.
| | 00:12 | I offer this chart to you as a reference
for describing your work to clients;
| | 00:16 | this is the kind of language that you can use
in your agreements.
| | 00:20 | I call the first phase of work Project Initiation.
| | 00:23 | Some designers don't think of it as a
phase of work, because this is the point
| | 00:26 | at which you're trying to be awarded the project.
| | 00:29 | Figure out what will entail and create
a Designer-Client Agreement.
| | 00:33 | So, the goal of this phase is to establish the basic
parameters of the project and get a signed contract.
| | 00:39 | I don't recommend that this phase appear
in your Designer-Client Agreement,
| | 00:43 | but I do recommend that you track your time
and factor it into the next phase of work.
| | 00:48 | What I refer to as phase 2, the
Orientation/Research phase is what most
| | 00:53 | designers would typically call phase 1.
| | 00:55 | This is the first phase that should appear on your agreement.
| | 00:59 | Designers sometimes refer to this as the discovery phase,
and that's exactly what you'll be doing.
| | 01:04 | The purpose of this phase is to
clarify objectives and goals, identify
| | 01:08 | opportunities, and become aware of
the things that will impact the design.
| | 01:13 | Some clients will provide you with
research, often marketing research,
| | 01:17 | undertaken by the client themselves,
or a consulting company.
| | 01:20 | However, it's always good to do your own
design research tailored to your own needs as well.
| | 01:25 | Phase 3 is the Strategy phase and in it
you'll figure out what you'll be doing
| | 01:31 | to solve the design problem.
| | 01:32 | The goal of this phase is to create an
overall strategy and design approach.
| | 01:36 | You'll be analyzing and synthesizing
the research you've gathered in the previous phase.
| | 01:41 | And from that you'll create a description
of how you develop the design,
| | 01:45 | including functionality criteria,
media delivery method plan, and maybe also
| | 01:51 | wireframes, or pagination maps, and
some kind of verbal summary of your
| | 01:56 | aesthetic considerations.
| | 01:58 | At the end of this phase and all
subsequent ones, you present the work for
| | 02:02 | client input and/or approval.
| | 02:05 | Don't proceed to the next phase until
each is completed and approved by the client.
| | 02:10 | Phase 4 is your Design Exploration phase.
| | 02:13 | The goal of this phase is to generate
preliminary ideas and creative concepts
| | 02:18 | based on your approved design strategy.
| | 02:20 | This ideation can take a variety of forms,
depending on what type of design you practice.
| | 02:25 | For example, it maybe sketches,
roughs, storyboards, mood boards,
| | 02:31 | and/or proof of concept models.
| | 02:33 | In your agreement you want to tell the client
how many ideas you will be presenting.
| | 02:38 | You can always over deliver and show
the client more ideas, but make sure you
| | 02:41 | provide the number that you will be
contractually obligated to present.
| | 02:46 | Typically, you'll create several alternative
concepts that will be narrowed
| | 02:49 | down to only a couple of ideas chosen by the client
to be developed further in subsequent phases.
| | Collapse this transcript |
| Later phases of the creative process| 00:00 | Based on the client's approval of the
preliminary ideas in the previous phase,
| | 00:04 | you will develop those rough concepts
into full-fledged designs.
| | 00:08 | In Phase 5, the goal is to further
develop ideas based on client feedback.
| | 00:12 | You'll present tighter representations
of the design by creating comprehensive
| | 00:16 | layouts or comps, animatics, and/or preliminary prototypes.
| | 00:21 | Any of these show a more finished
looking design for you and the client to
| | 00:25 | review, discuss and hopefully approve as presented.
| | 00:29 | What you're looking to do at the end
of this phase is to get your client to
| | 00:33 | approve one design direction
that will then be refined even more.
| | 00:38 | In Phase 6, the Refinement phase,
the goal at the end is to have a design
| | 00:43 | approved as final by the client.
| | 00:44 | So, this phase is about finessing,
tweaking, and finalizing the creative.
| | 00:49 | The client may ask for testing,
including validation in order to ensure that the
| | 00:54 | target audience reacts to the design as planned.
| | 00:57 | This phase is also a good time to have
any preproduction meetings required, for
| | 01:01 | example, meeting with the printer, or a web programmer.
| | 01:05 | Phase 7, Production is where you take your design
to its final form and/or prepare finished files.
| | 01:11 | Within approved design, you can also
begin implementation of the design across
| | 01:15 | all the required deliverables.
| | 01:17 | This may include print, web, interactive,
motion, environmental and packaging.
| | 01:23 | As you know, production can mean
something slightly different in each area
| | 01:27 | of practice, so in your agreement, go ahead
and define production for this particular project.
| | 01:33 | The goal of Phase 8, which I call
Manufacturing Launch, is to complete the
| | 01:37 | project and have the client use the materials created.
| | 01:40 | Depending on the project and delivery media,
the production materials could be handed off to others.
| | 01:45 | And although other professionals
are then actually doing the work, it's
| | 01:49 | typically up to you to supervise these suppliers.
| | 01:52 | This can included a prepress separator
or a media outlet, like a television
| | 01:56 | network for broadcast, for example.
| | 01:59 | Ongoing maintenance, especially in the
case of web design may be an aspect of
| | 02:03 | the project in this phase, or it may
be covered under separate agreement.
| | 02:07 | Just make sure to state what the case is for this project.
| | 02:11 | Phase 8 will be the last phase of work
defined in your process breakdown in the
| | 02:15 | Designer-Client Agreement.
| | 02:17 | Phase 9 is a Project Completion phase
that bookends Phase 1, which as you'll
| | 02:21 | recall is the Project Initiation phase.
| | 02:25 | The goal of this phase is relationship
building and to provide yourself with the
| | 02:28 | sales opportunity for additional work with the client.
| | 02:31 | I recommend that you do a project
debriefing exit interview with the client
| | 02:35 | to review the creative, the project development
procedures, and any known results of your work.
| | 02:41 | You should also archive the project files
and write up a case study while the
| | 02:46 | project details are fresh in your mind;
| | 02:48 | this is preparation for using the
project as a self promotional tool.
| | 02:52 | Then close out the job, invoice the project,
and start the whole cycle again,
| | 02:57 | hopefully, right away with another project from this client.
| | Collapse this transcript |
| Factors impacting the phases of a project| 00:00 | I like to take a moment to talk about
things that most affect the phases of work
| | 00:05 | diagramed in the design process breakdown chart.
| | 00:07 | First is Communication.
| | 00:09 | Timely effective communication and knowledge
sharing throughout the process is necessary.
| | 00:15 | Incomplete or lax communication will
sabotage design and your relationship with
| | 00:19 | the client, and your team.
| | 00:22 | Scope of work: Massive projects may require
repetition of certain faces while smaller projects
| | 00:28 | with less complexity may actually combine steps.
| | 00:32 | Timing: Compressed schedules, means shortening
phases and skipping details. Luxurious
| | 00:37 | timeframes allow for more
extensive work in each phase.
| | 00:41 | Budget: Less money=less work, large budgets
accommodate more work through more lengthy
| | 00:48 | and involved explorations and procedures.
| | 00:51 | Delivery media: Choice of delivery medium
can mean more or less extensive collaboration with
| | 00:57 | other types of suppliers, and that
might affect the process and the schedule.
| | 01:02 | Good design management of your projects
means doing everything possible to
| | 01:05 | control and support your ability to achieve
favorable outcomes in each phase of development.
| | 01:11 | Then managing to your agreements,
meaning doing what you've outlined, is critical
| | 01:16 | to successfully completing the work on time and on budget.
| | Collapse this transcript |
|
|
3. Financial AspectsTalking money: General tips| 00:01 | Be straightforward about money and how
you charge for your services.
| | 00:04 | Make sure that all the financial aspects of the
project are clear in your contracts,
| | 00:08 | then make sure your invoices match
your Designer-Client Agreements,
| | 00:12 | and any change orders you provide.
| | 00:13 | Financial consistency will facilitate, smooth sailing,
and prompt payment from the client.
| | 00:19 | Make sure to communicate financial information verbally,
as well as in writing your agreement.
| | 00:24 | There are two categories of
money that you need to cover.
| | 00:28 | Fees, which are the designer's compensation
for their labor and expertise.
| | 00:32 | Design fees are typically fixed and are
only revised with the change order
| | 00:36 | due to additional scope of work;
and estimated expenses.
| | 00:40 | These are the out-of-pocket cost for things
purchased specifically for the project.
| | 00:45 | All expenses are subject to the
industry-standard markup of 15 to 25%.
| | 00:50 | Don't be afraid to ask for what you need.
| | 00:53 | If you have issues talking about money,
practice with a friend; describe the
| | 00:57 | project, state your fee and then stop talking.
| | 01:00 | Don't feel the need to fill the void with words,
have confidence.
| | 01:04 | Here some tips for dealing with clients regarding money.
| | 01:08 | State exactly what the price includes,
define your payment terms by telling the
| | 01:12 | client when you expect to be paid.
| | 01:14 | For example, you might say net 30 days, meaning
you require payment one month from the invoice date.
| | 01:21 | Also, will you be invoicing half upfront
and the balance upon completion, or
| | 01:25 | will you bill progress payments
at the completion of each phase.
| | 01:29 | Tell the client, make sure to also state
the number of revisions included and then stick to that.
| | 01:35 | Another money related tip is to keep good records.
| | 01:38 | You need to keep project related expense receipts
in order to pass those costs on to clients.
| | 01:43 | In addition, make sure to integrate the
project schedule with regular cost reviews.
| | 01:48 | If you review these frequently, you can
communicate any problems or issues
| | 01:52 | to the team and the client.
| | 01:54 | Make sure you capture all time, for
example, telephone conversation, travel
| | 01:59 | time, admin, etcetera, get all
required client paperwork and financial
| | 02:04 | information in order upfront.
| | 02:06 | If it's required by the client, get a purchase
order number and/or a vendor ID number.
| | 02:10 | Then put these numbers on all your invoices.
| | 02:14 | Also, introduce yourself to the client
contact person in Accounts Payable.
| | 02:18 | Make sure to have anything related
to money signed by the client.
| | 02:22 | For legal reasons and also to prompt a
detailed conversation about money before
| | 02:26 | the work gets underway, then stay in
communication throughout the process.
| | Collapse this transcript |
| Talking money: Revisions| 00:00 | A big concern for designers of
the whole area of client revisions.
| | 00:04 | Designers dread scope creep, where
the project keeps expanding; either it's
| | 00:09 | revised again and again or new work
is added by the client. Maybe this has
| | 00:13 | happened to you. I call it
the never-ending job syndrome.
| | 00:17 | That's why I'm advising you to state
the number of revisions you're willing to
| | 00:21 | do for the fee in your agreement.
| | 00:23 | It needs to be discussed with clients
at the start that there are a finite
| | 00:27 | amount of changes included in the fee stated.
| | 00:29 | Additional work and or revisions can be
accommodated, but they will be subject
| | 00:33 | to a change order that amends
the agreement, this is only fair.
| | 00:37 | So what is a revision?
| | 00:38 | Is there a difference between minor changes
versus substantial overhauls in the work?
| | 00:43 | Well, that something you'll need to explain
to the client. Add a definition of
| | 00:47 | revisions to your agreement in
the terms and conditions section.
| | 00:52 | See Chapter 5 of this course for
more details on terms and conditions.
| | 00:56 | Negotiating with clients about revisions
is a huge part of managing client
| | 01:00 | expectations regarding money.
| | 01:02 | The best strategy is to be clear
in the Designer-Client Agreement.
| | 01:06 | That way the client understands the
meaning of revision and the numbers of
| | 01:10 | rounds of revisions included, so that
when they start receiving additional
| | 01:14 | charges, they shouldn't be shocked.
| | 01:16 | However, even when it's clearly spelled out,
many designers are unsure how to
| | 01:20 | corral their clients and alert them
that the client has exceeded the planned
| | 01:24 | scope and revision allotment for fear of losing the business.
| | 01:28 | If the client has agreed to the terms
of the Designer-Client Agreement,
| | 01:31 | it's okay to bull them, just let them know
what is happening in a professional manner.
| | 01:36 | By submitting a change order or amendment
your agreement, designers can usually
| | 01:40 | nip in the bud those runaway
clients that make endless revisions.
| | 01:45 | No designer wants a never-ending project,
because in essence, you're working for free.
| | 01:49 | That is why a well-defined scope of work is so crucial.
| | 01:53 | Some designers are crafty about revisions,
they use revisions as a bargaining chip
| | 01:57 | or as a favor, giving client's extra revisions
in order to further develop their relationship with the client.
| | 02:03 | I think you need to be careful about
this, but it can be a powerful activity.
| | 02:07 | Too often designers are afraid to ask
for additional compensation for additional work.
| | 02:12 | This makes it harder for the design industry
o be treated fairly in this
| | 02:15 | aspect of business. Because when you
practice without fair compensation,
| | 02:20 | including receiving additional fees for
additional work, you're not only hurting yourself,
| | 02:24 | but the whole design community.
| | Collapse this transcript |
| Talking money: Other issues| 00:00 | Some designers hesitate to charge for revisions,
because they feel they may have
| | 00:04 | caused those revisions, and it might be true.
| | 00:07 | An evaluation will reveal the cause
of the revision in a design project.
| | 00:11 | If it was poor performance on your part
then you should not charge it back to
| | 00:15 | the client, but I think this is a rare occurrence.
| | 00:18 | Sometimes designers do mess up and
are in default of their own agreement.
| | 00:22 | Sometimes, try as you might,
you just don't nail that creative.
| | 00:25 | If you haven't done it right or maybe
you've made an error, you just need to
| | 00:29 | communicate that to your client.
| | 00:31 | If you're wrong, you need to make it right,
you need to do some revisions and
| | 00:34 | additional work on your own dollar. You shouldn't
pass along any revision costs to the client.
| | 00:39 | Mistakes happen, but they can both
have financial and creative implications.
| | 00:44 | By including so much clarity about money,
process, and your working
| | 00:48 | relationship in a formal agreement, it
helps ensure that many of these tricky
| | 00:52 | things that hang up both designers
and clients are covered, and therefore,
| | 00:56 | become nonissues later on.
| | 00:58 | That's why I say that agreements
are such great communication tools.
| | 01:02 | Some other issues about money that
need to be discussed with the client are
| | 01:05 | focused around setting up and running as a qualified
supplier or vendor to your client's company.
| | 01:12 | So make sure you go over getting your
vendor number if they use them, your
| | 01:16 | client's official billing address, getting
a purchase order if they use those,
| | 01:20 | payment terms, direct deposit of your
invoice payments, if that's what you want
| | 01:25 | and a contact person's name in
the accounts payable department.
| | 01:28 | And hopefully, on only rare occasions you
may find yourself with a client who is in
| | 01:33 | breach of your agreement and is delaying payment.
| | 01:36 | This is a really uncomfortable position
for a designer to be in; you want your money,
| | 01:40 | but you're also trying to maintain
the relationship with your client.
| | 01:44 | Sometimes it's simply disorganization
on the part of the client contact person;
| | 01:48 | typically they haven't submitted or approved
your invoice for payment in the accounting department.
| | 01:52 | Sometimes your client is unhappy though
and is holding back your payment.
| | 01:57 | Either way you need to be proactive and get yourself paid.
| | 02:00 | Your client is contractually obligated
to pay you, so pursue them confidently
| | 02:05 | and in a professional manner.
| | Collapse this transcript |
| Outlining your design fees| 00:00 | Your Designer-Client Agreements need to
clearly outline your design fees.
| | 00:04 | If the work has been broken into phases,
price in phases.
| | 00:08 | However, occasionally you may want to
simply state one total fee, especially for
| | 00:12 | those less expensive projects.
| | 00:14 | If that's the case, add up all the phase fees together
and call it creative process or simply design fee.
| | 00:21 | Sometimes it's wise to include a few range,
rather than a single number, why?
| | 00:25 | Well, if the project has a lot of variables,
for example, lots of components or
| | 00:30 | different usage options, it may be tricky
to know exactly what the scope is.
| | 00:34 | Sometimes with a new client it's an opportunity
to gauge appropriate pricing parameters.
| | 00:39 | So Range, let's you hedge a little bit on the price.
| | 00:42 | Pricing design often comes down to what
you think the market will bear, versus
| | 00:46 | how much time it will take you to do it
all factored together with your perception
| | 00:49 | of the project's value to your client.
| | 00:52 | Regardless of your fee structure, put a price to the work.
| | 00:56 | You should include a note stating that
changes to the work described beyond what
| | 01:00 | is outlined will be considered
additional services and billed as such.
| | 01:04 | State the hourly rate these changes
will be billed at, and note that a change
| | 01:08 | order or amendment to this agreement
outlining the additional work and cost will
| | 01:12 | be provided to the client for approval
before any additional work begins.
| | 01:16 | Using change orders helps avoid surprises
at the end of the project, because the
| | 01:21 | client is alerted to the fact that the design fee is escalating.
| | 01:25 | But change orders also often keep
revisions from getting out of hand.
| | 01:28 | Once a client realizes that changes or
indecision leading to more and more work
| | 01:33 | is costing them money, they usually get
back on track and let you complete the
| | 01:37 | work as outlined. Plus, it's really uncomfortable
and potentially damaging to
| | 01:41 | your working relationship to argue
over invoices; particularly later once
| | 01:46 | everyone has forgotten the details about these revisions.
| | 01:49 | By the way, you may choose to not bill for the
additional services under some circumstances.
| | 01:55 | For example, something very subjective
caused a revision, like the client hated
| | 01:59 | the colors you suggested and asked for
another selection, or maybe you just want
| | 02:04 | to be extra accommodating.
| | 02:05 | But talking about the possibility of
a change order upfront states your
| | 02:09 | intention and ability to do so.
| | 02:11 | It's a great protection against potential future problems.
| | 02:15 | Remember, that your design fees will be an
educated guess, but you'll need to stick to them.
| | 02:20 | If you're not clairvoyant, at the
start of projects you can't predict all
| | 02:24 | details and curves you maybe thrown,
as the project progresses.
| | 02:28 | Real-world circumstances sometimes turn the
best laid plans and expectations upside down.
| | 02:34 | No designer can anticipate every possible
factor that may compromise an
| | 02:38 | estimate, but designers can understand
their own work ethic and process, then
| | 02:42 | communicate those to their clients
at the start of the project.
| | Collapse this transcript |
| Estimate worksheet| 00:00 | Please find the estimate worksheet in your resource guide.
| | 00:03 | Here's a template that can help you to price your work.
| | 00:07 | Doing an Estimate Worksheet like this
can help you visualize how you will
| | 00:10 | approach the project from a money standpoint.
| | 00:13 | It will step you through each aspect
of the project and remind you to attach
| | 00:17 | hours to each part of the process.
| | 00:19 | Then, you'll do the math.
| | 00:21 | Take your estimated hours and
multiply them by your hourly rate.
| | 00:24 | That gives you a clear picture of
how time equals money on the project.
| | 00:29 | This template can also serve as a reminder
to factor in subcontracted services,
| | 00:34 | in case you have other
creative professionals, for example;
| | 00:37 | a junior designer doing production who
will be working with you on the project.
| | 00:41 | So it's not just your time, it's
the entire team's hours that you are
| | 00:45 | calculating to develop the design fee.
| | 00:48 | I recommend that you create your own
customized version of an Estimate Worksheet
| | 00:52 | that will make sense for your design practice.
| | 00:55 | Some designers do these worksheets
in Excel and take advantage of the
| | 00:58 | mathematical capabilities of the software.
| | 01:02 | Project management software programs
typically do a great job of helping you
| | 01:06 | figure out estimate breakdowns like this,
so you can utilize those if you like.
| | 01:10 | The point here is to have some sort of
methodology for pricing jobs thoroughly,
| | 01:14 | accurately and consistently from project to project.
| | Collapse this transcript |
| Ways to price your work| 00:00 | You need to learn about pricing,
but that's not the focus of this course.
| | 00:04 | However, let's briefly talk about it here.
| | 00:07 | As I have mentioned, all estimated design projects
must include the following categories of money.
| | 00:13 | Fees, which is a designer's compensation
for their labor, expertise, and value
| | 00:18 | and Expenses, which are all the reimbursable
out-of-pocket costs for items
| | 00:23 | purchased specifically for the project.
| | 00:26 | You'll need to come up with
a dollar figure for both categories.
| | 00:29 | One way to think about setting your design fee
is to base it on your hourly rate;
| | 00:33 | you break down the project into phases
and try to assess how many hours you
| | 00:37 | think you, and/or your team
members will work on each phase.
| | 00:41 | Multiply the Estimated hours by your
hourly rate and you'll have a fee calculated.
| | 00:46 | It's interesting to note that two design firms
can have the same rate and
| | 00:50 | calculate the same project completely differently.
| | 00:53 | Or two firms can have vastly different
hourly rates and come up with the same fee.
| | 00:58 | A trusted client may be candid and tell you
what competitors would charge on a
| | 01:02 | particular job, especially if they
didn't end up hiring that designer.
| | 01:06 | It's important to learn why a design firm
lost out an opportunity, but remember,
| | 01:11 | it isn't always a question of money.
| | 01:13 | There are a number of factors that play in any hiring decision.
| | 01:16 | Plus you can always just ask the client
what their budget is, they just might tell you.
| | 01:22 | Another useful strategy for learning
about pricing is to develop relationships
| | 01:26 | with other designers who will talk money with you.
| | 01:29 | There are some Published resources on pricing
that you might want to check out as well.
| | 01:33 | For example, the Graphics Artist Guild
has a book called the Pricing and Ethical Guidelines
| | 01:37 | that many designers find useful.
| | 01:40 | The thing is only by keeping very good records,
especially timesheets on
| | 01:44 | projects and comparing estimates to actual costs,
can you price your work accurately over time.
| | 01:49 | Another thing to consider when pricing
design is ownership of the work, this
| | 01:54 | concept is tied to the designer's intellectual
property rights and the client's
| | 01:58 | right to use the work they commission
the designer to create.
| | 02:01 | Therefore, rights and usage impact fees.
| | 02:04 | Factors to consider when thinking about
the material worth of Usage Rights and
| | 02:08 | your fee for a design include, the Value placed
on similar work, perhaps even
| | 02:12 | for the same client, the Category or Media
in which the work will be used, the
| | 02:17 | geographic location, or territorial area
for the distribution of the work.
| | 02:22 | Also how the client will use the work,
for what purpose, how long will the
| | 02:26 | work be used, and how many items will be produced
that incorporate the work, also factor in.
| | 02:31 | Rights and Compensation is a good
topic to discuss with your attorney.
| | 02:35 | You can also seek more information about intellectual
property from various design organizations.
| | 02:39 | Know your rights, know your clients' needs,
| | 02:43 | and know the laws at the intersection of these two things.
| | Collapse this transcript |
| Estimated expenses| 00:01 | Out-of-Pocket Expenses are the costs of
those items that you purchase on behalf
| | 00:04 | of the client, specifically for a project.
| | 00:07 | These cost should not be lumped in to your fee, they
should be estimated and bulled separately as expenses.
| | 00:13 | Go ahead and determine all of the various items
that you might need to buy for a project,
| | 00:17 | from a new type font to large format color printouts.
| | 00:22 | You will total them up and add them to
your agreement as a separate line item.
| | 00:27 | You can also state what expenses are not included.
| | 00:29 | In that case, inform the client that these items
can and will be estimated separately at a later time.
| | 00:35 | For example, you think you want to
include an Illustration, but it isn't
| | 00:39 | concepted yet at the time you're writing
up the contract, so it can't be priced yet.
| | 00:44 | Let your client know that changes in the project, revisions,
and rush deadlines can affect the cost of expenses.
| | 00:51 | Tell the client that expenses over the
estimated amount shown will be submitted
| | 00:55 | for approval prior to expenditure.
| | 00:57 | Here again, state that you'll provide a Change Order,
this reassures a client
| | 01:02 | that you will not rack up a lot of expenses
without their okay.
| | 01:06 | It's Standard Creative Business Practice
to bill expenses at their actual cost,
| | 01:11 | plus a markup of 15 to 25%.
| | 01:14 | This service charge markup is included
because you are acting as the bank and
| | 01:18 | fronting the money for the purchase
of these items for your client.
| | 01:21 | In doing this, you are guaranteeing delivery
and quality as well.
| | 01:25 | You are also spending time doing it,
and as we all know, time is money.
| | 01:29 | However, the main justification is that adding
a markup is a standard design industry practice.
| | 01:35 | That means it's something most designers do,
and you should too.
| | 01:40 | The client suppliers can be used instead of yours,
that way these suppliers can
| | 01:45 | bill the client directly and not pass it through you.
| | 01:48 | If that's the case, the client needs to give you
the relevant account numbers and alert the supplier.
| | 01:53 | Make sure you charge for all your time in managing
and dealing with that supplier as part of your design fee.
| | 02:00 | The Estimate worksheet that we reviewed in a
previous movie can be used for estimating expenses.
| | 02:06 | You can create a master list of everything and
anything you might need to buy for your projects.
| | 02:11 | By the way, how do you know what to charge
for in-house supplies like color printouts?
| | 02:16 | Research whatever it would cost you to buy them
from an outside service and then charge that price.
| | 02:22 | So, you'll need to think through
Project-by-Project what expenses you'll be
| | 02:25 | incurring specifically for that job,
this can include Creative and Office
| | 02:30 | Supplies, Type and Licensing Agreements,
Other Creative Services like
| | 02:34 | Photography, or Animation and
Shipping, and Travel costs as well.
| | 02:39 | Some of these expenses will be obvious
to the client and some may not.
| | 02:42 | For example, you may be one of
those designers who does a lot of color
| | 02:46 | printouts, so that you can critique the work in progress.
| | 02:49 | The client may only see a fraction of
these printouts, but I would argue that
| | 02:53 | they are necessary to do the work,
and therefore, the cost should be passed
| | 02:56 | along to the client as an expense.
| | Collapse this transcript |
| Incorporating estimates from suppliers and subcontractors| 00:00 | Often a big part of Designer-Client Agreements
is the incorporation of other
| | 00:04 | creative suppliers' bids as well.
| | 00:06 | You need to get very organized and precise
about that, so you can that include
| | 00:11 | these costs in your own agreement.
| | 00:13 | When getting estimates from others to
incorporate, make sure your terms and
| | 00:16 | conditions and theirs are the same, and that
everyone is lined up with the client's expectations.
| | 00:21 | Discuss Rights and ownership of the work product.
| | 00:24 | Remember, that you can't sell their
work to the client, unless you own it.
| | 00:28 | Review and confirm all schedules and deadlines.
| | 00:31 | Come to a definite position on how many
revisions and alterations are included
| | 00:36 | in this suppliers bid, and make sure
to define a quality assurance process,
| | 00:40 | because it's your reputation on the line.
| | 00:43 | You can estimate everything upfront
and include these figures in your
| | 00:47 | Designer-Client Agreement, or wait
until you actually concept the design to
| | 00:50 | provide these numbers.
| | 00:52 | Waiting is obviously more accurate,
but your client may need to establish a
| | 00:56 | complete project budget for approval
prior to beginning any work.
| | 01:00 | In that case, state a range and make it a bit high.
| | 01:04 | If you purchase expensive items like printing,
you are entitled to a markup, and
| | 01:08 | that can be very enticing on a big-ticket job.
| | 01:11 | However, because certain items are so costly,
many designers prefer to have some
| | 01:16 | suppliers bill the client directly.
| | 01:18 | You lose your markup,
but you don't incur liability for the costs.
| | 01:23 | If you choose to have the supplier bill directly,
you should include
| | 01:26 | production/supervision time in your design fee.
| | 01:30 | Another option is to have the supplier include
your markup and their invoice, and then pay you.
| | 01:36 | The recommendation here is that you can
never go wrong being upfront with your client,
| | 01:40 | producing receipts and showing the markup
for supplier services on your invoice.
| | 01:46 | But getting paid a fee by the supplier
may appear to some clients as shifty,
| | 01:51 | if they weren't aware that was happening.
| | 01:53 | Going behind a client's back could seriously affect
your professional credibility with them.
| | Collapse this transcript |
| Amending contracts with change orders| 00:00 | A Change Order is an amendment or addition
to an existing, approved, and signed
| | 00:05 | Designer-Client Agreement.
| | 00:07 | It means something has been added to or
changed within the approved scope of work.
| | 00:12 | Typically, it's because the client has asked you
to expand the project with more
| | 00:16 | components or additional revisions.
| | 00:18 | In essence a Change Order is a
Contract Update that results in
| | 00:22 | Additional fees and/or expenses to be
paid by the client and Additional time for
| | 00:26 | the designer to complete the work.
| | 00:28 | The Change Order document should
look like the original agreement.
| | 00:32 | Legal terms and conditions can be omitted
and just referred to with language
| | 00:36 | such as work covered under this Change Order
is subject to the Terms and
| | 00:40 | Conditions agreed to in the
Designer-Client Agreement dated "x".
| | 00:45 | In rare instances a Change Order will outline
a decrease in the Designer's fees and/or expenses.
| | 00:51 | Typically, designers opt to simply
reduce the final invoice to reflect the
| | 00:56 | reduced scope of work, rather
than send Change Order saying that.
| | 01:00 | Please look at the sample change order
in your resource guide.
| | 01:04 | As you can see a Change Order
looks a lot like the first page of your
| | 01:07 | Designer-Client Agreement.
| | 01:09 | It should include your contact information,
the client's contact information,
| | 01:15 | the Date, the Name of the project, a
description of New scope of work, the
| | 01:20 | additional fees and expenses, and dated signatures.
| | 01:23 | You'll have stated in your Designer-Client Agreement
that you may if necessary provide a change order.
| | 01:30 | So, when the time comes, your client
should be expecting to receive it, because
| | 01:34 | they've asked you for more work or additional revisions.
| | 01:37 | Providing a change order in writing
as a formal document, rather than just
| | 01:41 | verbally discussing changes in their
financial repercussions with the client gives
| | 01:45 | you a solid legal document.
| | 01:47 | It also helps keep clients in check,
because they've been alerted that their
| | 01:51 | additional changes will mean that
you expect additional time and money.
| | 01:56 | I recommend that you send the change order out
as soon as you understand the
| | 02:00 | client's request for additional services.
| | 02:02 | As with your Designer-Client Agreement,
create a PDF of the document and email
| | 02:07 | it to the client for approval and signature.
| | 02:09 | If the client objects to the change order, discuss it,
preferably by phone or in person immediately.
| | 02:16 | Negotiate a new deal, revise the change order
to reflect that and resubmit it to the client for approval.
| | 02:23 | Don't proceed with work until the client approves
the change order and your agreement is officially amended.
| | Collapse this transcript |
|
|
4. LegaleseThe legal language: Terms and conditions| 00:00 | The Terms and Conditions copy I'm recommending
you include may seem like a bunch of legal mumbo-jumbo.
| | 00:06 | But it's a very important part of your
Designer-Client Agreement, because it protects you.
| | 00:10 | You should have a working knowledge of
this language so that you can include
| | 00:14 | relevant clauses or legal paragraphs in your agreements.
| | 00:18 | You can't put something into your contracts
that you yourself don't understand.
| | 00:22 | Imagine how dumb you'll feel if a client asks
you to explain something and you
| | 00:26 | have no idea what that clause means.
| | 00:28 | So, don't skip over this part.
| | 00:30 | Remember, this is your contract and it's
all about setting up a deal that benefits you.
| | 00:35 | There are many items that can be covered
under the heading Terms and Conditions.
| | 00:40 | Let's go over a few I think are important to most designers.
| | 00:43 | First, it's important to include a statement
about how and when you'll be paid
| | 00:47 | for the work you doing for the client,
that's called Payment Terms.
| | 00:51 | Secondly, you want to state who owns the work
and how it can be used by both you
| | 00:56 | and the client, that's called Rights & Usage.
| | 00:59 | Plus Accreditation and Promotion clauses also relate to this.
| | 01:03 | There is a need to make sure that the
material that the client provides you can
| | 01:08 | be legally incorporated into the work
you're doing; that issue can be covered
| | 01:12 | under a clause about Third Party Materials.
| | 01:16 | The client may want you to include a clause
that promises that the work you do
| | 01:19 | for them will be original and not infringe
on other people's copyrights;
| | 01:23 | that is called Warranties and Representations.
| | 01:26 | And of course, you want to cover how you and the client
will get a divorce if things go really bad.
| | 01:32 | The Clauses about Kill Fees, Dispute Resolution,
and Governing Law are relevant here.
| | 01:38 | All of these issues and more
can be covered in your agreement.
| | 01:41 | Think of the Terms and Conditions as a legal description
of your working relationship with the client.
| | 01:48 | Look, I am not going to lie to you,
learning about contract Terms and Conditions
| | 01:51 | will require some dry reading, followed
by some analysis of what matters to you,
| | 01:56 | so that you can decide on which terms to include.
| | 01:59 | All that will then require bunch of typesetting
in order to setup this information in your agreement.
| | 02:04 | But do it once, do it right, and unless
the laws change drastically, you won't
| | 02:08 | have to do it again, you'll just copy, paste these terms
into all your future agreements, one and done.
| | Collapse this transcript |
| Using the AIGA Standard Form of Agreement as a terms template| 00:00 | The AIGA is the oldest and largest
graphic design organization in the U.S.
| | 00:06 | Thousands of designers are members
and join together to discuss, promote and
| | 00:10 | educate themselves and the public about design,
as an art form and an industry.
| | 00:15 | I encourage you to check out the organization
and consider becoming a member.
| | 00:19 | One of the cornerstone projects that
the AIGA has undertaken for decades
| | 00:24 | is the development of the AIGA Standard
Form of Agreement for Design Services.
| | 00:28 | It's a document created by a team of
design and legal professionals that serves
| | 00:34 | as a great template and guide to the legal terms
and conditions in a Designer-Client Agreement.
| | 00:40 | I like this document as a reference tool,
because it is very thorough.
| | 00:44 | You don't have to be an AIGA member
to access and use this free document.
| | 00:48 | You'll see that it has about 50 pages, don't get
all nervous on me, let's walk through it together.
| | 00:54 | First, you'll see the information about
how to setup and use an agreement;
| | 00:58 | we're going to skip that part.
| | 01:00 | The next part breaks down what
each of the possible clauses in a
| | 01:04 | Designer-Client Agreement means.
| | 01:06 | I'd like you to look this part over carefully.
| | 01:09 | In the next part you'll find the actual legal language
for each clause,
| | 01:13 | you can literally copy paste that language
right into your own agreements if you choose to.
| | 01:18 | Finally, the last part of the AIGA document
is a collection of supplements
| | 01:22 | containing legal language to cover specific areas
of practice, like web design for instance.
| | 01:27 | By the way there are other organizations
that also provide sample contracts for
| | 01:32 | creative services, for example, the Graphics Artist Guild,
which a lot of designers and illustrators like.
| | 01:39 | There's the Association of Independent
Commercial Producersthe AICP,
| | 01:44 | which motion graphics designers, some
interactive designers and the live action
| | 01:48 | commercial production firms use,
and then there's the Canadian design
| | 01:52 | organization called RGD/Ontario that is super helpful, too.
| | 01:57 | Not all of these resources are free to the public,
but their members have access
| | 02:01 | to some very good information.
| | 02:02 | That's why I say you should check out design organizations,
they are an amazing resource.
| | Collapse this transcript |
| Challenge scenario: Terms and conditions| 00:00 | Let's bring that dry illegal copy to life
with a few practical challenges.
| | 00:05 | I'll describe a few scenarios that demonstrate
how terms and conditions can protect you from disaster.
| | 00:11 | For each scenario you should search for the answers in the
AIGA Standard Form of agreement for design services.
| | 00:17 | You can get this form by pointing your browser
to aiga.org, then type in the
| | 00:22 | search term, and download the file.
| | 00:26 | After listening to each scenario, you'll
want to write your answers in the terms
| | 00:30 | and conditions worksheet that
I've provided, so get that ready, too.
| | 00:34 | In the first scenario you start a project
and invoice half the fees upfront,
| | 00:39 | you expect the client will send you a
check immediately, it doesn't happen.
| | 00:43 | When you call the client, they tell you
that they expected to pay you in full at
| | 00:47 | the end of the job and the check will
come about a month after the invoice is
| | 00:51 | processed by their accounting department.
| | 00:53 | What clause can you include to make sure
you get paid how you prefer?
| | 01:06 | In Scenario 2, you've done great creative on a
project and you think you could get a lot of buzz,
| | 01:11 | so you send it to design blogs and enter it into contests.
| | 01:15 | The client sees the work in a publication
and contacts you immediately to tell
| | 01:19 | you to not show that work again publicly.
| | 01:21 | What clause did you forget to include?
| | 01:32 | In Scenario 3, you've designed and implemented a new
identity system for client's medical product.
| | 01:39 | Later, it comes to your attention that
a small local health food restaurant has
| | 01:43 | a similar feeling logo, you're embarrassed,
but you didn't copy it and it is a
| | 01:48 | pure coincidence that the other logo
has the same vibe as yours.
| | 01:52 | How do protect yourself in cases like this,
especially if the client wants to
| | 01:56 | take legal action against you?
| | 02:06 | In Scenario 4, you're in Omaha and you client is in Orlando.
| | 02:10 | How do you make sure that any legal problems
will be handled in your hometown and not theirs?
| | 02:16 | What if you want to avoid expensive
court costs if things turn really bad?
| | 02:20 | What language can you add to your contract?
| | 02:31 | Okay, take a few minutes to research these scenarios
and write your answers in the worksheet,
| | 02:36 | then check out the solution video where I reveal the answers.
| | Collapse this transcript |
| Challenge scenario: Answers| 00:00 | Okay, so these are just a few bad situations
you might experience. Believe me,
| | 00:05 | there are many more potential
pitfalls in client relationships.
| | 00:09 | The point is this boring legal copy
can really save your bacon.
| | 00:14 | The answer to Scenario 1 is Payment Terms,
stating that the payment is "Due Upon
| | 00:19 | Receipt of Invoice," also, info on late payments applies here.
| | 00:24 | The answer to Scenario 2 is
Accreditation and Promotional usage.
| | 00:30 | The answer to Scenario 3 is
Warranties and Representations, plus Add
| | 00:35 | Language that says "The work covered
under this Agreement is the designer's
| | 00:39 | original creation, it does not infringe on others'
work to the best of the designer's knowledge."
| | 00:46 | Related is Indemnification, which
protects the designer and Damages:
| | 00:52 | in case it escalates and the client wants you
to make it right, financially compensating them.
| | 00:57 | Usually you are liable to pay a client back
no more than the fee you receive for
| | 01:02 | the job in the first place.
| | 01:04 | The answer to Scenario 4 is Governing law,
dispute resolution information and arbitration clauses.
| | 01:11 | I've noticed that novice designers
tend to include very few terms and conditions,
| | 01:16 | but as they practice and run into disasters
over the years, their
| | 01:20 | agreements grow to include many more clauses.
| | 01:23 | My recommendation is to use very complete
terms and conditions right upfront and
| | 01:28 | follow the AIGA documents lead.
| | Collapse this transcript |
| Reviewing a sample contract| 00:00 | Let's review a few more samples
of Designer-Client Agreements.
| | 00:04 | Please look at sample contracts
numbers 4, 5 and 6 in your Resource Guide.
| | 00:11 | Sample 4 has the format and
structure I have recommended.
| | 00:15 | This is a web design contract and it's
interesting that the designer used little
| | 00:19 | wireframe diagrams to describe
the scope of work for the site.
| | 00:24 | You'll notice that this designer has
included two pages of numbered terms and conditions;
| | 00:28 | nothing too lengthy, but the designer is covered
for the things that matter most to them.
| | 00:36 | In contracts Sample 5 the designer has
used more extensive phase description
| | 00:40 | copy and actually priced each phase
separately in Part 1 of the agreement.
| | 00:46 | Their terms and conditions in Part 2 are typeset
as paragraphs with bold subhead names.
| | 00:52 | They've use slightly smaller type than was
used in Part 1 of the Agreement.
| | 00:57 | Contract Sample 6 has 2 parts;
| | 01:00 | this is the sort of Agreement situation
a motion graphics designer would use.
| | 01:05 | First, they have done an estimate
using their preset bidding software.
| | 01:10 | They submit that to a client and get the budget approved.
| | 01:14 | Then they submit a contract that is only terms and conditions.
| | 01:18 | This is not the structure I have advised
you to use in this course, but it does
| | 01:22 | happen that some designers will split
up parts 1 and 2 and send them to the
| | 01:26 | client separately in a two-step process.
| | 01:29 | There are many ways to design a contract;
| | 01:31 | the most important thing is that you make one for
every project you undertake for a client.
| | 01:37 | How it actually looks?
| | 01:39 | Well, that's up to you.
| | Collapse this transcript |
|
|
5. Contracts and ClientsImplementing the agreement| 00:00 | Now that I've explained what goes into a
Designer-Client Agreement, let's talk about how to use it.
| | 00:06 | How should you approach implementing
contracts in your practice?
| | 00:09 | I'll walk you through a project workflow overview.
| | 00:12 | First, you'll get a call from the client.
| | 00:15 | Typically you'll meet to a portfolio
review and listen to a client problem.
| | 00:21 | You get briefed on the project, hopefully
the client will give you some
| | 00:24 | idea about the schedule as well. From this
information you'll scope the work and price it.
| | 00:30 | Next, you will create a Designer-Client Agreement
that would be based on a
| | 00:34 | standard template you've created
but customized for this project.
| | 00:37 | Then you'll submit it and get the client
to approve and sign the agreement.
| | 00:42 | Once it's approved, then and only then will you start design.
| | 00:47 | My best advice to you, never practice design
without an approved agreement.
| | 00:52 | Once your agreement is approved,
I recommend that you invoice the client
| | 00:56 | for partial payment on the project.
| | 00:58 | There are a number of payment strategies you can use;
| | 01:01 | my favorite is half up front, half upon completion.
| | 01:04 | Or you could do one third deposit at the start,
one third upon design approval,
| | 01:10 | one third upon completion of the project.
| | 01:12 | Or a monthly retainer; if it's an
ongoing relationship, not just one project,
| | 01:18 | you can drop an agreement for a set monthly
fee for a particular number of hours of design.
| | 01:24 | Or for really large projects, stretching
over several months, you can break the
| | 01:28 | design fee into monthly payments.
| | 01:31 | Some designers create a complete
Designer-Client Agreement as I've outlined
| | 01:34 | in this course, for the first project
with the client, and then for
| | 01:38 | subsequent projects with the same
client, they treat the original contract as
| | 01:41 | a kind of umbrella agreement.
| | 01:43 | What I mean is for the next projects they do
shorter agreements without the terms and conditions.
| | 01:50 | They only include dates, contact info,
project name and scope of work
| | 01:55 | description, fees and expenses.
| | 01:58 | The designer refers to the original
Designer-Client Agreement and says that the
| | 02:01 | same terms and conditions apply to this new project.
| | 02:05 | It's a little bit faster to write up
agreements this way, but I think the main
| | 02:09 | reason designers do this is that a
short agreement seems friendlier looking.
| | 02:13 | It's up to you, but I offer it to you
here as a possibility for your practice.
| | Collapse this transcript |
| Negotiating contracts with clients| 00:01 | Negotiation is not a dirty word;
| | 00:03 | it's all part of the process
of making a deal with clients.
| | 00:06 | You'll create your Designer-Client
Agreement and present it to the client.
| | 00:10 | They may not agree with 100% of what
you've requested, the trick here is to
| | 00:14 | understand what they object to, and see
if it's something you can live with or not.
| | 00:18 | Some things are deal breakers, some aren't.
You can always counter their
| | 00:22 | demands with a compromise.
Meeting in the middle is a kind of win-win
| | 00:26 | situation, maybe you both give a
little bit in order to reach a happy place
| | 00:30 | that you can both live with.
| | 00:32 | Remember, it's far easier to make a
deal with this client than to go out
| | 00:35 | prospecting for a new one,
just make sure not to sell yourself short.
| | 00:39 | Not every designer is driven by money,
| | 00:42 | lots of them are much more interested
in the artistic aspects of projects.
| | 00:45 | I think it comes down to balancing both aspects.
| | 00:49 | Sometimes you'll find that a client you want
to work with says they can't afford your fee.
| | 00:54 | The question is what is really happening in this situation?
| | 00:57 | To investigate further, ask these questions;
| | 01:01 | will they ever be able to afford it
or is this a temporary problem?
| | 01:06 | Do they really want to work with you?
| | 01:08 | Can the scope of work be narrowed?
| | 01:11 | Can this client provide you with referrals for other work?
| | 01:14 | Will you get a great portfolio piece out of this project?
| | 01:18 | Can you have longer to work on the project?
| | 01:20 | That way you can fit this job in, in between other work.
| | 01:24 | Will you gain new experience or recognition or credibility
or some additional benefit other than money?
| | 01:31 | Is it worth taking this project for a reduced fee?
| | 01:35 | You may want to negotiate aspects
of the project that affect pricing.
| | 01:39 | If this project is going to challenge
you creatively in such a way that will
| | 01:43 | open new doors, pay you to learn new
skills that can be marketed to other clients,
| | 01:48 | or allow you to work with some exciting
new collaborators, then you
| | 01:51 | might find it more than worth your while to do this
project for less money than you asked for originally.
| | 01:57 | You may run in to some clients with
business affairs offices full of lawyers
| | 02:01 | that will take your Designer-Client
Agreements and absorb it into their own
| | 02:04 | contracts that are 10 to 20 pages long.
| | 02:06 | Just take a deep breath and read it over carefully.
| | 02:10 | Strike out lines, insert your own statements, etcetera.
| | 02:13 | in order to make sure that your key requests are not omitted.
This is often called redlining a contract.
| | 02:20 | Call the client back and discuss it professionally,
often you can easily come to a compromise.
| | 02:25 | But if you can't seem to understand
their legal verbiage or you can get the
| | 02:30 | client to agree with you, contact your lawyer.
| | 02:33 | Although a skilled contract lawyer can
be expensive, in the long run they can
| | 02:37 | save you time, money and aggravation.
| | 02:40 | Don't be afraid of the lawyers either,
because you now have been shown in this
| | 02:44 | course what a contract needs to do for you.
| | 02:46 | Lawyers just simply translate your wishes
into that obtuse language of theirs.
| | 02:51 | It's kind of job security thing they have.
| | 02:53 | But when you think about it, these agreements
are kind of job security for you, too.
| | Collapse this transcript |
| Managing an agreement| 00:00 | Your approved Designer-Client Agreement
gives both you and your client a roadmap
| | 00:05 | for how the project will proceed from start to finish.
| | 00:08 | It outlines how you'll work,
provides points in the process for approvals and
| | 00:13 | clearly indicates what you must deliver to the client;
| | 00:16 | therefore, it's a handy document to use
in managing your work.
| | 00:20 | You may have noticed that I don't recommend
that you include a schedule in your agreement;
| | 00:24 | this is because it's the most changeable
aspect of any design project.
| | 00:29 | If a client misses a deadline and doesn't
approve something as planned, your
| | 00:33 | whole schedule can be blown, however,
if due dates are written into your
| | 00:37 | agreement, you are then contractually bound
to meet that schedule.
| | 00:41 | You don't want to be in breach of your
own contracts, meaning failing to fulfill
| | 00:45 | your agreement, so just make
schedules a separate document.
| | 00:49 | Maybe you're shaking your head now and
saying my client forces me to include a schedule.
| | 00:55 | Okay, well, if you can't talk them out of it,
then by all means be vague.
| | 01:00 | Say for example, that Phase 1 will take
two to three weeks, rather than it will
| | 01:04 | be completed on a specific date, that gives
you some room for the timing to slip a bit.
| | 01:10 | If you use project management software,
you can transfer key information from
| | 01:14 | your Designer-Client Agreements into your system.
| | 01:17 | In order to price the project, you've likely
estimated the anticipated hours for each phase.
| | 01:23 | If you input your estimates into the software
you'll be able to track your
| | 01:27 | actual time against what you estimated,
this is tremendously helpful for both
| | 01:31 | managing your time and for pricing
more accurately in the future.
| | 01:35 | Your project management software can
alert you to the need for a change order,
| | 01:39 | because you can monitor your timesheets and see
if you're exceeding the scope of work and/or the budget.
| | 01:45 | If you have a design firm, you can see
that managing several people and keeping
| | 01:49 | track of the work against your agreement is crucial.
| | 01:51 | Designer-Client Agreements are a great tool
for managing client expectations.
| | 01:56 | Since everything has been outlined and discussed,
| | 01:59 | all you need to do is focus on the creative.
| | 02:01 | Do what you said you were going to do,
exactly as you've described it in your agreement.
| | 02:07 | Being successful at a service oriented
consulting practice like graphic design,
| | 02:11 | is about catering to client needs
| | 02:13 | as well as your own bottom line,
all the while maintaining creative excellence.
| | 02:18 | You need to run your projects as you've
planed them in order to be profitable.
| | 02:23 | Your agreement becomes an essential
business tool in that regard.
| | 02:26 | Profitability is just one indicator that a design firm
is on the right track and successful in its practice.
| | 02:32 | There are other indicators, but at the end of the day,
| | 02:35 | you can't stay in business if you don't
run your practice in a profitable manner,
| | 02:39 | so plan your work and work your plan.
| | Collapse this transcript |
| Problems and dispute resolution| 00:00 | In my design career I've never
once gone to court with a client.
| | 00:04 | I believe that's because of the proactive use
of Designer-Client Agreements.
| | 00:08 | This practice has prompted the kind of
thorough conversations with clients that
| | 00:12 | help avoid trouble completely, so that
we can all focus on doing great work,
| | 00:16 | instead of fighting over business details.
| | 00:19 | However, try as you might, there are times
when misunderstandings and issues arise.
| | 00:24 | I advise you to deal with little problems,
rather than avoid them and have them
| | 00:27 | turn into big problems.
| | 00:29 | Communication is key.
| | 00:31 | Don't shy away from confrontation at
the start, only to have to deal with it
| | 00:35 | later in a formal dispute resolution scenario.
| | 00:39 | No designer wants to get tangled up in
a legal battle with their client,
| | 00:42 | butsometimes you might need to seek out
formal resolution to a serious problem.
| | 00:46 | Of course you'll try talking to and
negotiating with the client first.
| | 00:51 | Hopefully that settles things, but if
it doesn't work, you have several options
| | 00:55 | for dispute resolution.
| | 00:57 | You can take a client to small claims
court in the US; this doesn't require an
| | 01:02 | attorney, but there are caps on the financial awards.
| | 01:06 | Bigger problems might require a lawsuit and litigation.
| | 01:08 | You'll need to find a litigator, an attorney
who specializes in fighting battles in court.
| | 01:14 | It should be a person who has experience
representing designers, or you
| | 01:18 | can pursue what's called
Alternative Dispute Resolution or ADR,
| | 01:22 | which although similar to dealing with the court
system, is typically faster and less expensive.
| | 01:28 | There are two main methods to choose from;
| | 01:30 | mediation, in which a legal professional
often retired judges or litigation attorneys
| | 01:34 | listen to both parties and helps
them understand each other's
| | 01:38 | viewpoint in order to facilitate a settlement.
| | 01:41 | The mediator's opinion is nonbinding, meaning
both parties do not have to implement it.
| | 01:46 | The second method is arbitration;
| | 01:49 | it's a process in which you and the
client consent to the judgment of an
| | 01:53 | impartial third party who listens to
your dispute and comes to a binding
| | 01:58 | decision that you both agree to adhere to.
Arbitration is the dispute resolution most designers choose.
| | 02:05 | You need to select a dispute resolution method.
| | 02:08 | State your preference in your Designer-Client Agreement
and get your client to
| | 02:12 | approve of it, before there is any need for it.
| | 02:14 | I give you some suggestions in the terms
and conditions movie in this course, on
| | 02:19 | how to include the appropriate language in your contract.
| | 02:22 | Think of it as a prenup with your client,
that hopefully you'll never ever need.
| | Collapse this transcript |
|
|
ConclusionNext steps| 00:01 | Hopefully I've demystified design
contracts for you, and you now feel
| | 00:05 | comfortable developing your own
Designer-Client Agreements.
| | 00:09 | Please, take my advice, never
practice design without a contract.
| | 00:13 | Don't begin work on a project without
a legally binding agreement. Why?
| | 00:18 | Because the more buttoned up you are at the start
of the project, the more the client will trust you.
| | 00:24 | And the more the client trusts you as
a solid professional, the more risk you
| | 00:28 | can take creatively and still have the client approve it.
| | 00:31 | So thank you for watching, and remember,
good contracts can mean great creative.
| | Collapse this transcript |
|
|
