Project Management

How independent contractors can avoid getting burned by too many client revisions

Don't let multiple client revisions lead you to do unpaid work that's beyond the scope of your contract. Meredith Little offers tips on how to handle these client requests.

 When you're a contractor, client revisions and changes are among the most frustrating aspects of any project. Depending on the payment terms you've worked out, round after round of revisions can reduce your profit on that project to a fraction of what you expected.

However, you are contractually obligated to deliver what your clients want. Let's take a look at how to handle requests for revisions that are beyond the scope of your contract or -- much worse -- are incredibly time-consuming but not necessarily outside your contract.

What does the contract say?

One of the defining conditions of any independent contract project is that the client doesn't control how you perform the work, but instead, has the right to accept or reject the finished result. How clearly your contract defines that end result can make or break you as a contractor. But what do you do when the contract is already written and signed? When faced with a request for a revision that you think is unduly burdensome, first refer to your contract.

In-scope vs. out-of-scope

The most important clause in the case is the one defining the scope of work. The more detailed and precise you made this clause when you signed the contract, the more guidance you will have when dealing with revisions.

If the revision is clearly beyond the scope of the contract, you can offer to perform the additional work for additional compensation. If you find that the revision is clearly within the scope of the project -- either because your work is deficient or because the scope wasn't clearly defined -- you pretty much have to do the work or risk breaching the contract.

If the revision falls in a gray area, you'll have to weigh what doing the revision will cost you in terms of time and your payment terms and proceed from there. If you're paid by the hour, it may be no big deal. However, if you've bid on the project for a fixed fee, you may be less inclined to perform every change.

Types of revisions

It's important to point out that you should always expect some client revisions, and you should have factored that into your bid. The client has a right to receive the work they expected. Requesting one or two revisions is probably reasonable but six probably isn't.

If a change relates to the inherent quality of the work, you need to revise as often as necessary. For example, if a document is rife with typos and errors, you should fix them at no charge. On the other hand, if the client wants you to rewrite a document according to AP style instead of Chicago style, that's clearly out of scope unless the client specified AP style in the contract. Therefore, you may choose to seek extra compensation.

Changes to the software/hardware

A big factor in many IT projects is changes to the software or hardware that you are developing or deploying.

If you were hired to develop one platform for one site and the client now wishes to add a second site or an additional system or network to the plan, this is almost certainly beyond your contract. Again, when such disputes begin, line-item descriptions within a contract's or project's scope section are invaluable. When both parties can see such an addition wasn't part of the original plan, it's much easier to create an addendum that ensures you get paid properly for the extra work/equipment.

Offer to write up a contract extension

If the work is clearly out of the scope of the contract, you can say to your client, "No problem. I'll write up a contract addendum and cost proposal for your review." When the client realizes that the change is going to cost more money and take more time, they may decide they don't want it. Or, they may accept your offer and pay for your extra work.

Head 'em off at the pass

Let's say that you're faced with a scenario in which the contract is already written, and you realize that you're approaching a situation in which, contractually, you may be forced to do a lot of extra work for no extra money. You can try to prevent the situation by incorporating certain processes into your work now, before the fact. Or, if you're already in the midst of the situation, you can simply approach the client and attempt to appeal to their sense of fairness.

Start using status reports and a review process

Not running your work by the client until the very end of the project is a great way to set yourself up for endless revisions. At certain deliverable milestones, whether they're in the contract or not, apprise the key person on your project of your progress to date. Especially if your scope of work is not well defined, meet with all the key people on a regular basis and make sure everyone is in agreement about what's been done so far and where you're going from here. You cannot over-communicate.

You can also incorporate a review process into your work at any point. Reviews are a great way to get feedback on the project and written assurance that your work to date is satisfactory. At intervals or in sections, submit your work to the key person on your project and make sure that person signs off on it. You don't need a new contract for this -- just a cover sheet that says something like "I have reviewed Jane Shane's work and found that it meets our goals for this phase of the project." It should have a space for the reviewer's signature and date.

Unless it's in your contract, this may not be legally binding. (Litigation should be a last resort anyway.) It won't necessarily avoid revisions later on down the road, but its strong evidence that the work was already accepted and approved to some degree. This can help you negotiate to either keep revisions to a minimum or to be paid for extensive revisions.

For both status reports and reviews, make sure you're dealing with the person or people who will be making the final decision on the project. It won't do you any good to have 25 signatures and enthusiastic reviews from folks who aren't ultimately in charge of approving or rejecting your work (or who are signing your checks or POs).

Attempt to reach a compromise solution

In a worst-case scenario, you may have to throw yourself upon the mercy of your client. If it's Month 10 of what you bid as a six-month project, you can attempt to renegotiate the contract, either reducing the scope of the work or increasing the compensation. (This is viable only if the delay is through no fault of your own -- something other than poor project estimation skills.) Don't renegotiate to make a bundle -- you'll have to accept some loss in this situation. And if that doesn't work, finish up as quickly as possible and make your contract more specific next time.

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9 comments
dave_helmut
dave_helmut

Good common-sense article and a good read. However I think you _can_ over-communicate. Too much information in status reports will make them harder to look at, and I've seen clients just ignore them completely because they don't have time to look at a multi-page Document. Months go by and problems that could have been nipped early can grow to serious proportions. Status reports should be brief and in an "at-a-glance" format. Red-flags or yellow-flags should be super easy to spot.

wizodd
wizodd

"...you are contractually obligated to deliver what your clients want." No. You are contractually obligated to deliver whatever the contract says you are to deliver. If your attorney let you out the door with a contract to deliver "what the client wants," change attorneys NOW. The very first thing to remember is the purpose of a contract. Do not take this for granted, a plethora of contracts out there (including enarly all shrink-wrap contracts,) have been written by people who don't seem to know what a contract is for...far too many attorneys think that the contract should completely absolve their client from any responsibility. In fact, a contract exists to make certain that everything continues to function properly in the relationship--despite any conflict which may arise. It's PRIMARY PURPOSE is to spell things our clearly enough that you will not NEED to go to mediation or court. To this end, it needs to establish guidelines for how to handle every aspect of the contractor-client relationship. Everything that can be, needs to be expressed in hard, measurable terms..."what the client wants" is a perfect example of a measureless term--and one which the client can, at any time, state that what you have delivered is not what they want. Without measurable goals, it is going to be a crap-shoot if it gets to court. Make certain that you have a contract clause to handle disputes, I prefer mediation as it is usually much cheaper than court. Make certain that the contract includes a definite procedure to evaluate and price additions and changes--most clients in my experience have no idea what they need, and what they want is usually not properly described. The process of system design and implementation is iterative, and the contract needs to recognize this fact--goals will change. Sometimes a request worded very simply is hiding thousands of dollars worth of effort. Customers cannot tell the difference between 'minor' and 'major' changes in many cases. Document everything. Get it in writing and get it signed, include phrasing that covers how a change will affect the contract time and payments. Watch out for subcontractor problems, and make sure that those contracts deal with such things as inability to deliver--this can bite you on your client contract, as many people do not recognize early enough that the job is bigger, or more complex than anticipated. Sit and negotiate the contract, since it governs the entire relationship with your client, you need to be certain that it details the obligations and rights of both of you, and both of you must understand the thing. This can take a bit of time. Spend it. Better to spend time up front negotiating a contract which you both understand and can work under than to have to fight about things later! It is, like so many things, all about communication. And it is not the things you don't understand that will bite you--its those things that you both THINK you understand, but have different definitions which will bite you down the line. Communicate often, verify communications by rephrasing what is said in different words so that you both get a firm understanding of what you are agreeing to. Remember that the last 10% of a job takes as much as the first 90%. If your contract is solid, and you both understand it thoroughly, then you should stay out of court, and stay on good terms. I once had a job in which we were handed a one-line change request that asked us to add a temporary number assigned to an order to a certain report. Once it was added, the client said "what about the rest of it?" The "rest of it" was the fact that this number had to stay attached to the order from start to finish. This added nearly 500 hours to the estimated time, as literally hundreds of programs needed to be modified. It was exacerbated by the fact that the client had already told this to the analyst who did the original estimate, but no one had put it on the request form.

PMPsicle
PMPsicle

This is a good example of when you need to make a decision regarding your project management methodology. If you are going with Agile, you need to identify exactly how many revisions (cycles) you are willing to go through. So the price given is based on x cycles and the result is entirely up to the client. If after the contracted number of cycles the client has nothing then that's their problem. Simply put the client then has to choose if they want to continue funding a lost project. If you are going with Waterfall, then the exact result is specified. The contractor is responsible for delivering exactly the specification in working order. Any revisions are a change to scope and therefore chargeable. Somewhere between the two extremes is where your client (and the contractor) wants to be. By choosing a fixed price project, the client has already indicated their preference. You need to then gauge their level of discipline, willingness to pay for revisions, and expected frequency of changes to determine what method to use (as in where on the spectrum you want your method to be). If you guess wrong, you'll end up eating the failure. It's also why I prefer hourly ... it allows the client to decide what is best for them rather than have me guess at what will produce a consistent level of profit for me. And since the result has more to do with them than me, I think that is fair. Unfortunately, in my experience, a demand for a fixed price usually indicates that the client is out of control and knows it. They are simply hoping that you will provide the control. (Government is an exception). I've seen too many cases where the client changes their opinion/ideas/mind on a daily/weekly/biweekly basis. So my advice is always "Manage fixed price, bill hourly". Glen Ford, PMP http://www.trainingNOW.ca

Sterling chip Camden
Sterling chip Camden

Especially in the type of consulting I do, where requirements begin from unknowns. Client revisions are no problem -- that's just more money. Doing work for free is far and away the exception, only when something is clearly due to my negligence. But Meredith makes a great point about communication -- regular status updates that are acknowledged by your client help to keep everyone from getting surprised.

Sterling chip Camden
Sterling chip Camden

Perhaps it should be worded, "you cannot communicate too frequently", but you should keep it concise. Actually, I guess you could communicate too frequently (e.g., every five minutes), but I doubt anyone ever would.

Sterling chip Camden
Sterling chip Camden

Good advice -- and it also addresses the tendency for hourly billers to "churn" (make more work than is strictly necessary). When you're hourly your client trusts you to be a good steward of your time -- and you must not betray that trust.

PMPsicle
PMPsicle

Problems take time to recognize, identify, determine a solution, solve the problem and resolve. The key is to pick a reporting cycle that allows you to do the first and yet still allows you to complete the first three before your superiors get too involved. If you pick a cycle that is too short then you may find senior management is trying to solve problems that you have already solved or chosen not to solve, because they think that you haven't done anything yet. In change management terms this is why resistance to change exists ... to slow our reaction time so that we don't turn a controlled situation into an uncontrolled situation by making changes too quickly. Glen Ford, PMP http://www.trainingnow.ca

PMPsicle
PMPsicle

There will always be a variance from the norm ... sometimes trying to adjust it will help ... sometimes it will make it worse. The trick is knowing the difference. Glen

Sterling chip Camden
Sterling chip Camden

... the fallacy of "we must do something". Sometimes the best plan is to do nothing and ride out the situation, but where a crisis is perceived that becomes difficult to do (or not do).