How to avoid legal problems in consulting

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I posted a newsletter recently entitled “When Clients Don’t Pay”.

I got a lot of responses in email, which is always encouraging. I’m happy to know that folks are reading and getting something out of my ideas.

One colleague suggested that I modify my last point about going to court. He suggested that legal action does make sense after other avenues are exhausted.

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My feeling about avoiding court, has only grown stronger over the years.

There are usually only a few reasons a customer won’t pay. In my experience each of them are avoidable without going to court.

Here are my thoughts on those…

1. Misaligned on tasks, deliverables or deadlines

I find weekly progress reports and endless notes go a long way towards avoiding this problem. If it does arise, there is usually something specific in those notes that can be remedied.

One also needs to be willing to compromise. Putting yourself in the other’s shoes will help to understand their perspective.

Communicate, communicate, and communicate more!

Related: When you have to take the fall

2. Budget problems

Here there isn’t a lot to do anyway. Although companies are obligated to meet payroll by law, they are not so with vendors. If they are out of cash, will court really resolve that?

My way of heading off this problem is, billing/invoicing in smaller increments, getting a deposit, and keep on top of things, so larger debts don’t build up.

Related: The fine art of resistance

3. Shady customers

These I usually suss out well before becoming engaged. I’ve had a few incidents where a prospect was meeting me to get “free advice”. They ask a lot of architectural questions, and take careful notes. Then don’t engage, or use their own people to implement.

One situation in particular I remember was around scalability. The product was a website & app for teachers. From the beginning they built it to sync data instantly. As they got bigger and more customers used the platform, their servers became heavily loaded.

I suggested, instead of looking for a technical solution, why not offer your customers, silver, bronze & gold service levels. For the gold customers, yeah they get their own servers, and can sync all the time. But for the silver ones, once-a-day would probably suffice. Much less load on the servers, because 75% of customers would go silver, 20% bronze and 5% gold.

They actually ran with the idea and implemented it, but never hired me even for an hour of work. I knew they implemented it because I had a friend in the company. It is experiences like that which teach you quite a lot about business and about how you conduct yourself.

This has happened a few times, and I guess it’s part of doing business. But usually that comes out before we go much further, so in a sense it’s a blessing in disguise. 🙂

Related: How to hire a developer that doesn’t suck

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Thank You for Arguing – Persuasion for fun and profit

thank you for arguing cover

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I first read about Heinrichs in a Bloomberg Businessweek piece on him. He’s quite a character, with high profile clients like Ogilvy & Mather and the Pentagon. Struck by some of his ideas, I decided to pickup Thank You for Arguing.

Related: AirBNB Didn’t Have to Fail – With AWS Outage

48 laws of soft power

Compiled into 25 very readable chapters, Heinrichs illustrates how to win trust through managing your voice with volume control for positive affect, verbal jousting and calling fouls, and mastering timing. Sure in the real world this is all going to require a lot of trial and error, and practice in the trenches. But his book serves as a very good guide along the way.

Also: 5 Conversational Ways to Evaluate Great Consultants

Don’t worry too much about Aristotle, Cicero or the classics you never learned in school. If anything they serve as a colorful highlight to his useful everyday illustrations.

Some examples worth recalling…

1. Have a disagreement at a meeting? Diffuse it with “let’s tweak it”.

2. Pay attention to your tenses:

o using past tense the conversation is trying to place blame
o using present tense you’re talking about values
o using future tense you’re considering choices and solutions

3. Pay attention to commonplaces – your audience’s beliefs and values

4. Effective argument works by:

o appealing to character (pathos) understand your audience’s personality
o using logic (logos)
o appealing to emotion (ethos)

Read this: RDS or MySQL – 10 Use Cases

[quote]
I know what I believe. I will continue to articulate what I believe and what I believe–I believe what I believe is right. – George W. Bush
[/quote]

He has one whole chapter on Bushisms, which I found intriguing. Bush used code grooming to very strong effect. When speaking to different groups, he emphasized these code words in his sentences. With women, words like “I understand”, “peace”, “security” and “protecting”. With a military group words such as “never relent”, “we must not waver” and “not on my watch” were common. For religious audiences, “I believe” resonated strongly. He quotes a superb Bushism which in this light suddenly begins to sound powerful:

Check out: A CTO Should Never Do This

“I know what I believe. I will continue to articulate what I believe and what I believe–I believe what I believe is right.”

Rhetoric indeed. I’ll be studying this book for months to come!

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