Recession ethics for freelancers

November 2nd, 2009

Times is tough. Even if you’re drowning in work, chances are you’ve had at least one steady client cut your rates this year, or worse, cut you off altogether.

Yeah, clients come and go during even the most financially prosperous of times. But in a year when work is harder to come by and the competition stiffer, each little setback can feel like a full-on body blow.

Last week, the Associated Press reported that an Illinois man pocketed more than $470,000 in paychecks from a company he never worked for over the course of four-and-a-half years.

That got me wondering: If a freelance client overpaid you this year, what would you do? Before you say, “Return the money, of course,” really think about it. What if you were about to default on your mortgage? Would you still give the money back?

In an older post, I talked about how years ago a client paid me twice the amount I’d invoiced for. I knew it wasn’t a bonus; it was clear the company had made a mistake. And while I desperately needed money then, I couldn’t get behind lying and keeping the cash. (Admittedly, it wasn’t just integrity at the wheel. Fear of being found out and losing my most lucrative gig helped drive home the decision to refund the money.)

The client in question was an independent book publisher, and the overpayment was just by $1,000 or so. But if a deep-pocketed Fortune 500 overpaid me a piddly amount, I’d return the money just the same. 

For freelancers, reputation is everything. You might be able to recover from a botched deadline (just ask my editors). But recovery from blatant disregard for business ethics? Doubtful.

What do you think? Have you ever had to return a stray payment to a client who made an accounting mistake? Or do you fall in the ”Pocket it and play dumb if they call you on it” camp? (No judgment; just curious.)

Related assignments I did on the topic this year:

Entry Filed under: This freelance life

8 Comments Add your own

  • 1. Dava Stewart  |  November 2nd, 2009 at 2:22 pm

    I have even worried about accepting tips from smaller clients. I worry about integrity, of course, but also whether or not they can afford to be generous.

    I could never just pocket an over-payment, even if I was defaulting on my mortgage. I’m almost pathalogically honest, which can be a bad thing sometimes.

  • 2. Liz  |  November 2nd, 2009 at 5:59 pm

    I had a client earlier this year who hired me to do something and I estimated them it would take me X amount of hours and they paid their deposit. Well it turns out I was able to solve what they needed in about 2/3 the time I thought I would need and I opted to not charge them the full remaining amount and let them know I came in under the budget quoted, so I was cutting them a break. They’ve become a valued client and Ive gotten a number of jobs with them over this year.. i think it was the right move.

  • 3. Ax  |  November 2nd, 2009 at 6:51 pm

    I just had a client ask for a 30% rate-break today: we met in the middle. I felt vaguely absurd, hassling about $25 difference when people are losing homes, eating government cheese and declaring bankruptcy because of medical bills. But at the same time, I need to make rent here and finance the work I love. And I’m sure the client would employ someone cheaper who could do an equally decent job (the company’s tried). Thus I stuck to my guns pretty fiercely…

    So, media pros out there: coraggio! Don’t sell yourself short, just because the industry’s turbulent. I know plenty of people, myself included, still picking up fresh, good gigs. The hustle and negotiations take a bit more time, but a living wage is still out there…

    In answer to your larger question, Ms G, I agree that a writer’s reputation is her most valuable currency. I would hand back an overpayment, just as I once turned in a five-pound ($10) note I found in a British pub. The very next week, I lost 20 quid ($40) and someone returned it – or else the bartender recognized me and took pity. Either way, it was a quick study in Good Karma…

  • 4. Michelle Goodman  |  November 3rd, 2009 at 2:02 pm

    @dava, I wish my clients gave me tips. ;) my sources try to, but that’s a journalism no-no, so i must decline.

    @liz, i think you did the right thing. builds good will. i’ve done that before, in the early stages of a new client relationship.

    @ax, i’ve so been there re the oddball negotiations. even more bizarre when the the client haggling over $25 is a huge corp that has far more money than we’ll ever see. i agree re not selling oneself short just because the economy’s crap and work is harder to come by. i know many freelance writers raking in the assignments right now. also, i love your karmic payback story.

  • 5. Penny Feigel, IAC-EZ  |  November 4th, 2009 at 7:59 pm

    “But recovery from blatant disregard for business ethics? Doubtful.”

    That is such a GREAT statement! Regardless of the economics. As a freelancer, employee, or just in general – people will remember if they feel you have been dishonest or unethical in any way.

  • 6. Kingsley Tagbo  |  December 2nd, 2009 at 3:20 pm

    To stay in business for the long-term, you have to have a good relationship with your clients. You don’t keep money given to you by mistake by people you have a “relationship” with.

  • 7. Melissa Ek  |  December 20th, 2009 at 4:18 pm

    I would return the money too, but just like with you, it would be first out of fear of being caught and losing my gig, and second out of ethics. I know that sounds bad….but sometimes, don’t you feel like you DESERVE that little bit extra?

    And, conversely, if the client underpaid me, I’d be sure to mention it as well. :)

  • 8. Bill  |  February 20th, 2010 at 7:41 am

    Hi – ethics seem in short supply in the business world, my favorite gripe is clients who ‘forget’ to pay you until you send them reminders. Maybe they are hoping you got run over by a bus or something so they can keep the cash. Congratulations on your success by the way, I see you are mentioned on the front page of Yahoo today so you may get a spike in traffic ! Also why no ads on your site ?

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Hi, my name's Michelle Goodman and I've been freelancing since 1992. I'm author of My So-Called Freelance Life and The Anti 9-to-5 Guide. Read my full bio here.

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