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donnamcfarland
Community Member

Long term contract with mileposts?

I am a new freelancer and I am talking with a client about a project that would be 1-2 years in length. We want to do it as a fixed rate instead of hourly -- basically a set rate per page, and there will be 500+ pages. How should we structure the contract? It seems crazy to do 500+ milestones, or even 50 if we did a milestone for every 10 pages. Any suggestions?

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m_sharman
Community Member

You don't have to set up all the milestones right now, in fact I would recommend against it.

 

Just look at the work deliverables for the next month and set up milestones for that time period. You also need to see what ratio of fee/work product feels right. I wouldn't commit to a fixed milestone rate until you deliver some work.

 

The client can add milestones as needed, or you can propose them.

 

 

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prestonhunter
Community Member

If I am a freelancer... I certainly have no interest in getting paid once every six months.

 

Or once a month.

 

If I'm doing an hourly contract, I get paid EVERY WEEK.

 

So if I am going to agree to a fixed-price contract, I want to get paid at least that frequently.

 

I have no problem if there are 50 milestones. Or 500 milestones. The client isn't paying a separate fee for each milestone.

 

If the client does not want to use an hourly contract, then I will tell the client what milestones to set.

 

It is NOT crazy to get paid regularly for the work that I do. It is potentially dangerous to me to do a lot of work without getting paid.

m_sharman
Community Member

You don't have to set up all the milestones right now, in fact I would recommend against it.

 

Just look at the work deliverables for the next month and set up milestones for that time period. You also need to see what ratio of fee/work product feels right. I wouldn't commit to a fixed milestone rate until you deliver some work.

 

The client can add milestones as needed, or you can propose them.

 

 

I second Miriam:  set up whatever the two of you can agree upon.  If that means every six months, okay.  If it means weekly, that's fine, too, but setting them up as you go is not a bad idea.  If I were in your situation, I would probably set up the first one at about two weeks, discuss with the client how much work you would deliver at the end of it, and then go from there.  So if you think you can get, say, 20 pages in two weeks, set that up and see what happens.  At the end, re-evaluate:  can you deliver more in that time frame?  Fewer, because that was too much?  Then set the price and the next milestone accordingly.

I wouldn't do a 2-year job as a single fixed price contract unless I had complete faith in the client or was not highly committed to staying with Upwork. 

 

There are some circumstances--such as a credit card chargeback--in which Upwork could insist that you repay previous earnings on the contract, including sums that you've already withdrawn, on pain of being permanently suspended from Upwork.

 

That said, I'm not sure how much extra security you would get by splitting the work into multiple contracts. Perhaps Petra can say.

re: "I'm not sure how much extra security you would get by splitting the work into multiple contracts"

 

I don't know if one gets added "security" if you are referring to any sort of immunity from chargebacks or refund requests...


But when I have a client close a contract, then the feedback is rendered, and the client no longer has any "hold" over me in terms of being able to give me bad feedback.

 

If you look at my work history, you will see that I sometimes do many separate fixed-price contracts for a single project. Even twenty or more contracts. Sometimes I will do more than one fixed-price contract in a single day for the same client.

 

This means I am working on very SPECIFIC tasks. They are very defined. Such practices help eliminate scope creep or problems in getting paid for my work.


Preston H wrote:

re: "I'm not sure how much extra security you would get by splitting the work into multiple contracts"

 

I don't know if one gets added "security" if you are referring to any sort of immunity from chargebacks or refund requests...


But when I have a client close a contract, then the feedback is rendered, and the client no longer has any "hold" over me in terms of being able to give me bad feedback.

 

If you look at my work history, you will see that I sometimes do many separate fixed-price contracts for a single project. Even twenty or more contracts. Sometimes I will do more than one fixed-price contract in a single day for the same client.

 

This means I am working on very SPECIFIC tasks. They are very defined. Such practices help eliminate scope creep or problems in getting paid for my work.


I can see that there are various advantages in breaking work down into smaller, more specific contracts. But since getting some push-back from one good client, who didn't want to start a new contract, I've been more reluctant to  suggest it.

 

These days most of my work is hourly and ongoing, with clients returning for updates and added features, so I leave the contracts open indefinitely. On a fixed price contract I would be more cautious, but even then I don't break it down as much as you. I've just had a regular fixed-price client ask for one added feature immediately after another, so I'm going to add a second milestone to the contract. If nothing else, I want to try out the option for freelancers to add milestones, as I haven't used that yet.


Richard W wrote:

 

That said, I'm not sure how much extra security you would get by splitting the work into multiple contracts. Perhaps Petra can say.


You could not have a 2 year (or a one year, or a 6 month, or a 3 month + 1 day) contract with funding in place anyway.

 

The longest funding can be in place without being released etc. is 90 days, then the contract is closed by Upwork and the funds returned to the client..

 

It is also ridiculous to expect a client to tie up capital for a whole project for 2 years, or a freelancer to wait that long before seeing any money.

Thanks, that's good to know. It looks like we're going to do it with milestones that we add as we go along. Am I right that each milestone has to be pre-funded? 

re: "Am I right that each milestone has to be pre-funded?"

 

Yes.

As freelancers, we work on tasks that are fully funded in escrow.

No escrow funding? We don't start on the task.

 

If a freelancer is going to do the work PRIOR to an escrow payment being funded... then she may as well just get paid the freelancer using the "Pay Bonus" tool. Which IS an allowable choice. But such payments are done purely on the honor system, with no protection from Upwork.


Preston H wrote:

re: "Am I right that each milestone has to be pre-funded?"

 

Yes.

As freelancers, we work on tasks that are fully funded in escrow.

No escrow funding? We don't start on the task.

 

If a freelancer is going to do the work PRIOR to an escrow payment being funded... then she may as well just get paid the freelancer using the "Pay Bonus" tool. Which IS an allowable choice. But such payments are done purely on the honor system, with no protection from Upwork.


Preston, I think she might be asking if a client HAS to fund milestones....meaning does Upwork make it so that it's impossible for a milestone to be open for the freelancer to work on before its funded. Based on your answer, it seems the answer is "No???" Clients are not obligated to fund milestones. The onus is on the freelancer to check to make sure its funded before they can begin. Is that right? I honestly don't know, I don't do very many fixed-rate contracts and the ones I have done the milestones were always pre-funded. 


Petra R wrote:

Richard W wrote:

 

That said, I'm not sure how much extra security you would get by splitting the work into multiple contracts. Perhaps Petra can say.


You could not have a 2 year (or a one year, or a 6 month, or a 3 month + 1 day) contract with funding in place anyway.

 

The longest funding can be in place without being released etc. is 90 days, then the contract is closed by Upwork and the funds returned to the client..

 

It is also ridiculous to expect a client to tie up capital for a whole project for 2 years, or a freelancer to wait that long before seeing any money.


To clarify, I didn't mean a 2-year contract that was fully funded in advance. I meant a 2-year contact where new milestones are repeatedly added, funded and released,  one at a time. That seems to be what people are suggesting to Donna. And it seems risky to me.


Richard W wrote:


To clarify, I didn't mean a 2-year contract that was fully funded in advance. I meant a 2-year contact where new milestones are repeatedly added, funded and released,  one at a time. That seems to be what people are suggesting to Donna. And it seems risky to me.


I have several such contracts and I was directly responding to "I'm not sure how much extra security you would get by splitting the work into multiple contracts."

 

WOW - actually now I see what you actually said lol.. "you would get by splitting the work into multiple CONTRACTS" I misread your post, thinking you said "... by splitting the work into multiple milestones"

 

You gain quite a bit of security by cutting it up into several contracts. As clients can dispute an entire contract (!) within 30 days of having funded the latest milestone, cutting two years of work into 12 contracts of 2 months limits any dispute to 2 months of work (and money), not a year's worth or 18 months worth or, god forbid, 2 years worth.

 

 


Petra R wrote:

You gain quite a bit of security by cutting it up into several contracts. As clients can dispute an entire contract (!) within 30 days of having funded the latest milestone, cutting two years of work into 12 contracts of 2 months limits any dispute to 2 months of work (and money), not a year's worth or 18 months worth or, god forbid, 2 years worth.

 


That's what I was thinking, but I wasn't sure. Thanks for confirming.

Thank you. So I've been communicating with the client and there is a logical way to break the work into multiple contracts which each contain milestones. However, some of the contracts could run longer than 90 days. Do I need to keep each contract length under 90 days?

re: "However, some of the contracts could run longer than 90 days. Do I need to keep each contract length under 90 days?"

 

No.

 

Contracts can have an unlimited length.

 

The 90-day time limit refers to how long an escrow payment can remain in place without being released to the freelancer. Escrow is not a bank account. If the money stays there beyond that 90-day period, then the money is automatically refunded to the client.

 

read:

Contracts Gone Dormant

 

Screen Shot 2019-10-04 at 9.28.35 AM.png

OK, that's not going to be a problem. Thank you.


Preston H wrote:

re: "However, some of the contracts could run longer than 90 days. Do I need to keep each contract length under 90 days?"

 

No.

 

Contracts can have an unlimited length.

 

The 90-day time limit refers to how long an escrow payment can remain in place without being released to the freelancer. Escrow is not a bank account. If the money stays there beyond that 90-day period, then the money is automatically refunded to the client.

 

read:

Contracts Gone Dormant

 

Screen Shot 2019-10-04 at 9.28.35 AM.png


________________________________

If a milestone has been funded, it does not automatically get refunded to the client after 90 days, the freelancer has to agree to it. It happened to me with one of my clients. 

dsmgdesign
Community Member

Hi, Donna,

 

Wow, great contract. Congrats! 

 

Please tell me you are going to do this in multiple contracts instead of one contract with a bunch of milestones? There are so many advantages to you to doing multiple contracts. 

 

In addition to the benefits explained here, once you get a JSS (assuming you do a great job and that JSS is above 90%) you'll get one Top Rated perk in particular that you really want to have in case you need it. That's the feedback removal perk. Once you use it, 3 months and 10 new contracts must be completed (and you must maintain top rated status) before you can use it again. So, as you can see if you seperate it into many, many contracts, you would be able to use your perk more often on other contracts that may not go so well. 

 

Congrats again! 

 

 

tlsanders
Community Member

Can you be more specific about the project type? 500 one-page blog posts is a very, very different type of project with very different structuring than, say, a 500-page book 

Well, thank you everybody. Just got a message from the client and she is backing out, so I guess it's all moot. But you have all been very helpful!

It was typesetting pages of music. It would have been a great gig... Client decided she couldn't afford it and she wanted to do all or nothing.

re: “she wanted to do all or nothing”

 

That is a very bad idea.

 

This sort of “all or nothing” thinking is very bad for freelancers, and also clients, when the project is quite large.

 

I have seen clients dramatically undermine their own projects because they were unwilling to use high-quality work done as part of an hourly contract... because the last 5 or 10 percent of a project wasn’t completed yet. They wanted to get a refund for the entire project and start over. Such a decision obviously ended badly for them because Upwork doesn’t grant hourly contract refunds on that basis.

 

This all-or-nothing thinking is also bad with fixed-price contracts. Imagine a fixed-price contract in which a freelancer has done the typesetting for 490 pages of music (out of a total of 500)... and then the client decides she wants to cancel the whole thing and pay nothing. Clearly that doesn’t make sense.

 

You are better off having never started a contract with a client who thinks like that.


Preston H wrote:

re: “she wanted to do all or nothing”

 

That is a very bad idea.

 

This sort of “all or nothing” thinking is very bad for freelancers, and also clients, when the project is quite large.


You misunderstood.

 

The client decided that they can not afford to do the whole project and doing only part of the project (what they could afford) wasn't for them, because they wanted either all of it (which they could not afford) or none.

 

So they abandoned the project (or went for someone cheaper - also possible.)

 

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