A while back, at the very end of the dot-com blaze out, I was caught in a precarious situation. I had been hired to structure a Web site, work with a designer on site design, and write all the copy for what was to be a fairly deep site. A few weeks into the project, the client got cold feet and decided to shut down operations. In his shoes, I would have done the same thing.
Here’s the dilemma: I had been paid the customary one third of my fee up front, with the second third due upon deliverables of a prototype site, and the final third due upon go live.
But I had already invested a lot of time and energy — more than the one-third payment I had received — on conceptualization, research, meetings, and draft material. These are not exactly the most tangible of deliverables, but most creative professionals agree that the development stage is the most labor intensive.
Because the project was large, in the interim I had turned down a few smaller projects that I would have accepted otherwise because I wanted to give my full attention to this client.
Here’s the kicker: Looking to recoup what he could from his failed venture, the client called to ask for the return of half the compensation he had already paid me. “After all,” he said, “you haven’t done that much work so far.”
I wasn’t going to return anything. In fact, I felt I was due additional compensation, considering the time and energy I had expended.
Not knowing how to respond, I asked for a little time to think. I pulled out the client’s contract, which, for better or worse, I had provided. It was a patchwork affair; cut and pasted from several contracts I had come across over the years. I had only a vague recollection of how it covered kill fees.
The Killing Field
What a term, kill fee. It sounds like rightful compensation for putting difficult clients out of their misery, but it is designed to address two unfortunate scenarios: when a project is cancelled midstream, like this Web job; or when work is rejected by the client.
No one, understandably, likes to discuss or even acknowledge either scenario at the start of a project when optimism abounds. In my case, I hadn’t given the possibility a second thought; even though I had had the nagging feeling that this project was a wounded bird from the start.
In short, my contract said that I was due a kill fee of 50 percent due within 30 days of notification if for any reason the job was canceled or postponed before the final stage, and 100 percent of the total fee if the job has been completed but not used. I surfed around Web sites catering to writers and graphic artists to see if my contract was out of line. I found that kill fees ranged from 20 to 100 percent, depending on the stage of completion at the time the project is killed. My contractual language, then, was certainly in the ballpark.
Plus, in this instance, the 50-percent fee seemed pretty fair to me, though there have been other instances of cancelled projects where this amount would have been overkill. I felt lucky for having cut and pasted such valuable language into the contract way back when.
Contractually, then, the client owed me money — 17 percent, to be exact, of the full fee. My first impulse was to pick up the phone and politely but firmly request payment.
Begging for Mercy
But then I started thinking; my client faced a mountain of bills, what practical good would it do to ask for more money? The request would simply lead to animosity and kill any possibility of working with this client again (maybe that’s why they called it a "kill" fee.). Every business endures losses, be it spoilage, piracy, theft, returns, or non-payment. I’d have to chalk up my 17 percent as a business loss — a cost of doing business.
There was no way I going to return any money, nor did I want to walk away from the relationship with bitter feelings.
I called up the client and told him (paraphrased eloquently here): “I know it seems like you haven’t seen a lot of work from my end, but I invite you to ask around and I think you’ll find that much of the work of building a Web site is in the conceptual and research phases. Plus we met several times, and I met individually with the designer on several occasions. By my estimate I was about halfway finished with the project. Now, our agreement states that money is still owed to me, and I could pursue it legally, but considering the circumstances, I’m happy to leave things as they are, with my keeping the compensation already paid out and our relationship intact.”
The client quickly agreed and we parted amicably. A win-win or at least a draw.
Burying the Concept
I pulled up the electronic version of my contract and made a few key changes. First, I took out the term kill fee and substituted the phrase cancellation or rejection fee. Secondly, I took the advice of Cameron S. Foote, author of “The Business Side of Creativity,” and inserted language that read:
"In the event of your cancellation of this project, or any delay of more than two months, we will invoice you for the greater of either: 1) all work completed up to the date of written notification, including expenses; or 2) the amount of any advance deposit made for this project. All work will remain our property, but will be available if the project should be resumed at a later time."
This language gives me clearly states my right to keep the original deposit, period. It also gives me option of charging more if appropriate. Following my cancellation experience, I also vowed at the start of every relationship to mention, casually at least, that much of the upfront work is invisible but is just as billable as tangible deliverables. This way, if there is a cancellation or rejection, the client has been forewarned of billables to come.
The episode has led me to believe that kill fees are outdated. As written in most contracts, kill fees are arbitrary and therefore ultimately unfair to either the client or the creative professional. Plus the term is so darn unfriendly. Let’s kill the kill fee for the betterment of all.
Read more by Eric J. Adams.
This article was last modified on January 6, 2023
This article was first published on July 1, 2002
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Hopefully there are very few industries like ours in terms of payment or lack of payment.
If you go to the doctor, and don’t get well, you don’t pay the doctor?
If you go to a restaurant, and don’t enjoy your meal, you don’t pay the check?
If you hire a lawyer, and go to jail anyway, your don’t pay your legal fees?
Yet, I have come across people (if you don’t pay – you’re not a client) who need a logo, know exactly what they want, and just don’t quite like what is presented. Most people even think that because the logo designs were done for them, they own all the comps. No money changes hands, but the comps are kept and shown to the next designer-victim as an example of what this person does and does not like. When a logo is finally approved the final designer will receive a pitiful sum.
I notice that this article is full of rationalization that favors your “client’s” point of view. This type of thinking seems to be characteristic of graphics professionals. I do it too, but it is a very bad habit. If we don’t value our skills, experience, equipment and overhead and insist on being paid, no one will do it for us.
Each client is hiring you for your experience. Make sure they can pay for it before you accept the job.