[consulting] Proper Collections Procedure

[Chris Johnson]

Michael Haggerty wrote:

> I am not one to name names and think a blacklist could put someone at risk
> of libel. But I can see the use for a developer's legal fund and would be

Let me just point out that it all depends on what method and format such a 
"blacklist" takes.  As a small business owner, I definitely would find high 
value in knowing which other potential clients have been nightmares for others 
(not necessarily my competition, and maybe including my current other clients 
and/or vendors, based on the FOAF idea).

I do believe the legal risk of libel can be well mitigated because this kind 
of service is commonplace in other industries.  There are essentially 3 credit 
reporting companies which virtually every creditor uses before extending 
credit.  There are similar repositories of risk data for potential renters 
available for landlords.  Likewise for life, health and auto insurance 
companies.  Even corporations get rated by outside companies based on behavior 
by folks like A.M. Best for selling bonds or otherwise seeking investment.

As long as the data collected is essentially quantitative and objective, there 
is little risk of libel (IANAL).  If the client did not pay within 30 days, 
for example, on bills sent every month for 18 months, then that is a simple 
objective fact and hard to refute.  And just as with the credit bureaus, the 
businesses so rated are provided with a formal means to correct their records.

Alternatively, there is always the opportunity to develop an open source 
independent developers association of sorts which would facilitate getting to 
know (socially) your competition was and how to contact them for the more 
informal, off the record sorts of inquiries, e.g. at a trade meeting or social 
hour, "Hey Bill, we are thinking of working with ABC Co.  What were your 
experiences?"  "Don't do it, Carol.  They were impossible to work with and 
getting paid was a hassle."  Carol rethinks working with ABC Co. or does so 
only with great caution.

There's no reason why bad actors (the ABC Co.s out there) should get off 
scot-free and go "unpunished" by the market place -- especially to the 
detriment of the livelihoods of independent consultants.

One thing I learned running an ISP business:  some customers are not worth 
having, even when they pay.  They cost far more to have than to get rid of.

Although one customer complaining is usually said to cost 4 to 7 good 
customers complimenting in the world of Good Will and customer service, some 
customers are so troublesome, it's cheaper to ask them to leave and have them 
spread Bad Will, than try to keep them happy.  Especially if you have other 
customers who truly "love" your service and will speak well of your company. 
I've actually had good customers jump into arguments with bad customers to 
tell the bad customers (and innocent bystanders) how wrong the bad customers 
were.  It's nice when your customers defend your reputation for you.