[consulting] Proper Collections Procedure

[Eric Goldhagen]

At 11:31 AM -0700 8/19/06, Henri Poole wrote:
>As professionals, we need
>to have methods for determining whether a client is low risk.

the issue is fact checking and how to determine credibility of the complaint.

>  > > Any potential client that approached us that hadn't settled up with
>>  > someone in our community would get a cold shoulder from us.
>>
>>  Personally, I like this idea, but it's not very professional :)
>
>I would argue that it is professional. There are very few professional
>organizations that knowingly take on risks. When I buy a book online, I
>can read reviews from peers. I am supportive of this level of
>transparency and community feedback and find it very important to make
>informed decisions.
>
>If a firm is having difficulty with Haggerty, whom I know and respect,
>it would make a big difference as to whether or not I would consider the
>risk worth the benefit.
>
>Perhaps this is just a personal value that I hold around transparency
>that has influenced our business practices but generally, I think that
>transparency is the best policy.

I see both sides of this.

On one hand, I think that this is a fine idea. Being able to act like 
a union or guild and isolate problem clients, and in effect have the 
power of a coalition of development firms when negotiating for 
payment seems great on its surface.

However, I see a dark side as well. To draw from a real life experience:

Years ago, we had a project that required working with an outside 
project manager geographically close to the client. This project 
manager was paid from our part of the contract and was in direct 
contact with the client and development team.

When the project was done, and we went to pay all the development 
contractors, we realized that there was over $20,000 in labor for 
out-of-scope work that the project manager instructed the developers 
to do.

When I contacted the client, they asked to see the change orders or 
anything in writing that made it clear that this work was beyond 
scope. The project manager had nothing, only a few phonecalls with no 
written summary where she claimed that the client's project manager 
agreed to cover the work as out of scope. The client's project 
manager of course had a different memory of the conversations.

After long and heated debate with the client, I got them to agree to 
pay for 50% of the out of scope labor. This still left me in a bad 
spot. Even if I paid myself 0 for the months of effort, after I paid 
the development team/contractors I had only 50% of what we had agreed 
to pay for project management.

I refused to pay out of my own pocket for the project manager that 
caused the problem to begin with. Paid myself nothing at all and gave 
the project manager all that was left after paying the dev team.

 From her perspective, I am a deadbeat client. From my perspective I 
was more generous than I should have been to someone that refused to 
follow any standard practice for project management and failed to get 
anything from the client in writing, despite being told that was 
important numerous times.

So, would she be allowed to list me on this private forum as a 
deadbeat and unfairly damage my reputation? Would I be given the 
chance to give my side of the story?

It would take a lot of effort for a list/group like this to be both 
fair and effective.

I'm not sure I think it is a bad idea, but I think that an official 
guild (for lack of a better term) with formal dispute resolution 
procedures would be necessary as a part of this. I'm not sure any of 
us have the time to do this right.

--Eric


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