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Subject:Re: "Kill" fees in contracts? From:TALKLIST -at- AOL -dot- COM Date:Thu, 20 Jun 1996 12:44:45 -0400
Gail asks about kill fees:
In our consulting practice, we require a certain percentage of the entire fee
in advance with other percentages paid against deliverables, specifically a
40/30/30 split. Frankly, we go with the 40/30/30 concept because it
represents a more positive cash flow for us.This arrangement has never been
questioned by any of our clients. If I were asked, the "pitch" to our clients
would be that the advance payment is to reserve our time and give us a cash
flow while we work. If your client doesn't understand your need for cash
flow, then you're dealing at the wrong level. The 40/30/30 concept gives the
client a feeling of control because they can refuse payment if you don't meet
the predefined deliverables. Obviously, you must take *great* care and work
with your client in the definition of deliverables.
Remember, Gail, you are a *highly skilled* consultant who is doing work that
your client cannot (or chooses not to) do for themselves. If you receive 40%
in advance, the client will think twice about dumping the project. If you've
done all the work to arrive at a mutually acceptable project plan and they
cancel the project before you get your advance, that's life in the fast lane
and there's nothing you can do about it except stay in touch and hope that
your professionalism will get you another shot at a later date or a chance at
a new project.
I would not refer to the advance payment as a "kill" fee. That's a common
term in the publishing industry but not in corporate America.
Psychologically, it has very negative overtones that make it very different
from an "advance."
Good luck. As those of us who are independent consultants say, "Life as a
consultant is never boring ... frequently terrifying ... but *never* boring."
Please send personal replies to EmpressGJB -at- aol -dot- com so they don't get lost in
my mailing list mail. Thanks.
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