Beyond pricing: the fine print

Earlier this week, I wrote about pricing professional services. A slippery topic, full of ifs and buts (just like geoscience!). And it was only half the story, because before commencing on a piece of work, you and your client have to agree on a lot of things besides price. To avoid confusion later, it's worth getting those things straight before you start.

Here are most of the things we try to cover in every agreement:

• Don't include expenses in your professional fees. Extras like travel expenses should always be separate. Be clear about your policies (for example, if I'm traveling more than 8 hours, I'm booking business class tickets). Do your client a favour by estimating the expenses for them, but pad everything a bit so you don't surprise them later with more than the estimate. Promise to provide receipts for everything.
• You should charge for your travel time. I usually charge this at my full day rate, but sometimes less if I know I can be somewhat productive on the journey. I've read of consultants not charging if they're traveling at the weekend, because it's not a normal work day... To me this is backwards: if I'm traveling for work at the weekend, someone better be paying for my time!
• Know your sales tax situation. I recommend getting professional help from a chartered accountant on this. Do not assume the client will know: they won't, and it's not their responsibility to, it's yours. I'm afraid you will be reading tax treaties and filling out some pretty gross forms.
• Charge more for travel outside your 'comfort zone'. For example, I add at least 20% outside the US & Canada or Western Europe, depending on the place. Travel is exhausting, you're away from home, you need vaccinations, you need visas, everything is unfamiliar. All good fun when you're on holiday, but stressful, expensive, and time-consuming when you're trying to be an awesome professional.
• Get paid as soon as possible. I've never done it, but I know people who charge a percentage up front. For longer jobs, specify that you wish to charge partial invoices, perhaps monthly. Ask for Net 15 terms (i.e. they'll have 15 days to pay your invoices), but settle for Net 30. Longer than this seems unfair to me. Add late fees and interest to overdue accounts, and reissue the invoice at every due date.
• Make it easy for people to pay you. Be specific about how to pay, and give people options. It's safe to give them your bank account details (I put them on my invoices, along with foreign banking details like SWIFT and IBAN codes), and electronic funds transfer is the best way to get paid. Put your tax number on your invoices, some clients need it. I use Stripe for accepting credit cards, but bear in mind that you probably don't want to accept credit cards over about $10k.
• Get good at currencies. Remember to be very specific about currencies whenever you talk money. Use ISO4217. If you can, make things simple for people; I charge USD to US customers. I have a USD account and use a foreign exchange service (Firma) for FX. I spend a lot of money in the US too, so I also have a USD credit card, paid in USD.
• Do the work you want to do, the way you want to do it. This is kind of the point of 'being your own boss', right? Of course, you have to be reasonable, and compromise when necessary (OK, if every contract is a compromise, maybe you are too particular!). Talk to your client! It's OK to negotiate, ask questions, and so on. Every time I've asked for contracts or terms to be changed, it has at least been entertained, and it usually works out.

It can be awkward raising all this; you probably don't want to dump it all on someone at your first meeting. We usually put all the gory details into as short and informal a document as we can (usually part of the project description or 'scope of work', or in a 'letter of understanding'), show it to the client, answer their questions about it, and eventually reference it in the contract. Most contracts allow for some document that describes the specific conditions of the contract, but it's worth checking that those conditions don't contradict the contract. If they do, ask for the contract to be changed to reflect whatever you agree with the client.

If you're just starting out on the professional services road, I hope this is all of some help to you. And I hope it's not too daunting. 

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“Fine Print” by Damian Gadal is licensed under CC BY 2.0

Your next employment contract

You own your brain. The hackathon we're hosting has reminded me of this. 

More than one person has expressed difficulty with reconciling their wish to participate in the event with their employment contract, which probably says something like this:

Everything you do belongs to us.

Your family photos belong to you

Yesterday I read something about US government intellectual property. I knew that most government content is free of copyright, and what I read confirmed it. It's a sort of mirror image of the situation we have in industry (this is from ACQuipedia): 

Works created by Federal employees in the course of their official duties are automatically in the public domain and may not be copyrighted by anyone.

Interestingly, works not created in the course of their duties are their copyright as normal. So a soldier's photographs on her cellphone are her intellectual property, even if they were taken on duty (provided she's not a photographer).

Our community should stand up for something resembling this same rule in the corporate environment. Of course works created in the course of your duties as an employed geoscientist or engineer belong to your employer. But clearly your family vacation photographs do not. And just as clearly, your edits to Wikipedia articles do not (unless that's your job, you lucky thing). And neither, with certain provisos, do your contributions to a hackathon.

What provisos? Well, there are other, equally important clauses about confidentiality in your contract. You may not legally disclose the company's proprietary intellectual property. So you can't show up at a hackathon and code up your company's latest migration algorithm. But coding up a new, previously unknown algorithm would be ethically OK, but if you're a geophysical programmer I can see the potential conflict there — it's a judgment call. I hope your company trusts you to make a fair decision. If the algorithm turns out to be awesome, and had 3 collaborators from different companies, then I say they should all be glad you got together to invent it. Innovation is not a zero-sum game.

Shop rights

It turns out that there's a common law provision for the ownership of your brain. So-called shop rights are generally upheld by courts, at least in the US. According to an excellent guide to IP from the IEEE, they go like this (there are variants):

1. confidential information and inventions or other creations made during the course of employment as a normal part of job duties belong to the employer
2. inventions made by the employee off the job, using the employee's own time and materials, will generally belong to the employee (absent fraud, related inplant work of which the employee might be aware, or other special circumstances); and
3. inventions not related to work duties, but created with some nontrivial use of the employer's time, funds or materials still belong to the employee, but the employer has limited rights to exploit the invention without payment of royalties or other compensation.

Awesome! This is perfectly sensible. Unfortunately, employers can write almost anything they like in their contracts, and it sounds to me like clauses that trample on these rights are fairly common. And they will continue to be common until people start refusing to sign contracts that contain them.

Demand change

In light of all this, here are 3 things to demand (yes, demand — you do actually have some bargaining power when someone tries to hire you) in your next employment contract:

• At the very least, clauses limiting your shop rights should be removed. In their absence, conflicts will be resolved by the application of common law.
• You may contribute to Wikipedia, SEG Wiki, PetroWiki, SubSurfWiki, and other open content projects.
• You may contribute to OpendTect, Madagascar, and other open source software projects.
• You may contribute to unstructured events, including but not limited to unconferences, hackathons, and idea jams. 

Bottom line: your employer owns some of your creations, specifically the ones you make for them, at work, with their data, their tools, their employees, and their ideas. But you own the rest, and you emphatically own your creativity.

Changing how we are employed is entirely up to us. Legal professionals will pin us down to the bare minimum of openness and freedom otherwise — it's their job. So push back, ask for change, and retain your brain.