#154 How Your Legals Can Help You Get Paid
Imagine this scenario, a new client reaches out to you. They want a brand upgrade, including a new logo, colors, website, and copy. Excited about the opportunity, you dive into the project headfirst, only to realise later that their messaging and tone need work. Misaligned expectations and frustrations start to build up, leading to unpaid invoices and a strained client relationship.
Situations like this aren’t uncommon and can be incredibly stressful for you. Thankfully, there is a simple solution to this problem – harnessing the power of your legal documents. In today's episode, I’ll discuss how having proper legal documents can help you avoid these challenges and ensure you get paid on time, every time.
The first thing I want to touch on is the client user experience. From the first touchpoint to the offboarding process, it's crucial to display professionalism and establish clear expectations. By integrating your processes and systems with solid legals tailored to your business, you can avoid the scenario mentioned earlier and set yourself up for smooth payment transactions.
Managing client expectations is key to a successful partnership. When you have a discovery call with a potential client, it's important to follow up with a proposal or client engagement letter. These legal documents outline the services you will provide, the timeline, inclusions, and exclusions specific to their project. By setting clear expectations from the beginning, you minimise the chances of misunderstandings and scope creep.
Your legal documents should also include the agreed-upon fees, invoicing processes, and payment terms. Staged payments, deposits, and milestone payments can help you maintain a healthy cash flow throughout the project. When clients understand what they'll be paying and when, they're more likely to be prepared and happy to make their payments.
Despite your best efforts, there may be occasions when clients become unhappy and disputes arise. Having a dispute resolution process or framework in your legal documents can be invaluable in these situations. By clearly stating the steps to be taken in case of a dispute, you can swiftly address any issues that come up while preserving the relationship with your client.
Remember, the power of legal documents goes beyond protection. They set the stage for success with your clients, streamline your business operations, and help you achieve your goals. So, invest the time and effort in getting your legal frameworks right, and reap the rewards of happy clients and a thriving business.
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Tracey: [00:00:00] Imagine this scenario, a new client reaches out to you. They want a brand up level. They want the lot, a logo, new colours, website, new copy. They want a complete overhaul of their copy of their messaging. They are excited. This is their time. You have a chat with them. You feel aligned. You know you can help them and you're excited.
This is going to be so great. They want to jump straight in. They want it yesterday. They are busting to get started. You send some emails, and you dive in, but it doesn't last. You realize partway through that their messaging and their tone needs work.
You're not a copywriter. They don't have one. They thought copywriting was included in the rebrand. They thought you'd take care of it because as far as they're concerned, you're the expert. They're just not vibing with your concepts. You've put together new, beautiful branding concepts for them to have a look at. You've met the brief.
They don't like it. They keep making changes. They're not happy. You're not happy. You haven't even gotten to the wireframe stage of the work yet because you can't get sign-off for the branding. They're going back and forward. They're starting to drive you a little bit mad. They're feeling really frustrated.
They're feeling let down. They're not feeling the love. You've issued some invoices. Let's be honest, you've undercharged because you've done so much more work than you expected. They're not happy. They're not happy paying the invoices because they're not getting the results that they thought they'd be getting by now.
They thought this would be really streamlined and simple. You thought they had it together in terms of what they wanted and that they had clarity. Misaligned [00:02:00] expectations, big time. They haven't paid your last invoice. You don't want to do any more work. They're not happy with where they've gotten to, and you don't know where to go next.
You can see where this is going. In today's episode of the podcast, I'm going to talk to you about how your legals can help you avoid situations like that, and how they can set you up so you can get paid easily every time without the headaches. This is why clients come to me.
This is why clients reach out to me to ask me, what can you do to help me up level in my business? And what do I need to do legally? Let's dive in. First thing we want to focus on is the client user experience. We all have a variation of what we call it. I call it the client journey. Many of my clients call it the user experience or their client journey.
What we want to do here is make sure that we are exuding the level of professionalism that we take so much pride in, in our business, right from the very first touch point. So, whether that's your website or your socials through to their first contact with you, an email discovery call, all the way through to when they work for you to off boarding, start to finish.
So if you know your legals, you know that they will be able to support you from that very first touch point. All the way through to off boarding. You also know then that your processes and systems that surround these legals are vital. The two go hand in hand. There's just no sugarcoating it. Solid legals, properly tailored for your business, with processes and systems that work for your business.
The two have to integrate. This is the starting point to avoiding the scenario that I spoke about a moment ago. And to making sure that you get paid. The second is managing the client expectations. This is the big one right here. You might be wondering, Tracy, what does this have to do with legals and documents?
[00:04:00] It has everything to do with them. I am a firm believer that your legal documents are one of the most powerful tools in your business. If used properly. To set you up for success with your clients, to scale and elevate your business, to achieve growth, to get you the results that you want. Your legal documents are your foundation to making sure you get paid brilliant soul on fire work that you do in your business.
That's what this has got to do with the legals. So when you're starting out with a client and you have that discovery call, you want to make sure then that you can follow up with your proposal or your scope of work or your client engagement letter. Whatever it is that works for your business in your process and system, the next stage needs to be that legal document, that client service agreement phase.
So, if it's your proposal with your T's and C's, or if it's your scope of work, then followed by your client service agreement, whichever combination you use, Those legal documents need to be the next step because what they do is manage your client's expectations. It is here where you can set yourself up for success or equally set yourself up for failure, heartache, and unpaid invoices.
It is at this point because this is the point that your properly tailored legal documents are going to set out for your beautiful clients. What it is that you will be doing, what you won't be doing. So it's your inclusions and your exclusions. You've tailored your proposal, your legals, your client service agreement, whatever you call it.
You've tailored it to this client. To the work that they want to the services that they've asked you for. You outline it here for them. This is what I'm going to do for you. And this is when and how. So, you set out phases or milestones or stages or however you work. You set it all out. So, the [00:06:00] client knows what to expect.
So you're actually taking them on a journey just by them reading your legal documents. You're beautifully branded on point. Legal documents, they look like you, they sound like you, it is a continuation of the fabulous experience they've had so far in reaching out to you and talking to you now they've received your documents so they know what it is they're going to be paying, they know what they'll be paying for, they know when to expect certain milestones to be met or they know what you need from them so you can do your part.
They also know how to deal with variations because, hey, things change. Scope creep is real. Just about everybody listening to this will be nodding along. Yes, Tracy, it's real. We can deal with that in the legal documents because the clients are understanding what our processes are for variations.
Things change. I want to add something else on. I want to change this. What's the process? You set that out in the legal documents. The idea being nothing comes as a surprise to your client. When they're working with you, because it's all set out in your documents. And of course, your fees, your invoicing processes, your timeframes, your timelines, that's all set out in there too.
So every time your client receives an invoice, They're expecting it, and because you're doing what you say you're going to do in your documents, not only are they happy to pay it, they're delighted to pay it, because there is a continuation of this client journey throughout the process of working with you, and the expectations are set at the beginning in the legals.
This is powerful if you get it right. On the other hand, it's just as powerful if you get it wrong. I can guarantee you that if you have this process in place and you take the time to get your legal documents right, and then you execute those processes and systems every time, you will have significantly less issues with clients, [00:08:00] misaligned expectations, unpaid invoices, All the things significantly reduced because you've got this process, right?
I've seen it so many times, which is why I talk about this topic so much on this platform and over on Instagram, because I know the power. Of the legal documents at this point. Now, the third thing that we want to make sure our legal documents do is have a framework for dealing with unhappy clients or misaligned expectations.
Let's just say, despite your best intentions, and let's just say, despite all the conversations you've had and all the lovely emails you've sent, you still reach a point where a client becomes disgruntled because they've misunderstood something, or they thought you were going to do something else, or they thought that it'd be done sooner or whatever it might be.
If you have a dispute resolution process or a framework in your legals, which you absolutely should, that just says, I hope it doesn't happen, but if it has, this is what we'll do.
We're going to talk about it. We're going to be adults and we're going to have the conversation so that you can diffuse the situation and resolve it. Something like that, but in far more eloquent terms in your legals, if something does pop up. You can really swiftly dive in and deal with it the relationship with your client and whilst allowing you to continue on with the work that you were doing.
So you nip it in the bud, you nip it in the bud. Hey, you've got an issue. You thought we'd be doing this. No, no. Here it is. Let's have the conversation. You take them back to the agreement. You take them back to your last couple of emails. This is what we're doing. This is what we do next. See, it's outlined right here.
You've got a framework, so they don't have to go off and get all upset and talk to someone else. They come and talk to you, you've got it all outlined, and then guess what? Not only have you defused the situation, but you've resolved it. Because they can see it, in crystal clear terms, Oh, okay, this is the answer, or this is what it is.
This can be really powerful. But if you don't have a mechanism like that in your legals? Then [00:10:00] you're flying blind, really stabbing in the dark, trying to work out what's going on because they can be out there doing anything and who knows if they're going to want to terminate or not. Termination clauses is something else that you need to be really mindful of and intentional about when you're preparing your legals to set you up for success with your clients.
So when you've got all of these things drafted into your beautifully tailored and on brand legals, what it means is not only are you setting yourself up to meet. Your client's expectations, but you're setting yourself up to exceed those client expectations because you are so solid in your processes and systems that you know that you're going to deliver.
When you say you're going to deliver, you know, nothing's going to fall through the cracks. You've got peace of mind. That's a big win. But then each time that you issue your invoices for your progress payments or your milestones that you've achieved. the clients are delighted to pay, there's no delays, and you move on to the next stage or the next step in the process until completion.
But what this also means is that if you're really intentional about your payment terms, you’re not waiting until the end to issue your final invoice and hoping that you'll get paid. That is not the best way to do it. If you're really intentional and thoughtful in relation to the work that you're doing and when you're going to get paid, you've drafted into your term’s deposits and milestone payments, staged payments or timeframe payments so that there's only a small amount to be paid at the end.
And you've been able to sustain the business with really positive, smooth cashflow the whole way through. And at the end of this beautiful process, because it sounds good. I know it sounds good. It's lovely the way I describe this, and I know it's achievable. it's achievable for any business owner who wants to take the time to get their legal frameworks right, who wants to take the time to get their documents tailored for them, to make sure they're integrated seamlessly into their processes and systems, and to make sure that those processes and systems are how they operate.
It's how they do [00:12:00] business. So it's achievable if you do that and you get to the end of this beautiful project with this lovely client. And not only are they super happy to pay your final invoice, but there’ll be also a repeat client more than likely. They'll tell their friends and business colleagues, so they'll refer you work and it's that positive word of mouth that money can't buy.
That's going to help us achieve our goals of. Magnetizing more beautifully aligned clients of growing or scaling, whatever your goal is, you know, that you are working towards achieving it when you've got really happy clients, when everyone's paying on time and when you're loving what you do.
So that, my friends, is how you avoid ending up in the scenario that I described at the beginning, because that is oh so common. And if that hasn't been you at some point, I'll bet you know somebody who that has been. We can avoid that. We can set you up for success. With your beautiful clients. And we can make sure that you're getting paid on time along the way without the headaches.
It's the power of the legal documents. It's never ending. I love this topic so much because they, they serve so many purposes. I hope you've enjoyed this short and sharp episode. If you've got any business friends or colleagues that you think would also benefit from listening to this and getting a little insight on just how powerful these legal documents can be, please feel free to share.
I would be so grateful if you did, because that is how we'll get the podcast into the ears of even more business owners. As always, thanks for joining me. I'll catch you next week.
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