Thursday, December 10, 2009

COMMITTING A CLIENT FOR JOB

from Interior Design Practice and Office Management - 1 www.gautamshah.in

Nature of relationship: Relationship between a professional and a client develops very gradually. Client and professional usually have some degree of rapport, even before a job is discussed. A professional and client both wish to delay any discussion about fees, terms and conditions.

Delays in Formalization of Relationship:

Why a Client may wish to delay.
  • A Client is unsure, if at all professional is needed for the problem, and wether the professional is the right person for the job.
  • A Client as an official (of an organization), may not have the authorization to initiate the retention process for a professional.
  • A Client may not yet have, the permission, land ownership, funds, etc., to initiate the project.
  • A Client may shrewdly wish to negotiate with other professionals, or is trying to collect free ideas, and later carry on the job on own.

Why a Professional may wish to delay:

  • A Professional (at least well established ones), check out their client completely, before agreeing to take-on the project.
  • A Professional (fresher) is always eager to get-on with the job. Yet such professionals delay discussing the fees, terms and conditions because that can disturb the budding, but fragile relationship with the client.
  • A Professional may be waiting for the client to be firmly determined, so that fees and terms can be properly negotiated, and a firm commitment can be sought.

Formal Commitment (consent): The relationship between a client and professional, must develop formally, and as early as possible. For a professional, securing a formal commitment (consent) from a client, for a job, is one of the most difficult of all professional tasks. Consent commits a Client to pay the professional for the services to be rendered. With the consent a Professional becomes obligated to deliver the expected services.

Contracts and MoUs: Ideally two parties must initiate their relationship with a contract, according to the laws of the land. A Contract is a very formal expression of intent between two parties. It is too much to expect a contractual relationship in the initial stage of a job, when the client and the professional hardly know each other, or have yet fully formed a project. Just the same, even without a contract a relationship must be nurtured. Normally this is not very difficult, when both the parties are willing, enthusiastic and have a mutual faith. A memorandum of understandings (MoU) (for further details see chapter: 1.06 Contract), is a tool, frequently used as a step towards a full legal contract.

Cost of Inconstancy: For a professional a job begins with investments in labour, stationary, materials, and intellectual skills. Whereas a client remains worried, if the professional will at all deliver the services, of required quality, and in prescribed time.

When a Professional fails to deliver, (even if any advance sum, that may be fully refunded) a client's time and effort are wasted (both non calculable entities).

When a client refuses to acknowledge, or rejects the professional's contribution, all the labour, stationary and input of intellectual skills (only some of it is calculable) are lost.

An Informal Relationship can turn very vicious at any stage. When disputes arise either of the parties may refuse to even acknowledge the relationship between them. In such a situation the Professional will lose all that was spent in understanding, preliminary working, planning of the project. This could include not only labour, stationary but patent ideas. On the other hand, the Client will never recover the time wasted in searching, identifying and engaging the professional.

Circumstantial Evidences of Job Commitment: It is very natural for Clients and Professional to be extremely careful about things they say and do in the initial stages of a job. For a professional who is often operating without formal consent, securing a proof that his involvement has a tacit approval of the client, is very important. The evidence in such a case is usually circumstantial, and generally not tenable in a court of law, unless corroborated by other circumstantial or real evidences.

These are proofs that establish the time, location, context, contents, pre and post effects of a happening or an event (here the client's commitment). It is not full evidence, because it may be lacking in one or many of these factors. Circumstantial evidences are of many types:

1. Records and minutes of meetings with the client -location, time, context, witnesses, etc.

2. Record of telephone talks with the client,

3. Correspondence to the client,

4. Replies from a client for the queries by the professional,

5. Changes, doodles, and notes, etc. made on drawings and other documents by the client during meetings,

6. Original plans, sketches, writings, data, etc. as supplied by the client,

7. Keys, authorizations to visit the site.

Retainer Fee: The best commitment, next only to a legal contract, is payment of a Retainer fee. A retainer fee, however small, signifies establishment of a relationship, between a client and a professional (a retainer fee should not be confused with retention money: see chapter: 1.13 Tenders ). Ideally the amount of a retainer fee should be large enough to cover the labour, stationary, and the cost of patent (original or exclusive) ideas, required to generate a schematic design (or similar a stage, when first fees become due). The cost of patent or unique idea is collected at first go, because a unique idea or a concept once exposed to an outsider like a client loses its originality, and so the value.

A Retainer Fee is very different from Retention Money -which is part of job execution process, an amount retained from payments to the contractor to accumulate a guarantee amount so that a job will be completed as per the schedule and according to the specifications and other terms and conditions.

Formal relationships (e.g. a contract) usually have built-in Redressing Procedures with compensations, so that, in case of a failure no one is harmed. An Informal Relationship in total absence of corrective remedies can create lots of problems.

Different types of Clients and typical troubles: Until a professional secures formal consent, each class of client poses varied set of problems.

An Individual Client, as a single person may seem to be one of the simplest entities, but unpredictable whims cause unforeseen problems in the job.

A Specific Client, representing a formal or informally constituted group, with appropriate authorization, e.g., president of a club, behaves almost like an individual client, but with responsibility and sincerity.

Group Clients or Committees, being multifaceted are very difficult to handle. A professional must treat such members as if they are one-entity, any individual queries or suggestions must pass through their designated leader. All decisions and actions of such group clients are necessarily formal, so delays are inevitable. Nevertheless, once decisions are made, job commitment is not a major problem.
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