Wednesday, August 25, 2004

Contract Negotiation - Points to Ponder

It is inevitable that we all get phone calls to go work here there and everywhere. That's one of the reasons we are sitting behind the desk working where we are at the moment. At some given point during your call, the issue of compensation rates will come up.

You need to negotiate! Negotiation is a fine art. It is something that most technical people cannot do for some odd reason or another. What you negotiate upfront determines what you will make at either a salary level, or a consultant hourly rate. If you are not careful, it could very well box you in to a rate lower than you are worth, so please take the time to read this.

Firms ALWAYS ask you what rate you are looking for or what rate you are willing to take. NEVER NEVER give your rate up. Make the firm give you a rate first. The first one to speak always loses.


If the firm is unable to provide you with a rate, ask them for a rate range for the position. Many times they will come back with the range. If they have other consultants already at this client, ask them for the range that they pay the existing contractors.

NOTE: Be aware that rates can go up or down drastically based on need, skillset, ability to communicate and most important, desperation on either side, yours or theirs.

Ask if the firm is the PRIME contractor to the customer. If they do not understand this term, ask them if they are billing the end client directly. If they do not know this, or they are evasive to this question, the answer is NO. This will cut into your pay.

The lower the firm in the food chain that you are dealing with, the less the rate will be in your pocket. Remember, it is important to establish if the firm you are talking to is the PRIME or main vendor for the account.

If not, that means you are going through a chain of consulting firms to get to the end client. Your pay will get cut each time a different company gets involved. This also means, that each firm will wait for their pay until the last firm, who will in turn, pay you. YOU ARE ALWAYS GOING TO BE LAST.

If you are not dealing with the prime vendor, than it is advisable to cautiously approach the contract while you determine how quickly you will get paid.

Always look for net 15. This means that the company you are dealing with has 15 days after you submit your invoice to have the check back in your hand.

The more established or reputable firms will agree to this type of payment arrangement. Other firms may be established but are unable or unwilling to take the risk in you. Afterall, you are unknown to them, may perform poorly or blemish their image.

Be careful and read your contract before you sign it to make sure that these checks are not advances, but actual payments based on invoices.

My experience has been that this is always a negotiable point with a firm that is serious about doing business with a top-knotch webMethods professional.

If you cannot get net 15, see what makes sense for both parties. I have received offers of net 60 from several body shop firms. Stay away from them. They are getting paid and sitting on the money. And, if they are not getting paid, then it is probable that they do not run a tight ship. I bring this up, because I contracted for a very well known firm who delayed payment to me for 6 months and then shorted me almost $10,000.00. I had to prove that the payment was less than it should have been and it took another month of harassing them to get final payment.

Resumes are always a fun part of the process. Firms always want resumes first before they will talk to you. NEVER SEND THEM YOUR RESUME FIRST. If they call and state they saw your resume on dice, monster or found you someplace else, then they have all the information needed that is on your resume. Also, point out to them that they called you, YOU DIDN'T CALL THEM DID YOU???

I don't like to send my resume out unless I plan to have it sent to a customer. Instead, send a locked PDF copy of your resume. Make sure there is something in it that they do not want, or that the format is not quite right. I have a resume that I send out WITHOUT any dates and it contains a LARGE webMethods certification image.

Many times, the recruiter will not talk to you without the resume, so if you must, send them a worthless PDF. At least you don't have to worry about them papering the world with your resume.

Communication - Evaluate how well the individual at the firm communicates. If you have a hard time understanding what they are physically saying, then this could be trouble later during problem solving sessions. If the recruiter is evasive about anything or seems to avoid answering any questions, then it is time to pass on the opportunity.

Get a copy of work request or requisition. This is important for you to determine what the rate should be. A developer does not garner the same rate as an architect. By the same token, don't accept a position that wants to pay an architect the rate of a developer. Also, don't let the requisition creep into other territories. Recently, I interviewed with a client in the North-East who wanted a hands-on developer for an EDI conversion project. After a length question and answer session, I determined that initially, they need a developer, but ultimately, want someone to help pressure the enterprise into making very strategic decisions based on specific webMethods nuances . Not the work of a developer. The requisition stated that only a developer need apply. So, the rate on the project matched that of a developer.

If possible, get a statement of work. A statement of work should contain the block of work covered by the contract you are signing. Make sure that it contains a list of assumptions and a list of risks or possible risks. The assumptions will usually contain things like database support, internal IT support, desk to sit at, etc. The list of risks will contain issues like not having the database yet, not having certain items installed that were supposed to be in place before you start. If you are not working for the PRIME contractor, you may not be able to get a copy, but push for it, because it should contain the list of items required for delivery and that is the list that will determine your success or failure for the job.

If you have several opportunities to choose from (and if you are good, this will always be the case), then you need to use stalling tactics. Often, the recruiters will high pressure you into signing a contract or agreeing to take a job and committing to a start date. The best thing you can do is tell them that the job sounds good but there are a few things you need to review.

Anyone in business has to determine the cost of doing a job. The costs of air travel, rental car, hotel and meals will eat into your rate. It's easy to determine in a large metropolitan area what the costs will be, but smaller or out of the way places can really cost a lot of money. For example, flying into Atlanta from anywhere is pretty inexpensive. Try flying into Charlotte, North Carolina.

I always tell recruiters that I need to understand the costs of the job so I can determine if the job rate makes sense. This will give you from a few hours to a few days. I've had recruiters email me apartment listings, airline flight schedules with costs and other information. DO this yourself and make sure you are satistied.

The best stall factor you can use is your lawyer. Advise the recruiter that the contract is under legal review. In EVERY case, the recruiters have offered to go over the contract in finite detail. But in actuality, it doesn't really matter. Whether you use a lawyer or not, they will never know. This gives you as much time as YOU need to decide which contract to take. If the recruiter complains, inform them that you run a business and that as a business person, you would be negligent if you didn't have the contract reviewed prior to signature. If they complain that their boss has their feet in the fire, get the boss on the phone and explain the situation. This would be a good time to bring any complaints to the table that you may have in the agreement.

Get a copy of the Professional Services Agreement, Independent Contractor Agreement, or the agreement that will cover your relationship with the recruiting firm.


At a minimum, make sure that the contract covers issues of payment schedules to you, the rate that you will be paid, and the length of the contract. Look for these items as well:

a. Termination - Who can terminate the agreement. Usually, firms want you to give them 2-3 weeks notice or 14-21 days notice. Sometimes it is necessary to discontinue a project. Several years ago, I experienced a death in the family. I took 10 days off the project but returned to finish the project. Make sure this is even. If they expect you to give them notice, at a minimum, make them do the same. If they require a 14 day notice for you to leave a project, then the firm should give you 14 days advanced notice. This will not be the case if you messed up and you are thrown out on the street head-first. I recently reviewed a contract that required me to give the firm a 21 day notice to discontinue services, but that they could terminate the agreement for any reason, at any time with NO NOTICE.

b. Confidentiality - Firms don't want you to loot their customer base. This is fair, but make sure it is not too restrictive. I don't sign anything that has a duration longer than 12 months. A lot can happen in 12 months so don't restrict your ability to make money. Also, if you are geographically challenged and don't want to travel, taking a local gig is great unless you quit and have no other place to go. One contract I reviewed required ME to pay 35% of the annual offered salary as damage. Be careful.

If the contract does not cover specifics, get ANYTHING in writing that is signed by someone authorized to cut the deal. Always be sure that you sign a deal with a principal of the firm.

REMEMBER: I AM NOT A LAWYER, GET ONE. Look up prepaid legal, they provide a local lawyer for a small monthly fee. (No, I'm not associated with them in any way.)

A quick review:

- Require the recruiter to establish the rate. This gives you an idea of where they are at in the food chain and if you really want to do the job.
- Negotiate, always ask for more than you ever think they will pay. You'll be surprised what they will do if they want you.
- Always ask for net 15.
- Send a PDF copy of your resume first. NEVER a word copy. Recruiters all state that they have to have your resume for overall review or they can't talk to you. Send them the PDF and they will always talk to you. It's the one thing you definitely have over them.
- Communication - Inability to communicate could spell trouble later if you have problems.
- Get a copy of the job description or requisition. This will allow you to figure out if you can do the job or if you want to do the job. I stay away from certain system configurations because they give me heartburn. The requisition helps me to filter out unwanted jobs.
- Statement of work - Lists your deliverables. You will need this at some point. The sooner the better. Also, this is a good tool to use to negotiate timelines. If the position is for 8 weeks, but you know from experience the work required will take 16 weeks, the time is now to discuss this. It's better to turn down a seemingly good job then to take a job that is doomed from bad planning or incorrect assumptions.
- Stalling tactics give you time to determine if the contract is worth taking.
- Contracts - read every single little word. Employ a lawyer. The contracts will seem one-sided because they are. The contracts protect the firm and reduce their risk substantially. Your job is to negotiate the contract to REDUCE your risk.
- Employ a lawyer.

I hope this help out as they are from my experience in dealing with scrupulous and unscrupulous firms. I review all of my own contracts but often, I find things that don't make sense because they are not applicable as law in my state. This is where my attorney comes in.

Saturday, August 14, 2004

Contivo Anyone?

Does anyone out there actually use contivo?

For those of you who do not know, it is a really neat mapping toolset that has an Enterprise Repository of various standards-based docs like EDI, XML, etc. that rapidly automaps between like fields. For example, an X12 850 4010 would map almost precisely with a xCBL Purchase Order in about five minutes.

There's a runtime package and a jar (I think) that you have to have.

We had nothing but problems with it when I worked with an old employer and it seemed like we were their QA department.

Other than the mapping functionality, does anyone have a positive spin on it?

Charlie Came and Went

All is well on the North-Eastern side of Orlando with the passing of Charley. I am lucky I suppose, because I live in a newer house in a new subdivision.

We have no exposed wires, no electric, no cable, no telephone above the ground.

The only wires above the ground are the main electric grid feed wires, and somehow, they managed to stay put.

Once Charley made ground, it sucked in a bunch of dry air and this caused the Hurricane to significantly lose power.

When it hit my neighborhood, winds were blowing about 60 mph, and gusting to about 90-95.

I lost no trees, bushes, etc. and a cursory check of my house is a thumbs up. Most of the neighbors fared the same except for fences down and an occasional tree.

We did lose our street sign. I can live with that.

The electric flickered on and off several times, but it always came back. We never lost cable or phone (to our knowledge.)

Friday, August 13, 2004

Here I sit like a Duck, waiting for Charlie

My sister and her fiancee are living large down in Naples, FL, breathing easy, with Charlie past and gaining speed.

I, on the other hand, am watching TV, waiting for Charlie to hit. This is the second largest storm that I have experienced (First, Andrew, 1992, Miami). If I had known that it was going to grow to Category 4 strength, I would have bid Orlando Sayonara and hit the road to Atlanta or other places that are high and dry.

I am going to bag up my computer and other things to keep them dry in case the roof is removed by high winds.

In all probability, everything will be ok. I'm keeping my fingers crossed.



Thursday, August 12, 2004

Oracle Am I? Developer Days ahead..

Oracle is presenting an Oracle Developer Days on the 19th of August in Miami and the 26th of August in Atlanta. I wonder which way I should travel?

I am interested in the "Workflow" like processes that Oracle supports, specifically, the BPEL tool. If it sounds like I don't know what I'm talking about, well, it's true, that's why I want to go.

Tuesday, August 10, 2004

I forgot what a vacation is..

For the past two weeks I have been on vacation. I bought a home in Orlando and due to my travels, rarely have time to see it. I have done a bit of updating including adding built-in lights and furniture. Don't laugh. I went from a 1 bedroom apartment to a four bedroom house with a yard. Quite the change.

As for my existence? I have formally set up my company and am rowing slowing up the river with a broken paddle.

I should start a new contract soon and in the meantime, I will take in some of this Florida sun, since I am sure the direction I am heading includes snow, bad weather and heavy jackets.

Cheers to all.