It’s Monday again! That means I’m digging into the ol’ mailbox, to answer YOUR questions…
If YOU have a question about marketing, copywriting, business, life, whatever… And you’d like to have it answered here… All you gotta do is send me an email at [email protected]. I’ll add you to the queue and answer your question in an upcoming Mailbox Monday issue of Breakthrough Marketing Secrets.
Today’s question is one that I think crosses the mind of most early-career direct response copywriters. It’s about royalties.
Specifically, about what happens AFTER you’ve managed to negotiate royalties, and AFTER you have a winner on your hands… At the point where you’re actually owed money by the client.
I’ll let Steve take it from here…
On 1/26/2015, you wrote a very good article about copywriting royalties and how to get them.
While this is a little-discussed topic, there’s an additional part to it that is even less discussed — how do we verify the publisher’s numbers? How can we ensure they are not under-reporting sales or over-reporting refunds?
“Trust but verify” is the concept that comes to mind here.
Okay, this is a bit of a tricky question to answer.
Not because I’ve had problems with it. In fact, for the most part, I’ve only dealt with clients who pay royalties generously and without hassle.
But because I know that my experience is NOT representative of the total copywriting universe. I know that there are clients who are not nearly as reliable with their royalties as mine have been.
And so I’ll try to give you my personal answer first, and then what I think is a more universal answer after that.
If you want to get paid royalties regularly, accurately, and without headache… Pick clients that don’t suck!
This is what I’ve attempted to do throughout my copywriting career.
I try to only work with clients who have a regular process for hiring copywriters, and who have a system in place for paying royalties. Mostly, the big direct response publishers.
This dramatically limits my client pool. Including omitting many clients who would probably be great clients, and pay royalties as regularly as the sun rises.
But it works for me.
These companies tend to have a vested interest in keeping their copywriters happy. They know it’s a small world we play in. And they develop reputations in the big direct response markets like financial and health by, among other things, keeping copywriters content about working with them.
As far as I can tell, my clients are fairly honest about their sales stats — and thus, my royalties.
Have I been screwed? Maybe. Do I worry about it? I haven’t found a situation where it’s been egregious enough that I need to dedicate the time and energy to doing so.
That’s my solution, but if you’re NOT going after the big direct response companies, here’s my main recommendation…
Recognizing that not everybody can or should or wants to work with the big direct response companies I work with, here’s one big idea that could dramatically increase your leverage in getting paid what you’re owed.
And note… The following is NOT legal advice… It’s a recommendation of what to seek out in terms of legal advice.
Okay, so first off, if you don’t trust a client to pay you royalties, you probably should avoid working with them in the first place. But if you’re going to do it, you should definitely have a contract. And in that contract, there’s a very important clause you should include.
Basically, you want a “right to audit” clause.
Very basically, what you need to have in your contract, is a statement along these lines…
“As part of the royalty compensation agreement, the copywriter reserves the right to hire a third-party auditor of my choosing at any time and for any reason to ensure all sales are being appropriately accounted for, and royalties paid accordingly. Should the independent audit find that royalties have been withheld, they will become due immediately, and the client will assume full financial responsibility for the costs of the audit. Should the audit find that all royalties have been paid as owed in accordance with this contract, the copywriter will be financially responsible for the audit.”
Basically, if there’s any question, you get to hire an auditor.
If the audit comes up clean, you have to pay the cost of your suspicion.
If the audit reveals questionable or dirty behavior, not only does the client have to pay you what you’re owed, they also have to pay for the audit. (You should be prepared to at least temporarily shoulder the cost of the audit in this case, out of professional courtesy to the auditor you’ve brought in.)
If you want a really thick, legal-language-laden version of this clause as a sample, there’s one on the Association of Certified Fraud Examiners’ website here. That one is kind of backwards from the situation we’re talking about, but if you’re really serious about adding this to your contract, it’d be worth study.
That said, here’s a big warning!
First off, if you put this in a contract, some clients will balk.
Sometimes, they’ll totally flip out.
Sometimes, you’ll get an email or phone call saying, “Umm… I talked to my attorney, and…”
This is a bad sign. I was talking with another copywriter recently, and he asked about a clause in a contract the client had given him to sign. It didn’t make sense to me, and it demanded something I’d never seen demanded of copywriters.
I told him that if they wouldn’t remove that clause, that they had a writer on their team who they wanted to pay more than they ever wanted to pay copywriters — the attorney who wrote the contract.
I told him I’d walk if it were me.
If your client is skittish about legal trouble… If they won’t accept a clause in a contract meant to keep them in line in terms of paying you what they owe you… If they cause any bad gut reactions in the contract negotiation process…
You should really think twice about working with them.
Consider walking away, even if the check is big.
There’s pretty much nothing they could pay you today that would make it worth the agony down the road of having to deal with stupid legal issues.
If you include an independent audit clause in your contract, hopefully you never have to use it. It’s like catastrophic insurance. It’s there if you need it, but you hope it works out to be a bad investment.
And finally, no matter how many layers of protection you give yourself, bad people will still do bad things. You have to, to some degree, be willing to just walk away if you develop doubts over a situation.
Hope this is helpful!
Yours for bigger breakthroughs,
Editor, Breakthrough Marketing Secrets