It’s no coincidence that the rise of the gig economy and global networks of freelancers are coinciding with the boom of startups across cities around the world. Freelancers are a god-send to startups who don’t want to pay high agency fees for work. Why go to a big development or marketing agency, when you can effectively access the same person who would be doing the work anyway for a fraction of the price?
With that in mind, when startups are looking to work with freelancers/consultants to deliver work, it is important that you set clear expectations before appointing them, so you know you are making the right choice!
When choosing freelancers/consultants, make sure you cover these 5 points first:
1 – Clearly establish the scope of the task at hand – you don’t want any misunderstandings on the exact scope of the task and you need to know the freelancer or consultant can deliver it.
2 – Ensure that you have clearly agreed on what should be actually delivered and when.
3 – Agree that you will have a procedure for feedback on the deliverables, so that if the freelancer or consultant delivers low quality work, then you have set a clear expectation that they will make changes at no additional cost.
4 – Agree fixed fees rather than open-ended hourly rates.
5 – Establish a clear timeline and set deadlines.
If they are doing large amounts of work for you, it is also necessary to confirm in advance that they are in fact a freelancer and not an employee of your company. If they were an employee, there would be some added responsibilities and costs on your side as the employer, such as making minimum pension contributions and national insurance payments.
REMEMBER – Do NOT pay up front
Please do not agree to pay full amounts up front for services – it is almost never a good idea unless there are special financial circumstances. You can pay an up front deposit of some kind, followed by payment on completion.
The Contract (once you have chosen them!)
Once you have chosen your freelancer or consultant, you should enter into a consultancy agreement with them. For more information on the consultancy agreement needed for appointing freelancers see our basic training article on consultancy agreements.
You can create your consultancy agreement to use with consultants or freelancers with Legal Sidekick here.
Do you always need a written agreement?
A contract doesn’t actually need to be a written signed document. You could complete a contract over email for example, or even via a conversation. However, having something clearly signed and in writing is the best way to ensure everything is unambiguously covered and agreed. If you aren’t going to have a proper written contract, then we definitely advise you to try and cover off the above points by email which the freelancer clearly acknowledges and agrees to.
Feel free to get in touch with us on this if you need support.
This Basic Training article was written by Legal Sidekick. Legal Sidekick is the legal platform for startups. We offer automated contracts and loads of startup legal resources and guides. For queries on hiring freelancers or hiring staff generally, contact us directly.