"Trust built on nothing is a con."
I am a professional designer of 20 or so years by now. Many of those years were spent grinding away in the Chicago market as a freelancer. In that time I dealt with ALOT of companies. Some were very large, some very small, most were in the middle. Most were legitimate; and a few were a bit iffy. Like many talent-related businesses, there are many war stories about gullible professionals who have been taken advantage of by scammers, dreamers, incompetents, and just plain dirty people.
When it comes to scoping out new clients, here are a few rules I've developed over the years:
1) NEVER apply to a "blind box" ad.
I've heard that some companies use blind box replies to "keep prospects from calling them all day about the job". These are the classified ads that do not mention the name of the company, a phone number, or even a contact name.
Blind Box Ads are BULLSHIT!
A legit company will let you know who they are and will take an initial phone call; even if it's to say that they don't take phone calls and they'll call you back if they're interested.
I've found that blind boxes serve a great purpose to scammers. If you are marginally talented and are in need of fresh ideas to steal; what could be better than to place a "Designers Wanted" ad in your newspaper and watch all the free ideas come into your post office box! And the best part is that those who have sent in their portfolios don't even know that they have been ripped off, so the scammers can do this over and over again! Never send a portfolio to anyone without knowing who you are sending it to.
2) Always check out a company before you go in for an interview or accept a job offer.
This is self-explanatory. You need to know a lot about a company before you even step in the door. Talk to other pros in your area; have they worked with this company before? Do they know anyone there? Word gets around pretty quick if someone's doing shady business. Larger cities have it much harder, but Google works, my friend! If some person out of the blue contacts you about some work (freelance or otherwise), Google their ass! This goes even further if said company makes a job offer.
I moved to northern Indiana fresh out of college. I accepted a job offer from a small but storied phone book studio in Mishawaka without doing ANY homework first (if you live in the area, you know EXACTLY who I'm talking about). First, they asked me to do a "camp out" which is to work for them for a day without PAY (Mistake #1). Next they offered me the job, so I gave notice at kinko's (my job at the time). Two weeks later I showed up for my first day at the agency, only to be turned away; the Art Director wasn't there and they weren't ready for me to start or some complicated BS. This went on every day for about a week before I got the hint; the job offer wasn't legit. I went back to kinko's the next week only to find out that EVERYONE there knew that this agency was known for this kind of stuff. They had scammed every printer in town, were known for offering to trade ads and designs for goods and services*, and were known to offer bogus jobs to young and stupid prospects just to get free design work from them. They also tried to get their paid employees to work off the clock (i.e. WalMart). Somehow this company is still in business.
*The owner of the company would personally offer to trade services with a local restaurant. Many years later I happened to be there when he loudly argued with the owner of the restaurant in front of his family and the crowd. The restaurant was tired of giving him food for free!
3) Watch out for the Bait And Switch
Here's the scenario; you get a call for a gig. The gig is supposed to be X amount of design work for Y amount of money for Z amount of time. You accept and show up as asked. Once there, they try to argue you to do X amount of MORE work for Y amount LESS money, or for LESS Z amount of time than you need to get it done. If the gig smells like this, don't argue, don't bargain, just leave. Trust me; you'll be lucky if you get paid at all.
4) ALWAYS offer a written estimate with a Deposit and a KILL FEE!!
When you start a gig with someone you don't know, send them an estimate in writing with a kick-off deposit and a kill fee. The deposit is what they pay you after they agree to terms and BEFORE you do a thing! The kill fee is what you charge if for some reason the company tried to get out of the project without finishing it. The total amount of these fees should be about half of the whole estimate. (i.e. the whole job is $5,000: $1,250 is the project deposit, and another $1,250 is the kill fee). This is to cover your expenses at kick off and is insurance that the company isn't going to bail on you without paying ANYTHING once the job is done. Also, the phrases "deposit" and "kill fee" are kryptonite for scammers. They know you have some idea of what you're doing and probably won't call you back to kick off the project in the 1st place (win!)
5) How to Spot A "Dreamer"
A dreamer is somebody that offers you a gig with the promise of a partnership or percentage of what they hope the project will be worth sometime in the future. I design consumer product packaging (www.davejohnsonart.com) I can't tell you how many of these e-mails I get from folks who think they have "The Next Oxi-Clean®" or some such junk. They have no money to pay me with, but will give me X% of what they will eventually sell of this wonder product!!!
Here's the truth; if somebody is legit; they'll pay you for your services… PERIOD.
They will not offer the dream of infinite wealth in exchange for your professional work.
6) Avoid the "Shotgun Agency"
I saved this one for last for a great reason. I needed to explain the previous points as they are examples of "short cons" designers have to deal with. The Shotgun Agency is a long con. They are companies that rent an office in a small to medium sized space, have been in business under a year but have LOTS of awesome brand new rented Herman Miller furniture. The owners are also from someplace else, but moved to your town for X reason. Also, none of the principals have any of their personal stuff in the office (VERY BIG CLUE). Most importantly, no one but the owners are much above 20 years old… These are warning signs! An agency like this has all the familiar symptoms of a company that is here one day and gone the next. These companies setup in a new town, go around offering their services under-cutting the competing agencies; get a few contracts worth hundreds of thousands of dollars, "hire" talent to help them do the work, and once the clients start paying, they skip town… without paying any of their workers, or their office rent, or the lovely rented Herman Miller furniture, or most importantly YOU! I can't tell you how many of these places I've interviewed with only to call back a month later and get a disconnected signal. If you accept any work from them, get paid up front or LEAVE. You may never see them again after the work is done!
In my years as a pro; I haven't been burned a lot, but I've had a few close calls. I lost more time than money, and I know enough to avoid most of the pitfalls out there. I never accept work without an agreed written estimate first, with all the terms spelled out and deliverables understood between both parties. I always ask for a deposit and a kill fee, and I'm rarely turned down by legit companies. As I mentioned before; those who are less than legit run away quickly. If you have been scammed in the past; know that you are not alone. Use your best judgment when approached and utilize the internet, my friend! There are a lot of people out there who will pay what you are worth, so don't just turn everyone down.
Do your homework, do good work, get paid.