business advice | Aug 24, 2021 |
The client slashed my budget by 65 percent. Should I walk away?

Dear Sean,

In January, I received a commission on one of my biggest projects—a major renovation and decoration for a new client, who was referred by an architect I had never worked with (but really wanted to). I recently presented my design to rave reviews from my client. However, after the presentation, the client informed me that due to increased construction expenses, she would have to reduce my decor budget by more than 65 percent. Neither the architect nor the general contractor informed me of the adjusted budget (though I had my suspicions) or of the client’s intent to slash my budget. I am at such a crossroads. Most of my money is made through purchasing, and even 35 percent from where we started is a lot of money. That said, I feel like this is really awful, and I just want to walk away. What should I do?

Bent Out of Shape

Dear Bent Out of Shape,

I do really feel for you. We all know that, due to COVID, the cost of materials and labor for construction has exploded. Budgets established in the fall of 2020 are just not sustainable today, through no fault of anyone’s. If there is a given budget, something has to give, and it sounds like in this case, that was the decor. OK, fine. The real question here, then, is one of integrity.

I presume your scope of work laid out what you would be spending your client’s money on, and what that production budget would ultimately be. I also presume that you were in agreement as to what that amount would be (excluding your fees, taxes and expenses). If my presumptions are not true—well, then all bets are off, and you will learn the steep price for not having candid budget conversations with your clients.

But given that we’re assuming you had those frank conversations about budget, let me be a touch dramatic here: I can make out a real case for fraud. At a certain point, your client knew they would not be funding your design at the agreed-upon rate, yet they allowed you to proceed with your design. They might argue that your hourly design fees covered them, but that strains credibility when you receive such a large percentage of your payment based on purchases. One could argue that they had every intent to breach your contract and reap the rewards of your design ideas without fully paying for them.

So what should you do? I want you to imagine your very best client—you know, the one who pays immediately and makes decisions even faster, the one who appreciates you and your talent. Now, imagine having to relay the story of what is happening with this other client to them. If you told them how you are trying to work it out, how this is a lot of money and you need to try to finish, how do you think they would feel? Like they do not matter? Like you will not stand up for yourself or your work? Like a fool for trusting you as they do? Yes, yes and yes.

If integrity were always easy, it wouldn’t have such value. It is not easy, and you are challenged here to define the intention and purpose of your work. Simply, your client made a deal and broke it. Everyone here thinks they can ask you to absorb all of the pain that you most certainly did not cause. It is wrong, inappropriate, grossly unprofessional and not to be dismissed. My advice would be to terminate the relationship immediately—send a final bill within three days, demand to be paid within seven (and if not paid, have your lawyer send a demand letter), and send a letter saying that use of any of your ideas in whole or in part will be considered theft. You got paid to imagine the painting and then to actually paint it. This client is neither paying nor allowing you to do your work. Use of what is yours without proper compensation is theft, and whether what is being stolen is an idea or a material object makes no difference—it is your property, and if they would like use of it, they have to pay for it.

Next, you need to call out the architect for keeping you in the dark. Assuming the architect makes a percentage of construction, increased construction costs are not a pain point for them. The very notion that the walls are more important than how the client will actually live in the space with your decor needs to be addressed. Not only would I never work with this architect again, but I would also be diligent in letting your community know of their character.

It sounds harsh, right? But go back to your very best client. Imagine you relayed the story of this client (and architect and contractor) acting in bad faith and what you did about it. Imagine you told them that no amount of money was worth your integrity, and how an honest and forthright relationship is everything. I would suspect that is how you would like to be seen and perceived given your reputation and character.

Bad faith needs to be responded to as wholly inappropriate and unacceptable. You alone can define yourself as unworthy. Have the hard conversations, and then move on. Immediately.

Homepage photo: © Pixel-Shot/Adobe Stock

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Sean Low is the the go-to business coach for interior designers. His clients have included Nate Berkus, Sawyer Berson, Vicente Wolf, Barry Dixon, Kevin Isbell and McGrath II. Low earned his law degree from the University of Pennsylvania, and as founder-president of The Business of Being Creative, he has long consulted for design businesses. In his Business Advice column for BOH, he answers designers’ most pressing questions. Have a dilemma? Send us an email—and don’t worry, we can keep your details anonymous.

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