Retainers seem like an ideal solution: You set aside a certain number of hours and get paid whether or not you even work! What’s not to like? Well, let’s start with the fact that it rarely runs that smoothly.
Today’s question is from Mike M., who asks, “Could you please explain the ins and outs of clients who hire copywriters on retainer and how it works?”
First, let’s make sure we’re all on the same page when it comes to the term “retainer.” In broad terms, a company that hires you on retainer pays you a certain amount per month in exchange for having access to you whenever they need you.
The upside of this arrangement, obviously, is that you have a certain amount of money you can bank on coming in each month as long as the retainer agreement is active. Guaranteed cash? Great!
But in practice, this doesn’t work quite as easily as it seems.
First, setting up a fair retainer is exceedingly hard to do. You have to make sure that you’re making enough to justify dropping whatever else you’re working on (or, in reality, pushing it into the other, personal life hours of your life).
You also need to make sure that you have room in your schedule to actually push off those other clients. If you’re on deadline with two freelance clients and a retainer project comes in, guess who needs to get your first attention? (Hint: Your retainer work.)
In addition, you need to figure out an amount based on what the client thinks the average amount of work will be, and that’s exceedingly hard to do. Why? Because I haven’t met a client yet who has a firm grasp on how much work they need done and/or how much time it will take.
That means you run the risk of taking a retainer and having more work to do than what’s covered by your retainer price.
Now, of course, you can have an agreement that any additional hours over the retainer can be billed separately. But…one of the reasons a company has a retainer is to make payments easy and automatic. If you’re regularly billing over that retainer, there’s no point in having a retainer — you might as well just bill for the whole project all month.
On the other side of the coin, you might end up with a retainer where you get paid a decent amount of money each month, but the client doesn’t have much work to send you. Free money? Sure…until a company notices how much money they’re “donating” to you each month.
For all of these reasons, it’s actually pretty uncommon to find many copywriting retainer arrangements. (Content writing may be a different matter, but even then, project tend to be by the hour or even — shudder — by the word.) The amount of copywriting any client tends to need varies on a daily and monthly basis. Even if you get a retainer contract, it’s going to be hard to make one that keeps both you and your client regularly happy.
If you want to test out a retainer agreement, though, the best way to do it is to start with a low amount of time and a plan for what happens if the work requires more time.
For example, a friend of mine is a digital marketer who consults for several big name travel websites. When he started talking to a new potential client, the client company wasn’t entirely sure of exactly what they needed from him (and so he couldn’t really be, either).
They agreed to try out a semi-retainer agreement in which they reserved him for three hours of work per week with a maximum of three additional hours of work per week. (Since he’s busy, he couldn’t guarantee them an unlimited amount of work over those three hours.)
So, they would pay him for three hours whether or not they had work for him to do, but when there was work in addition to those three hours, he as would work up to three more hours that week at his hourly rate.
Which seems to work…except that it doesn’t make billing any simpler than just submitting an invoice every month.
And as for that “free” month on the weeks when they didn’t need him? Well, because he’s a well-respected professional, he was never comfortable with getting paid for doing nothing and would squeeze those hours of work in when they needed them. (Things like that don’t tend to happen in the big, multi-million dollar legal firms some companies keep on retainer.)
If you find a company that wants you to work on retainer, you should certainly give it a try if that’s their billing preference. But I’ll bet that it won’t be long before both of you find that a retainer agreement is just more trouble than it’s worth.
Your turn! Do you have any experience with retainer agreements? Let us know in the comments below!