The contractor who doesn’t use contracts

One day I was at a networking event and I bumped into a contractor who had a way of getting paid by clients that I’ve never heard of before.  This strikes me as pretty unique, because I listen to a lot of podcasts, read a lot of books, and talk to a lot of consultants.  I don’t have an opinion about what I’m about to tell you, I just found it fascinating and wanted to share it with others.  If you have an opinion about it, please leave me a comment because I really can’t figure out if it’s a good idea or a bad one.

Before I start, I want to say that he is a DevOp whereas I’m more of a Software Engineer.  For all I know, this is a common thing in their circle.  The differences between these two specialties may make it possible for him to pull this off whereas it would be unfeasible for me.  I’m not sure about that, either.

Here’s how it works: 

  1. He shows up and works for a day.
  2. He shows up the same day next week.  He expects a check to be ready for him as soon as he arrives. This check is for a days worth of pay for the work he did last week.  If the check is there, he repeats step 2 for as long as the client wants.  But…
  3. If that check is not there, he does not start working until he gets it.
    1. If he gets it later that day, the clock is ticking.  That means if he ends up waiting 3 hours for the check, he only works for another 5 hours that day.
    2. If he doesn’t get a check that day, he doesn’t come back next week.

The craziest thing about this to me is that he doesn’t use contracts.  He takes on the risk that he won’t be paid for a day’s worth of work and that he can be laid off at any time. But I imagine the pipeline is rather streamlined because neither party has to sign anything.

By the way, I’m sure that if he’s low on clients he will work for the same one multiple times a week (I didn’t ask.  This is an assumption on my part).  But he told me he prefers to work for at least 4 clients at a time and visit each one of them once a week.

I’d love to hear about some other unique pricing plans you have heard of.  Write me a comment or send me an email.

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