When we talked about ways to get paid someone asked about escrow for writers.
Escrow is defined, in part, as “…an asset is held by a third party on behalf of two other parties that are in the process of completing a transaction.”
For our purposes the asset that the third part holds is money placed ‘in escrow’ by the client; the transaction is the writing you’ve contracted to do, for which you will be paid ‘out of escrow’ when the writing is complete.
When a client is reluctant to pay you in advance, setting up an escrow can alleviate that problem while assuring you get paid eventually. A case can be made that since the money is locked up you then a
More often associated with real estate transaction, Elance (now Upwork) can probably be credited for popularizing the concept of funds being held in escrow for writers and other kinds of freelance projects.
Finding escrow for writers
Much to my surprise, I didn’t find a ton of escrow companies that provide services for writers until I googled escrow for contracted services. That led me to search online escrow services which resulted in a few more. I’ve not used any of them so I have no recommendation. Be sure you read and understand any contract and terms and conditions if you elect to use one.
Escrow service companies charge for the service. I can’t get a total handle on the amount, but it looks like the fees range between 2 percent to 3.5 percent of the total escrow amount. Nor is there any standard that I can find that indicates if the client or the writer normally pays the fees. So that’s up for negotiation. It’s probably worth noting that if you or the client are working through a service like Upwork, escrow charges are built into their fees and may be invisible.
Escrow for writers – do you need it?
I can’t think why a writer really needs an escrow service. If you don’t believe the client is going to pay you, you probably shouldn’t be working for them. You also should be insisting on getting at least an advance up front on the work. Jenn Mattern talks about the why and the how of getting all your money up front.
On the other hand, I can imagine a situation where a new client was unwilling to pay an advance until they’d seen at least some of the work. I find when I’m clear on my pricing this doesn’t happen. But if I wanted the job for some reason and that seemed to be the only objection I might suggest we use an escrow service. It would be to reassure the client. I’d rather get the advance.
What do you think? Do you use an escrow service to get payment? Would you?
Write well and often,