[tootie]

I was a director for digital agencies for a long time. There's no real fixed model for any of it. Like others have said, contract-wise you can bill as fixed fee, time and materials or some hybrid. Customers are more apt to sign a fixed fee, but it's a huge risk to put a fixed scope, budget and timing unless you know exactly what you're doing. Any level of ambiguity could lead to costly overruns and missed expectations.

In terms of what kind of work you do for them, it's up to you to sell whatever you're comfortable with so long as every expectation is explicitly documented in the contract/SOW. Companies can hire technology services to do almost anything up and down the value chain. From strategy and user experience design, marketing, content production, system architecture, development to operations and maintenance. The bottom tier is something like staff augmentation where you just rent out warm bodies to do IT work. The agency model is more like landing a complete self-organizing, product development team who take business objectives and translate them into a working product.

Stuff like operations and maintenance is stuff I would typically avoid because it can be open-ended and difficult to make money doing. I usually stipulate that clients have to own infrastructure even if we do the setup and add some specific warranty language on how long we will answer bug reports, what qualifies as a bug and what kind of turnaround time we'd need to resolve them. Especially at small scale, clients will search for any excuse to drag out their contract to get more work out of you or find a reason to not pay so you need enforceable language.

Doing good work and building trust can lead to future work. You need to toe a line between aggressively managing scope to not get taken advantage of while still staying flexible enough to be seen as a good partner. It's really common for a client to have a big vision and no idea what it costs, so we sell an MVP that does maybe 1/4 of their dreams to get a product to market within their budget, but there's still a lot of meat on the bone for future work. Sometimes it leads to a long relationship and sometimes they just fold.

It's a risky business, but there's also a huge market that only seems to be expanding. If you make a name for yourself and build up a few nice portfolio pieces, clients will come to you after not too long.

[sirspacey]

Along these lines it is important to recognize:

1) the larger the client, the more it is an intentional practice to leverage any gaps in the contract to extract whatever value the company wants at that moment, regardless of what was agreed to

2) what the client “remembers” the agreement to make is usually whatever they first proposed. While many agencies seek to define agreements as a defense, larger clients happily believe you cannot afford to disappoint them and it’s entirely up to you as to whether you will play that game of chicken. Spoiler alert: you won’t.

Fortune 500s especially are very risky clients on these two points.

[aconsult1]

This is not my experience at all. If you know what you're doing is relatively easy to avoid the pitfalls you described.

Working with f500 companies is very good business if you have the reputation to push back on their crazy deadlines and actually deliver after they sign you a contract. If you show them professional and reliable work the issues you described typically go away.

I own a software consulting firm and those are problems that I frequently see in projects done by companies that are only looking for the paycheck and then they cut every corner possible and have no real commitment with the project/customer.

In the end the PM says "at least I hired Accenture so this isn't my fault".

It was exactly for those reasons that 15 years ago I decided to start my own company trying to 1) have fun place for devs and 2) deliver on budget and on time in every single project. For 15 years I didn't have to hire a single sales person because our reputation kept bringing more projects than we could handle.

Software consulting can be very fulfilling and rewarding if you have the passion and nails the deliveries. If you build, they'll come.

[redis_mlc]

It gets much worse than that. If you're planning to do software development consulting/contracting, definitely read on.

Here's some scenarios I've seen:

1) US F500 companies are sending out documents to vendors to allow clawing back payments from your bank account number. So besides stretching out payment terms to monts, they can reverse those payments. Never sign those if you plan to be around next year.

2) Sometimes the staff proposing the project get cold feet in the middle of the approval process, realizing there's career risk if the project fails for any reason. You'll get an email like, "Good news, we signed the deal but you'll be reporting to somebody else. Good luck!." And then you talk o the new guy and he says, "It doesn't matter to me if this project succeeds. We just won't pay if it doesn't." Without a champion, there's a sense of limbo that weighs on the project.

In this case, the former champions became so risk-averse that they said, "Why don't you retain ownership of the product, and we'll just pay you like it was a service instead?" Bizarre, but that level of hands-off made them comfortable, and the product can be sold as-is to other companies.

3) Then there's the "missing key man" who shows up after approval and says, "This project is for my group, but I don't want to meet with you. Just develop it and I'll take a look after you're done and let you know if I like it or not."

4) I've done development on 3 contracts where the big name companies had serious networking or other infrastructure issues that required workarounds.

One manager actually said after I arrived on-site, "It's more valuable to me if you troubleshoot the infra problems than finish the product." It turned out they had email loop problems that lost most internal emails and saturated their switches.

Often you get a reaction of disbelief when you tell people these anecdotes, even in the industry, but those actually happened. All of the projects were finished successfully, but the project risk increased far beyond what was expected for both sides, and relations turned from friendly to hard-nosed solely because of their internal politics.

The best thing you can do is ensure the project is big enough to make it worthwhile despite surprises, and to know exactly who the champions and customers are. Or just get a job at FAANG.