How To Protect Your Big Idea When Hiring a Freelancer

Hiring freelancers or independent contractors is a great way to get specific tasks done without having to hire more full-time employees. This can save you time and money; you won’t have to go through a lengthy interview and hiring process or provide benefits like health insurance.

The number of individuals and businesses hiring freelancers in the United States is ever-growing. This report from Freelancers Union and Upwork estimates that there are nearly 60 million Americans who worked as freelancers during 2019.

Once you decided that collaborating with freelancers is the right fit for you and your company, there are a lot of things that you need to consider before hiring one. After all, you are essentially handing over a part of your business to someone you likely do not know well – at least for a little bit – so you must protect yourself and your business from a legal perspective. This way, if something goes wrong, your ideas and your project can stay yours!.

 Let’s see how to do this, both legally and through the creation of a satisfactory business relationship.

Ownership of Intellectual Property 

From a legal perspective, intellectual property (IP) is not physical property. Instead, it represents ideas or things that you have created, which can be protected by patent, copyright, or trademark law. 

Whenever you enter an agreement with a freelancer, it’s important to state outright who owns the intellectual property involved, and any work that comes from it or is done with it. It will help if you put this in your contract with your freelancer. Once it’s written in your contract, ownership of anything your freelancer creates relating to your IP passes to you upon the completion of the project. 

One way to do this is to agree with your freelancer that everything that they create relating to the project – their IP – passes to you when it is necessary for the business. You want to make sure that this covers copyright, use of the product commercially, ownership, and more, so that you can use your freelancer’s finished work as you see fit. 

Many freelancing websites have this type of agreement contained in their terms of service. This means that when a freelancer signs up to use a website like Upwork, or something similar, the freelancer agrees to the fact that once they are paid, the individual has no right to use it.

Another way to protect your project and stop independent contractors who helped you create it from copying parts or re-using the finished product is to patent it. Yet, the patenting process can be costly and take up to two years from the day when you file the patent application.

Non-Disclosure Agreements

Non-disclosure agreements can be put either into a contract or signed separately by you and your freelancer. These essentially make sure that all relevant information shared between you and your freelancer remains private, and the individual completing work for you is restricted to complete confidentiality.  

Non-disclosure agreements are appropriate in instances when you’re dealing with freelancers because it is likely that you do not know that individual very well. 

Such an agreement is excellent in cases where you have yet to retain a copyright or trademark for your project. 

By signing a non-disclosure, your freelancer will be unable to take your ideas and pass them off as their own in a public setting, making you better protected if something should occur. 

Contracts

All of the above – IP agreements, as well as non-disclosure and exclusivity agreements – can be contained in your contract with your freelancer.

In many instances, much of it may already be covered in the “terms of service” that both you and the freelancer agree to when they sign up for a freelancing website. 

These same websites also usually allow for the creation of an additional contract or terms to an agreement. To completely protect yourself and your IP, it’s best to enter into a contract with your freelancer that explicitly states that you retain ownership of all the rights to your IP and that the freelancer is doing work for you on a limited-term basis. 

You may also stipulate in the contract that the freelancer in question must either return or destroy any materials they used to create their finished project. 

Vet Your Candidates

While hiring a freelancer is a much shorter process than looking for and bringing on a new, full-time employee, it’s still just as essential to make sure that you’re practicing due diligence in the hiring process. 

When looking for a freelancer on a service website such as Upwork, make sure you vet potential candidates by looking at previous jobs they’ve taken on and any customer satisfaction reviews. Verify that their resume is legitimate, and if you’re unsure, feel free to ask for references or referrals from past employers. 

Another way to vet a candidate is to offer them a test project to make sure that they are capable of providing you with the services you need. Paid test projects are good for both parties – it pays the freelancer for their time, but it also allows a potential employee to see what their candidate is like in action. It can even help to sharpen the focus of any project or idea, and confirm whether or not the timelines you have set for yourself in terms of your project are realistic. 

Communication

To get the best-finished product from your freelancer, you must be extremely explicit in regards to what you want from him/her. Layout in detail what you want your freelancer to do, how much you will pay them for it, and what you’re expecting overall. Establish the idea directly that once the freelancer is done with the project, it’s yours to use as you see fit. 

I experienced this first hand when I ordered a package of 5 images from a graphic designer on Upwork. I was going to showcase the images on my portfolio website for a new client to see my work. Unexpectedly, all five photos had the freelancer’s watermark on them. Still, she was fast at responding to my messages and agreed to release all images without attributing credit to herself.

Additionally, be open to questions, so if your freelancer gets stuck, they can reach out to you to make sure that they are on the right track. The better the communication you have with your freelancer, the better the final work product is likely to be. 

Payment Terms

Another way to protect yourself when you hire a freelancer is only compensating for work once the project is completed and in your hands. You can agree with your freelancer that once they are paid for the work they have done, any finished product they have created is yours. This will help to ensure that you are satisfied with the final product.

 Many freelancing websites have an escrow system of payment where freelancers are only paid for their work once their clients are happy with what they produced. In paying freelancers at the end of their project, they are also more likely to stay on schedule. 

Bottom line

Hiring a freelancer is usually a great way to get a project done on time, without the hassle of hiring a new employee. And while they are becoming more popular in the United States and across the world, it’s always important to remember to protect yourself, your ideas, and your business.