(Editor’s note: this piece was published by Art in 2008 and still applies today)

I received a cryptic email the other day: “A director we’ve hired asked for you. Please tell us your rates and fees for a one day corporate project.”

As soon as someone asks me my “rates and fees” I know they haven’t done this very much, so I responded and asked what they had in their budget. The followup email was the same: tell us how much you want. So I responded with my high-end corporate rate. Silence.

A short while later the director emails: “They don’t have a very big budget, and I’d rather work with you than the person they want to hire, so could you cut them some slack?” I’m reasonable, and I like working with this director, so I tell him sure: I’m open to negotiating.

The company calls me up. “Please tell us your lowest rate and fees, please.” My response: “Tell you what: tell me what’s in the budget and I’ll tell you if I can live with it or not.” They said they’d call me back. That was the last I heard from them.

A few days later an email came in from the director that answered a lot of questions. This company (a large internet company) had decided to produce this project in-house to save money, even though they had no idea how to do it. When asked how much the project would cost, the department head spat out a number that turned out to be about half of what the project would cost–something that regularly happens when inexperienced people try to wing budgets under pressure.*** The reason they’d not quoted a line item number to me was that they didn’t have one. They were just calling around and adding numbers up, and as long as the sum was less than their budget they felt they were okay. My rate kept pushing them over the top, and they couldn’t cut the union actors or the director, so…

In the end they hired a producer, who hired a cheap DP without consulting the director. I never had a chance unless I was willing to lowball myself right from the start–something I learned not to do a long time ago. If you compete on the top, you’re competing on ability and predictability: if the company wants a specific and very important look, you’ll provide it. If you compete on the bottom you can only compete on price–and there’s always someone cheaper. Always.

In the end, for negotiation to work, both sides have to have a position to negotiate from. Their side had no position. Hopefully I’ll have better luck with them next time.

***From now on this shall be known as “Adams’ Law of Budgeting.”