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Chapter Three:

Lying

“One of the most striking differences between a cat and a lie is that a cat has only nine lives.”

~ Mark Twain

Lies are everywhere. Governments are big and tell big lies. News outlets are far-reaching and can tell wide lies. Individuals usually stay in the smaller realm of lies but even they can tell some whoppers.

And lies never die.

With all this dishonesty you must gravitate toward the truth. You must work toward clients who are ethical, who won’t waste your time and who will actually pay you for your time. You simply can’t afford to have clients who lie to you and engage in deceitful practices.

The problem is, how can you ever know right off the bat whether they will lie and cheat? You can’t.

A popular study reported in American Psychologist indicates that even those tasked with spotting liars—police officers, psychologists, and judges—were no better at identifying lies than the rest of us. In fact, only Secret Service agents fared better than random chance.

Meanwhile, a study published in the Journal of Basic and Applied Psychology, discovered that in a 10-minute conversation between two strangers, 60 percent of people lied at least once, with the average being three lies per 10-minute conversation.

Bottom line: You can count on being lied to. Knowing whom and what situations to avoid is not only crucial for your business but, ironically, it is gained only by being in business. A big part of knowing is relying on your instincts, which we will discuss further in Chapter Five.

But instincts can take time to develop. How can you know right now?

Part of the answer can come from the scenario you are in. As I’ve said before, getting a client is nice, but it’s no excuse to let your guard down. You need to evaluate what the client says and what situation you’re walking into.

Case No. 6: The Landscaper

Marvin Washington had a funny feeling about the family that hired him to build a patio garden at their country home. He couldn’t put his finger on it, but for some reason Marvin didn’t warm right away to the Collingsworths. They seemed respectable enough, though. Elena Collingsworth was a real estate agent. Her husband, Dexter, was a partner with his brother in a home supply-distribution company. They had two children and a dog. They had enough disposable income for an RV, dirt bikes and toy haulers, and, now, apparently enough to spend on prettying up the grounds.

Washington had recently begun his business as a landscape contractor. He held a college degree in horticulture and had bolstered his education with additional training in landscape design. He also was taking professional development classes in various aspects of landscaping, such as irrigation. Marvin was a full-service landscaper—designing and building projects, renovating gardens and performing limited landscape maintenance.

The only thing Washington lacked was years of experience. He was new to the business and only had a handful of clients. But the Collingsworths didn’t seem to mind. In fact, they said they appreciated hiring someone new. Washington’s sixth sense gave him some apprehension at that comment, but he needed the business.

“Back then, a small amount of money meant a lot,” Washington said. “The landscape job was an $8,600 job, which could pay a lot of bills.”

Today, after nearly two decades as a contractor, Washington has a strong, thriving business. He benefits from the fact that his reputation and customer base consistently generate good clients for him. Word of mouth is the best kind of advertising. Marvin’s clientele for landscaping is largely self-selective. Washington’s typical landscape client tends to be professional, well-educated, and upper middle-class—not rich, but with enough disposable income to afford his services.

It’s not surprising, then, that what Washington calls his “crown jewel of miserable experiences” in business occurred toward the beginning of his career, before he’d carved out his niche.

The Collingsworths’ home was nice but not pretentious, and sat in an idyllic pocket of the greater urban community: a “farmlet” area of winding lanes, green pastures with grazing livestock, pretty trees, ponds, and creeks.

The Collingsworths, by all appearances, could afford to pay for landscaping. They wanted a patio garden installed. Washington prepared a detailed written estimate for an area with interlocking pavement stones, several trees and shrubs, a drip- irrigation system, and bark mulch, all for $8,600.

Elena and Dexter Collingsworth accepted the estimate.

Washington and his assistant got to work. And almost immediately the Collingsworths became less and less communicative. In fact, while the work was being done, they had become rather distant and unfriendly.

Nonetheless, the job was finished on time and on budget.

Everything had seemed to go well until Washington and his assistant finished the work and it was time to pay.

Washington mailed off the bill, but several weeks went by and no check arrived. Instead, he was in for a surprise: On Christmas Eve, he received a registered letter stating that the Collingsworths had found the landscaping work “sub-standard” and had no intention of paying for it!

The letter, signed by both Elena and Dexter Collingsworth, stated that they didn’t like the way the pavers had been installed, in addition to several other complaints. Washington was flabbergasted. A legal nightmare was starting, and he had no idea what would come of it.

Washington realized he was out of his depth. He knew that the small claims limit was only $5,000, precluding him from collecting the full amount. Washington did not know about mechanics’ leins (discussed further on) and had not filed one.

Washington contacted his attorney, who helped him to sue the Collingsworths. The family then countersued, alleging that Washington had been working in their yard without their approval. In other words, they alleged he’d opted to work for free. Not only that, but while incomprehensively working for free, he had improperly staked the tree saplings.

The ugly legal dispute put the two parties before the judge three times, all in an effort to collect the $8,600 owed to Washington, plus $9,500 in legal fees (which would be over $20,000 in today’s dollars). His lawyer told him “I’ve never experienced such a level of viciousness before.”

But when all was said and done, Washington won, and both he and his lawyer were ultimately paid.

This leads us to the next important point about Toxic Clients: Some of them will purposely deceive you.

Since he was just starting in business and needed customers, it’s likely that Washington appeared vulnerable—a quality that the Collingsworths were practiced at sniffing out.

While it can take some time to develop the instinct for spotting liars, every new business owner needs to consider whether that’s precisely the reason they’re being hired: Because they’re new.

There is a class of Toxic Client out there who will take advantage of your limited experience in the business world. Your honesty and flexibility is seen by such calculating types as a vulnerability. While they will say that they like to give new business owners a chance, what they really mean is that they’ll take a chance that new business owners won’t know how to deal with their deceit.

This type of behavior is accentuated by the expense to resolve matters within our legal system. Most deceitful Toxic Clients know that it can quite easily cost $50,000 in legal fees to resolve a $10,000 dispute.

They know that the expense, combined with the stress and time commitment of litigation, makes it more likely for a new business owner (and sometimes even seasoned ones) to walk away.

How do you deal with this type of client? There are a few things you can do.

First, check to see if a potential client has been involved in litigation. You can go down to the county courthouse (or, in some cases, go online) to see if he or she has been involved in court cases previously. Typically, if the person has been a plaintiff (the person bringing the suit), they claimed to be unsatisfied with the work. While some grievances are certainly legitimate, it can also mean that the person bringing the case was using the court system to gain concessions.

If the person was a defendant, it’s possible that they were sued because they never paid for the services rendered or products purchased.

A review of the county clerk’s files to see whether your potential client is litigious, either as a plaintiff or defendant, can be very enlightening. If you are a contractor, a review of mechanics’ lien filings (which can indicate a lack of payment for work performed) may also reveal a potential client’s true colors.

Second, check the potential client’s credit. You’re probably used to having your credit checked when you apply for credit. But unless you are a landlord, you have probably never checked someone else’s credit. That’s because there are strict limits on who can check your personal credit reports. But those restrictions don’t apply to business credit reports. Not only can you check the credit of someone you are planning on doing business with, it’s a good idea for you to do so. There are several sources for checking business credit:

• Cortera

• Nav

• DNB

• Experian Small Business

• Equifax

You generally don’t need your client’s permission first, unless you are ordering a blend of reports that contain personal information about the owners or principals. The source you choose will depend on how much information you need and how much you want to spend. You can often get a single report for less than $100. It can cost you more than that if you wanted detailed information. But if you are going to spend time or money working with a client, don’t you want to increase the odds you’ll get paid on time and in full?

If you, as a new business owner, see a pattern (or even one instance) of nonpayment and/or litigation, you should probably think twice about taking the client. Or, perhaps, ask the client to explain the situation. (“I see you were sued by Marvin Washington. What happened?”) How he or she answers the question hopefully will give you plenty of insight into the situation. You’ll have to go with your instincts on the response: A calm, reasoned explanation may sway you one way, again remembering that none of us are all that good at identifying the liars in our midst, while an angry or defensive tirade might sway you in the other direction.

Another strategy is to develop a retainer program, if you don’t already have one. You can ask for a 25% to 50% deposit on the work to be performed. The client who objects to this may be the client who had no intention of paying you in the first place, in which case you haven’t lost anything by making the request.

Another strategy is to develop what is called the “imaginary partner.” Many people starting out want to be pleasant and accommodating in the hope of gaining much needed business. In doing so, they will agree too readily to terms and conditions that are not in their best interests.

To slow this process down, and to give the semblance of experience in the business, create an imaginary partner whose approval you need. Instead of agreeing to everything on the spot, tell the client you need to take it back to your “partner” for his or her acceptance of the terms. You can add that your partner has a great deal of experience in these matters and will have a good sense of how to proceed.

This offers several advantages. First, it allows you to save face by not directly saying no to the client. Of course, more experienced business owners have no problem saying no, and you will get to that point. But until you do, it may be easier to make your “partner” the bad guy, which can allow you to come back and attempt to negotiate a more reasonable set of terms.

Another advantage of the imaginary partner is that it takes away the argument many Toxic Clients will use on new business owners: “You’re the president. You can decide.”

While the truth is that you are the president and can decide, sometimes decisions need a little time. I prefer to sleep on a big decision. Sometimes I need two nights’ sleep. I am much better able to decide after a little time has passed.

The imaginary partner (or a real one, for that matter) gives you that time. It allows you to go back and consider things, rather than agreeing to them when you are vulnerable and exposed to what perhaps may be a more skilled negotiator.

To this end, I have worked with a number of clients who are starting their businesses and need to come up with titles for their business cards. We review whether they want to list themselves as “president” or instead list themselves as “vice president” or “manager.” If you are going to use the imaginary partner strategy, having a card listing you as a lower officer fits right in. The card itself announces that there is a higher authority. It can certainly be to your advantage if the clients don’t know that the higher authority is you.

I have other clients who feel they get more respect by listing themselves as president. And that is fine, as everyone’s strategy is different. I would only caution that if you are young and starting out in business, the kind of Toxic Clients we are discussing here will want to see you listed as president. At least do yourself the favor of thinking twice about things when you hear the words, “You’re the president, you can decide.” In that vein, some of my clients who are the president have two sets of business cards printed up. One lists them as the president and one lists no title at all. They use each card according to the situation.

Of course, we have to reconcile one issue in this section on lying and deceit: In the imaginary partner strategy, you are lying. There is no other partner. It’s just you.

Maybe you will have no trouble with it. It’s your business, your baby, and you are trying to protect it from all the other liars and cheats out there. The justification is readily apparent to you.

Alternatively, you can simply say that it’s “company policy,” which technically is not lying since you establish company policies. But it does establish a higher authority that is immutable.

But maybe you need more of a foundation to support this strategy. Well, consider the German approach toward business. In Germany, a necessary lie is considered harmless. Here, the lie—that you have another partner and need that person’s approval—is necessary to protect and grow your business. And if the lie is necessary, which it often is, then it is harmless.

Here’s a final word on Marvin Washington’s case. Early on, Washington had had a funny feeling about the Collingsworths. A little voice said to be careful. That was his instinct. He ignored his gut because he needed the work. The irony, of course, is that by ignoring his instinct he jeopardized his work.

So learn to develop your “lie sensor,” and don’t ignore it when it starts setting off alarm bells.

~ ~ * ~ ~

Lesson #3: Everyone lies. Don’t let a lack of experience make you a target.

~ ~ * ~ ~

Often, people will actually tell you they are lying. Not in words, but in movements.

Think about all the nonverbal cues people throw off. You know them. They include:

• Fidgeting

• Avoiding eye contact

• Rapid blinking

• Rubbing the nose

• Swallowing repeatedly

• Clearing the throat

• Covering the mouth when speaking

• Wetting the lips

• Neck rubbing

• Scratching the head while talking

• Putting a hand to the throat

Many of these movements and mannerisms are crystal clear cues that a lie is being told. The speaker is not clear with their conscience and by fidgeting or the like they are subconsciously telling you so. Employ your lie sensor in such situations. Think twice – or more – about taking on what I call the ‘kinetic client’.

That said, some people are genuinely nervous in certain settings. Introverts may be both honest and kinetic. As in all of our situations, nuance and discernment will benefit you.

Office Politics

Another type of deceit occurs in larger corporate settings, where a significant number of people spend an inordinate amount of time defending their turf. This can be problematic for the new professional walking into it, as our next case illustrates.

Case No. 7: The Graphic Designer

The gaming industry is extremely competitive as it is. But with Indian casinos and new mega-resorts cropping up all over the country in places new to gambling, fighting to lure visitors with glitzy expansions and high-powered promotions, the industry can be brutal.

The Thunderdome Hotel & Casino was preparing to open a new tower, and was eager to capture a bigger market share—especially with younger gamblers. Fresh ideas were needed to completely update the resort’s image as a hip and sexy place to play. The Thunderdome’s advertising and marketing department was staffed with longtime employees too stuck in their routines and habits to be truly innovative. They needed some new blood.

Courtney James, the department director, hired freelance graphic designer Marla Welch, a twenty-something woman who had graduated from a top art institute, was up to date on the latest graphics software, and boasted stellar ad pieces in her portfolio. Welch was given a three-month contract and a desk and computer terminal in the ad department, and was told to freshen up the advertising of the casino’s new look.

Welch was excited that the contract with Thunderdome would give her a financial cushion. And she was eager to tackle the project. She was confident of her skills, and through her freelance career she had earned plenty of solid experience branding companies from the ground up—designing logos, creating business cards and other printed pieces, and developing all the aspects of marketing campaigns. Among her roster of former clients were a touring rock band and the NBA’s Development League.

But if there was one thing she wasn’t excited about, it was working out of the marketing office, instead of from home. That, she knew, meant she’d have to deal with attitude from territorial employees. She had experienced that before. With her short orange hair, green eyes, freckles, and an upper-register voice, Welch’s youthful appearance often caused older people to disregard her experience or knowledge and get defensive about having their toes stepped on. This was certainly the case in the Thunderdome’s marketing department.

One of Welch’s first assignments was to supervise a photography shoot of high-end hotel rooms under construction. The photos would show off the luxurious features—plush feather beds, big HD TVs, heated towel racks, wet bars, large spas, and magnificent views. The photos would be used in brochures, magazine ads, billboards, and other signage. Since Welch wasn’t yet familiar with the casino’s layout, the ad department director assigned Pauly Tufts to assist Welch on the shoot.

Pauly was the man with the most seniority in the department. He was a pudgy man in his 50s who wore polyester clothes and a gold chain, and kept his gray hair feathered; his look instantly screamed “out of touch.” Somehow he had managed to carve out a niche at work, handling all the television and radio buys and marquee designs.

Because of his many years at the Thunderdome, Pauly knew his way around the property. That’s why Courtney, the ad department director, decided to give him a support role as facilitator for the photo shoot. He was to be in charge of the master set of keys and let the photography team and models into the rooms, muster up furniture and towels, and provide whatever other logistical support Welch needed.

Harrison Browne, a freelance photographer, was hired for the day-long shoot. Over the phone, Browne, Welch, and Pauly agreed that the shoot would start at 9 a.m. the next day. “Don’t worry about a thing,” Pauly told Welch in a jovial voice after the conference call with Browne. “I’ll get everything you need. Just show up at Room 1051 tomorrow morning.”

When Welch showed up at the room in the new tower the next morning at 8:50 a.m., Browne greeted her cheerily. The two knew each other from a previous freelance session and had worked well together. “We’re just getting started,” Browne said.

Welch was surprised to see that the lighting had already been set up, but she didn’t make much of it. The shoot got underway and looked to be ahead of schedule.

But Pauly kept trying to take over the shoot. He’d step in front of the camera as the photographer was about to click the shutter, and say, “Oh, let’s do this right here.” He’d rearrange pillows on the bed. He’d adjust the window blinds, affecting the lighting. He’d tell the models how to pose, and his suggestions seemed awkward and inappropriate.

Welch and Browne grew increasingly flustered. At one point, Pauly took his comb from his back pocket and brushed a female model’s hair.

“What are you doing?” Welch cried. “You don’t touch the models!”

Browne finally had had enough. He pulled Welch aside. “You’re the art director. You have the vision here. What’s this guy doing?”

“I don’t know what to do,” Welch said. “I’m so frustrated right now.”

“He’s bugging the beans out of me,” Browne said. “You’ve got to help us both out here. You’ve got to stand up and say something, otherwise this shoot is going to run a lot longer to get what we need, and I’m going to have to charge you more.”

Welch immediately took an assertive approach. Whenever Pauly made a change, she immediately stepped in and changed it back. “Actually, the lighting is this, and we need to have them here,” she’d say. “Do you have a problem with this?”

A flash of anger would cross Pauly’s face, but then his expression would shift to innocence. “Oh, no, sweetheart. Everything’s fine. I’m just here if you need me.”

The next morning, Courtney James called Welch into her office and shut the door. The director was furious.

“I can’t believe you showed up an hour late for a photo shoot you were in charge of!” Courtney said.

Welch’s face flushed. Her jaw dropped. “There was an obvious miscommunication,” she stammered.

It turned out there had been a non-communication. Pauly had secretly arranged for Browne to show up at 8 a.m. to start setting up for the shoot. Of course, Pauly had not bothered telling Welch. But he’d made it a point to inform the boss that Welch had been tardy.

Welch realized she’d been duped.

“Before you yell at me, don’t you think you should hear my side of the story?” she asked the director. “If you want to call Harrison, he’ll tell you we agreed the shoot was to start at 9. He’s a friend of mine. We’ve worked together before. He can vouch for me.”

But James would have none of it. “From this point on, you’re on probation,” she said.

Welch’s head spun. She considered resigning. But she decided to stick it out for the remainder of her contract. She couldn’t afford to get a reputation as having failed on a job.

But Pauly kept up his sneaky attacks. He told James that Welch was regularly late to work. Then, after Welch had designed several logos, Pauly reported to Welch that one of them had been approved for use in advertising going forward. But it wasn’t until, in a staff meeting, when James looked curiously at the ad mock-ups Welch had prepared and asked, “What’s this logo? This isn’t approved,” that Welch realized Pauly had fooled her again.

“Well,” Welch responded, “Pauly said this was approved.”

“No, I didn’t,” Pauly said. A smile briefly flitted on his face. He was clearly playing her.

The stress this created for Welch threatened to make her sick. She was having trouble sleeping and her stomach felt upset at the prospect of returning to work each day. In bed at night, she considered quitting before the contract was up, but feared having word spread around town that she was an unreliable graphic artist, and that no one else would hire her. She had to do something, so she made a decision to take charge of the situation.

Knees trembling and voice shaking, she walked into James’ office and kindly explained that she didn’t need the Thunderdome as a client, but that she was interested in what it could offer for her portfolio. If they liked the look she was going for, James would have to make sure the employees backed away from her and stopped interfering so she could do her work.

Otherwise, she would not hesitate to leave.

By this time, the director had been keeping a close eye on Welch, and realized that Pauly had been up to dirty tricks. She apologized profusely for having exploded at Welch over the photo shoot, and begged Welch not to quit.

From then on, James took Welch to lunch every so often to make sure everything was going OK, and to gain insight into the work habits of her subordinates.

Interestingly, although it took some time, the resort’s general manager had taken note of Welch’s work on the redesign and was blown away. The simplified logo, new colors, updated brochure, the photo shoot … the entire re-branding effort was remarkable. The Thunderdome now had a bold new look.

And when Welch’s three-month contract was up, she was offered a permanent position in charge of continuing the redesign and other updates. Welch accepted the offer, optimistic about the improvements she had seen in the environment in recent weeks, but the arrangement only lasted a month and a half. The work environment continued to be stifling, and the undercurrent of office politics remained dispiriting.

When Welch resigned, the department director understood. “I knew this was going to happen,” James told her. “You are so beyond here.”

Welch had no regrets about leaving the Thunderdome and resuming her freelance career. And she is proud of how she handled the conflict with Pauly.

“What I have learned is that sometimes it takes being honest and harsh at the same time. It’s not about being mean—it’s about staying strong and true to your business. And that’s how you last as a business.”

As mentioned earlier, it’s important to know the lay of the land when dealing with clients. What kind of situation are you walking into? Have you paid attention to the signals and listened carefully? Welch knew that the department’s employees had been there a long time, and that their efforts were stale. That was a sign that people would be resistant to the change she brought with her.

Are you headed into a situation where the client will try to take advantage of you because you are new? Are you headed into a politically charged environment where employees are trying to protect their jobs, and will tear you down to build themselves up? Liars and cheaters are everywhere. By knowing the political and ethical landscape you are in, you will be more able to anticipate them.

Your lawyer, accountant and other professional contacts may also know about the reputation of certain clients. While attorneys have ethical rules as to talking about their own clients, many know the reputation of their non-clients. And most other professionals are aware of the bad actors in town.

Case No. 8: The Excavator