Ok, let me rephrase: when I say freelancing doesn't turn into that sort of relationship I mean that it doesn't turn into the sort of relationship where you have trust with clients and can say "sorry it's going to be late because". If you want those sorts of horror stories as described in post 10, freelancing will definitely give you one in very short order.
before I go into the rest of this let me just say that 99% of the people who freelance don't have these sorts of problems 99% of the time, but it will happen at some point and you do have to be prepared for the worst.
In normal employee land, you can be fired but being fired still gets you paid for the work you did because employers can't go "we fired you and also you're not getting this month's salary". far as I know that's illegal. You also have to really go all out before your employer will sue you or something. In freelancing land, you don't have these protections. It depends what your contract says, but usually there will be clauses and things in the client's favor to the effect of "if we get really unhappy you have to give the money back" or what have you. It also depends on jurisdiction and some other things, but "if you don't meet the deadline we can sue you for $100000" is actually the sort of thing that can end up in your contract for example. It'll be phrased something like you promise January 17, not having January 17 is a breach of contract, on breach of contract you owe us $100000 in damages. I'm simplifying but the effect is the same. Obviously when you're small you can just walk away from the really bad contracts like that of course--they can't force you to sign.
When I did this, and also from my friend doing it now, the most common thing is you end up doing a few weeks of work for free, but if you're up against someone with the money they can just sue your ass out of existence if you make them mad enough no problem. We had one client seriously threaten that. They don't have to win, they just have to out-money you. In all seriousness don't work for lawyers, out-moneying you for them is free.
In normal employment land, firing is the worst bad thing that can happen to you. in freelancing land, firing is the *best* bad thing that can happen to you.
You want to be behind an LLC and with the corporate veil in place. If you aren't then the worst bad thing that can happen to you is you get sued for $100000 or something and the judge says "sorry, you didn't have a corporation in place, better sell your house". I'm not kidding. That can happen to any small business that's not using a corporation of some sort. Fortunately at least in the U.S. they're like $300 a year and you can start one by filling out an online form in 20 minutes, but there is some overhead. basically the more you run your LLC like a proper business the better off you are: you definitely want a business bank account, you probably want to consider paying yourself and recording what you paid yourself, and you should probably talk to a lawyer because I'm a programmer and this is really important to get right. If you have all of this in place, then the worst that someone can do in the vast majority of cases is take all your business assets. If you don't, then your personal property and personal finances can also be seized by lawsuits and the like and you can *literally* end up with not a penny to your name. Fortunately this is very very easy to avoid.
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