Matasano has many clients we've maintained since the formation of the company in 2005, and many more where our counterparts in those companies are friends. The idea of doing business with any of them sans contract is unthinkable. It just doesn't happen.
Working without a contract is unprofessional. Don't do it.
1) The dollar amount of the dealings greatly matters as well as the product or service being sold (and who it is being sold to and past history [1]). Matasano is a "real" grown up company. I would imagine the dollar amounts of the charges for what you do are not trivial or small in any way. "not freelance". And what you do has liability consequences as well if you screw up. And you have deep pockets to go after and a liability policy with pockets. [2] A contract of course is called for. Our accounting firm (been dealing with for many years) was just bought out by BDO. They sent a contract or rather a letter of understanding "whatever" that absolves them from any and all liability no matter what. This is after many many years of dealing with the firm they acquired. The legacy firm sent the same letter. Totally ignored it and never sent it back year after year. (Almost as a dare "ok we'll replace you!". They didn't take it personally at all. And if they did who cares?
2) Title of article appears to be targeted toward freelancers. Hence my comments. I'm not directing my thoughts toward Boeing (or Matasano). In other businesses I've dealt with freelancers (non computer, graphics basically) for many years. They do work you pay them. They give a quotation for the work and tell you if you exceed any limits and that it will cost more.
3) Using contracts puts friction in the process and gives people (on certain things, once again, smaller things) a chance to back out and think and delay. So to me there is a certain balance of risk that a freelancer takes (relative to the situation) vs. losing the sale that has to be weighed. Each situation is different. What's the up vs. the downside?
4) Unprofessional is relative to who you are and what you are selling of course. There are many business relationships that are done on a handshake in certain industries. I've been involved in many of them.
5) If you do (for whatever reason) use a contract and the other side doesn't want to sign it I agree that can be a red flag. In general. Once again, depending on the dollar amount. I had a domain broker come to me with a buyer for a domain name that I owned and they sent me a 10 page contract. I said "I'm not reading and reviewing that if you have a buyer I will pay you commission". They said "ok sounds good". And the deal was done and I have the money in the bank. Otoh I sold a domain to a very well known attorney (someone I knew that is well known in the business and everyone loves and even went to the same college) and I waited like 3 months to get the money. Go know.
I will end with a funny story. When I sold my first company a long time ago I asked both the accountant and the lawyer for an estimate of the legal and accounting charges. They both shot me numbers verbally over the phone. After the deal was done I got the bill and it was 2 to 3 times as high as the quote. So I said "you quoted $x what's the story?". They said "oh it was more work". I said "well you should have told me that, how would I know?". The accountant stayed with the quote and is the firm I've referenced above that I am still with to this day. The lawyer thanked me (he had just gone out on his own and left a big firm and had no clue about smaller clients or billing or people using their own money) and told me I had taught him a valuable lesson [3]. He then bought some computer gear from me (to give you an idea of how long ago this was it was a $4500 laser printer). Just to show you that he really was cool with it.
So it wasn't lack of a contract as much as lack of communication possibly that sunk them. And of course had they billed as the work was going on as opposed to all at the end they would have put me on notice despite the original quote (which by the way was stated like a firm quote..)
[1] Which of course is tricky because people and companies change their spots.
[2] As opposed to Dave, out of his house, living from hand to mouth. Nobody is taking "Dave" to court if he screws up.
[3] So in other words he wasn't used to anything but a larger company using someone else's money not an entrepreneur spending his own money.
A quote sets up a reasonable negotiating point and then any deviation from that can be discussed. The client eats it or the worker eats it. You win some you lose some -- at least things are moving.
Let's see how you view this.
a) Client comes with a rush job and asks you to quote the job and you do. You give them a price.
b) Same clients comes to you and says "just get the job done and bill me whatever it is. I need to get this done."
My question to you (or anyone else) is "under which situation did we end up making more money, "a" or "b" usually"?