Need advice, client wants cut of my money from other client..

[Mark]

Hi,
For the last 2 years I've been developing vehicle tracking/telemetric
software for a company as a self employed individual. The project is
quiet big, and is going to be there flagship product. Since I had no
other work at the time, I agreed to a low rate when I first started
which was £100 a day. The project started small, so it was only going
to be for a few months, and I badly needed the money. The project soon
balooned into something huge, so here I am over 2 years later, still on
the same pay.

Now, another company has asked me to do similar work, but on a much cut
down basis. Infact, its only 2 months work roughly. They found out
about me via the supplier of the unit because he knew I was interested
in finding more work, and I have become very much a specialist of the
device in question.

The first company has found out about this, and has said they are very
unhappy about it and it may jepordise our working relationship. They
have suggested that I use some of the code already written and give them
a cut instead, and I'm somehow in the wrong if I don't. They've said if
the product does well, I'll do well out of it anyway. I think that is
some backhanded way of saying that if I do this, I will not reap the
benefits if the project does really well.

Now, I have leverage, because they need me, I know the project inside
out and nobody else has managed to come this far with the module in
question, and it'd be hard for someone to take my place, plus they
cannot afford to pay someone or a company more money; I am in my opinion
vastly undercharging for the work I am doing for them which is complex
embedded software, plus server software. Unfortunately I have a
conscience... They already have some clients using it, and have about
60 units out there, and there is money coming in from the project.

Should I even be entertaining giving them a cut considering they've done
damn well out of me already for how much I've been charging. What do
people think about this?

Cheers,

Mark.
--

[Karl Heinz Buchegger]

Mark wrote:

Furthermore, the term "conflict of interest" keeps popping up. I have
learnt a lot from doing this project, and I guess in a way I'd be taking
what I've learnt to this other project, while still doing the first
project. Would that not be unethical?

This is a problem you will always have.
You always learn new things at a project. Does
this mean you are not allowed to switch company?

In your case the answer is a sound: 'No'.
You 'paid' for that 'education on the job' by accepting
a lower rate.

--
Karl Heinz Buchegger
kb******@gascad .at

[Stuart MacMartin]

1. Who owns the software? Presumably them.
Unless you arranged otherwise. Check your agreement.
So if they let you use the software, they're entitled to a cut.

2. Can you develop for a competitor?
Again, depends on your agreement.
If you agreed to not do any work for a competitor or on any
related project, but instead did work for them essentially for free
and with no stock options, it's time to renegotiate your contract.

If you didn't agree not to do similar work for someone else, then
conscience doesn't come into it. Either they renegotiate with you or
you're free to do what you want.
But I'm not a lawyer, so my word is worth nothing.

Stuart