Standard Forms and Contracts - The Graphic Design: Reference and Specification - page 190

7. Profit Participation
The designer agrees to be paid a certain fee, typically lower than his or her standard
practice, but in addition receives profit participation in the client's business. This ties
design effectiveness to sales and business results and is another good strategy for
startup clients or new products the designer is intricately involved in creating.
8. Trade
The designer is paid in-kind with client services or products instead of with money. Such
barteragreementsworkifaclearvalueforthedesigner'sworkisestablished.Make
surethedesignistradedforthewholesale(notretail)valueoftheclient'sserviceor
product.
Rights and Compensation
One thing designers must consider in terms of money and design is ownership of the
work being created. Who owns what, and how the work may or may not be used, is a
negotiating point that also has financial implications. This concept is tied to the design-
er's intellectual property rights and the client's right to use the work they commissioned
the designer to create.
Intellectual property
Intellectualproperty(alegalreferenceto the creations of the mind: inventions, liter-
aryandartisticworks,etc.)isdebatedbylawyersworldwide.IntheUnitedStatesand
Canada, for example, all creative work is owned by its creator until the creator transfers
ownership in writing to someone else. This is the cornerstone of copyright protection
(legalprotectionthatgivesthecreatorofanoriginalworkexclusiverightstousethat
workwithinacertainperiod).Othercountriesmaytakedifferentviewsandhavediffer-
ent laws, so designers must understand what is true and legal in the country in which
they practice design.
There are some complex rights and usage agreements that can affect a graphic
designer. For example, in the United States many clients require designers to work
underawork-for-hirecontract,whichisawritten(notverbal)legalagreementbetween
the designer and client stating that the client owns all work developed by the designer
under the contract. In essence, it legally makes the client the creator of the work and
affords them all the related rights of a creator. This isn't a bad thing, but it means the
client is now undisputedly the owner of the work. As such, a designer might want addi-
tional compensation.
It is important that the designer and client know who owns the work and how it may
be used. For example, when a client owns outright an illustration that a designer devel-
oped for a pamphlet, the client can use that image in any future advertisement or on
their web page, without paying the designer anything additional. Therefore, a designer
would want to charge more for this kind of complete transfer of rights and ownership.
Alternatively, it could be a negotiating point: Charge a lower fee, but the client has
restricted usage rights for the work.