> The opportunity cost of pursuing this is huge. Cut your losses at 100 hours and spend your time looking for new clients.
The strategy of cutting losses and not retaliating might seem rational and it is - in the same sense as overgrazing in the tragedy of the commons is. If everybody chooses this strategy, then it becomes rational to screw anyone for 99 hours pay (and switch to another sucker.)
He can go public and warn folks if after three written interactions they acknowledge that he delivered the work but refuse to pay or give a timeline for payment. Has the same effect as spending a lot more time on a client that will never be a reference.
Also, read the book, there are a number of things you can do to manage your "credit policy." Essentially you are loaning the customer N hours of work: if you look at it that way you may engage differently.
Finally, life is short and getting screwed out of 100 billable hours is not the worst thing that will happen to you even in a two or three year period.
I definitely wasted a lot of time and emotion on this. But it felt quite good when they actually paid :)
If I did end up in a similar situation again, regardless of what precautions I took, I think I could at least attempt to pull the same thing off with very little time/effort, having the knowledge of the process that I do now.
Btw, once I realized they weren't paying anytime soon, I of course did go ahead and find another gig (which actually paid).
Spend $5 and buy a used copy of "The Check is Not In the Mail" http://www.amazon.com/Check-Not-Mail-Without-Customers/dp/09... it will give you a number of suggestions for how to structure an engagement to avoid some of the problems you faced here.
The real warning sign on this was the inability of the company to set a date for a partial payment, telling you to "be patient" instead.