Friday, 18 September 2015

Adverse Selection And Information Asymmetry

The best example of 'adverse selection' is when you get life insurance with the intention of committing suicide so that your family can get the benefits. We have laws on the books against that sort of thing, which means it must have become popular at some point, before they cracked down on it.

A less clear-cut example is when you get a policy that you know you're much more likely to cash in on than the average person. Someone looking from the insurer's perspective could be at least tempted to see it as something unethical and abusive. On the other hand, from the buyer's perspective there could be nothing more to it than taking advantage of what looked like a good bargain.

Non-insurance examples could include buffet lunches, all-you-can-eat bars, all-inclusive holiday trips. The price charged represents the average expected cost plus some margin. Some people will eat less, some will eat more, in the grand scheme of things it'll even out.

Similarly, in translation the rates tend to be more uniform than the amount of time needed by each individual translation, which is very difficult to predict up front and varies from one translator to the next to boot.

There is no question that to make your business smoother and more secure you need to learn to spot potential time suckers and learn to at least plan for contingencies, not overbook your calendar when one of your projects has that kind of potential, perhaps negotiate higher rates or switch to hourly billing.

This is something translators usually learn in the first couple of years.

However, I would like to call your attention to something more disruptive, more dangerous: problem jobs.

You don't have all of the information the client or agency has.

Perhaps you can recall, from your own experience, a situation like this:

They send you an attachment and ask you to confirm ASAP, which leaves you a short window and a lot of pressure. You mumble something, grudgingly, about them owing you one or needing to plan better, next time. Or you make it clear there isn't going to be any next time, only this once. Then you say the fateful words: 'okay, I confirm' and with the stroke of a magic wand the problem is now yours. Moments later you discover just how long the OCR or file repair is going to take — or you see the one bajilion tags surrounding every letter in the bilingual file in a CAT job. And an X-Bench/CAT QA report is required for those tags. Or the quality of the original is passably good initially, but deteriorates steadily until you no can no longer keep guessing whatever the thing was supposed to mean.

That's not the worst of it, actually. Sometimes a server is involved and that server goes down. Or someone's input is critically needed and that person suddenly becomes unavailable. Or just after you start the job they are afraid that whatever they had promised you to coax or cajole you into accepting is not actually possible. Or they unload some more reference material or client requests on you.

Unless you started a couple of months ago or you've been extremely lucky, you've probably had a couple of your own war stories like these by now. Well, now is the time to connect some dots — or at least as good as any.

I don't want you to become paranoid and see a trap in every single more-than-average complicated job you are offered by someone desperate. But I would like you to be cautious and safe. Better safe than sorry.

Here are some pointers:

  • The client or agency wants you to accept quickly and really wants you to accept the job. Unless you have good reasons to think it's about your unique skills or reputation for reliability, there can be a good reason why the want the job out of their way.
  • The client or agency wants you to accept before you can inspect the file(s) and any additional information. They seem to be rather secretive and — especially — deflect or ignore requests for information. That means there's a chance they don't want you to have that information — and why? A high probability is that's because that information could make you decline the offer. Or perhaps they themselves don't really know what's going on.
  • Technical problems with the files and little help from the client or agency when you mention it. This is an especially high risk with agencies which make it clear in your contract that once you accept a file for translation, any and everything relating to it becomes your own responsibility.
  • Any such problem should be a huge red flag with any agency whose contract or PO contains a stipulation that by accepting a job (a file) you are guaranteeing that it is doable. If the contract goes as far as saying that you 'waive' (give up) the right to 'rely on' (invoke, in your defence) any problems with the source, with the client's or agency's conduct etc. — then run away for dear life.
  • The same refers to sloppy writing in the source, especially in those huge files that have multiple different authors, sometimes all of them non-native and unedited.
  • Again, that sort of thing becomes several times more dangerous wherever there are the clauses in the contract about how everything becomes your responsibility and nothing is their responsibility any more after you accept. 
  • You should also be very helpful if someone is imploring, pleading, practically begging — but at the same time the paperwork is adversarial, hostile, there is small print in it or some dense legalese you don't understand, anything which you already suspect might be a trap.
  • Anyone who has done it once or twice and without remourse is likely to do it again. Don't judge them, but don't rely on their word for anything important, either.
  • If you work with agencies and your rates are significantly above average, then the agencies probably know of at least a handful of cheaper providers. The fact that they are turning to you — and this also applies to direct clients who have found you too expensive before — may in itself be an indication of a compelling reason to do so, which is not always as simple as wanting better quality from now on or better quality for that particular text than in most other cases.

Remember that to some people deceit in negotiation is fair game — and only the final outcome counts. That means some people will manipulate you into accepting a bad deal but will still very much believe you to be — legally, ethically, morally even — bound by that deal. That's how life works for people who believe themselves to be somewhat special. To some extent, most human beings believe themselves to be somewhat special.

Some players justify their cheating to themselves while expecting others to play by the book. In their mind, legit or not what counts is that they win (and in some of those minds it's legit even if they cheated). Alternatively, whoever can't play as skillfully as they can is fair game.

You need to be prepared to encounter that sort of character flaw in people who aren't in full consciousness trying to set you up. And, among hundreds or thousands of prospective and actual clients, someone will eventually try to consciously set you up with a bad job, too.

On the extreme end of the spectrum, scammers or desperate people scrambling for damage control may be looking for someone on whom to dump a translation/localization problem that already stinks, or a problem that isn't even a translation/localization problem in itself but can be transferred to a translator if you manage to make that translator unconditionally responsible for the quality, condition, usability etc. of the target file or for the achievement of a specific, set goal.

Remember that people who want you to give them broad and far-reaching guarantees are probably doing so because they know they're going to need them. You don't obtain such things because you don't need them, that would make no sense.

A word of practical advice: In a crisis situation it's easier to stick by rules you've already made before, with a cool head, than to make up good rules on the spot, when you're hot-headed and emotionally agitated.

Hence, you may want to develop and adopt some safety rules for yourself. For example:

  • Never make final decisions on the phone.
  • Keep a written record of all arrangements.
  • Never decide before seeing all of the source and reference files.
  • Don't take a client's word on anything which affects your ability or willingness to accept the job or the pay, get a signature on paper instead.
  • Don't accept any oral changes, amendments or supplementations to a written contract or PO. (Even if they are actually valid, proving that they existed is going to be a whole different challenge.)
  • Don't accept tech-intense jobs with short deadlines without processing the files through your CAT tool and making sure that they load and save (import and export) without errors.
  • Don't accept a job with a mandatory client glossary or TM (translation memory) before you carefully inspect the quality of that glossary or TM.
  • Don't accept a CAT job on an OCR file without checking out the tags in the bilingual file first, especially if you are required to keep tags intact or report on any deviations (e.g. X-Bench reports). CATs and OCR files don't work too well together.
  • If your software is not the newest available (e.g. Trados 2014 now that Trados 2015 has come out; MS Office 2010, now that 2013 has been around for a long while), don't accept a job before making sure your software is not too old to properly read and write the file (without damaging the layout, too).
  • Be extra careful with clients who have been unreliable before and not quite sorry for it. Especially anyone who's known to have lied to translators before.

You may need to train yourself to be a bit more resistant to the emotional pleas of people who you can already say are not being entirely open or fair with you from the get go. This may be a challenge, but it'll be easier if you know their own tricks or common negotiation tactics and if you allow yourself time to think clearly about the requirements of the job before you make your decision.

Also, don't shy away from demanding the inclusion of express conditions in the PO. This essentially means committing them to their promises on paper, with a signature. For example you may want to include the reservation that the deadline is guaranteed and the agreed fee is sufficient only as long as their assurances are true. You may want to have their signature under a disclaimer of your responsibility for things you don't want to be responsible for. For example (just a few):

  • Undisclosed expectations.
  • Fitness for undisclosed purposes.
  • Special or consequential damages of the likelihood of which they didn't inform you.
  • Technical and formatting issues resulting from processing an OCR-ed file with a CAT tool.

On a final note, once again, be very careful with people who are itching to get rid of the responsibility for their own or their own clients' files. Be extra careful with with agencies whose contracts make a point of how you're going to be responsible for each and every kind of problem imaginable from the moment you accept the job, or how — by accepting the job — you supposedly guarantee that the files are correct and the client's instructions and requirements are achievable and professionally sound (let alone sound from a business or legal perspective) etc.

That is, unless you're prepared for that sort of game. Some translators don't mind. Apart from naïve youngsters, those are seasoned old salts who are confident in their ability to detect, avoid or fix any kind of trouble, down to fending off any unjustified complaint or lawsuit. Even so, overconfidence is a great enemy.

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