yikes.... this is some bad advice... follow it at your peril
...truth be told I have never stood in the way of handing over original artwork files, we have been running nearly 4 years and have solid client relationships with those we work with... It's just this new client is annoying me, it's the first project with them...
For example: (Ripped from a thread somewhere online)
1) I dont know any professional designers who will supply unflattened or project files for the standard fee. I do broadcast design and some print, and unless a client is willing to pay 3 to 5x over my standard rate, they have no chance of getting the project files. Supplying the project files gives the client the chance to reverse engineer them and make endless variations to use for free. You also run the risk of the client making you look bad by royally screwing your design work in the process.
2) This is true. No GD should hand over the master file without a hefty fee. If they do they are fools. The master file is all you have as leverage to get paid as well as get more work. When a company/client hires a GD to produce graphics they are ONLY paying for a final image, Not the editable master file unless it is specifically agreed to in a contract. Handing over the master file almost guarantees no more work and in some cases not getting paid.
Having read that I feel indignant at the idea of "handing it over".
But the replies in this thread resolve that I believe.. Almost...
BELIEVE. Good clients are hard to find. Sounds like you have your doubts about this new one anyway. Bad clients on the other hand are "easy" to find. They are the ones who want to see stuff on spec, chew you down on price yet make endless revisions plus tack on little mini-projects (included in your original price), are slow pay, or worse no pay. They are easy to find because they are constantly using new, naive designers, who are lured in by the promises of greater workloads (that never materialize).
Do not begrudge them the work, and its working files. They are not just hiring you for the end result. Likewise, if you worked for an agency... the working materials would "be theirs" along with the finished product. If you want to be so persnickety about ownership about working materials get it in writing ahead of time (but I can't think you will a lot of friends, or long-term clients that way).
The "advice" is common, and it is very old school. Photographers used to use it when selling stock, or for jobs where the clients wanted the originals. That may have been great back in the old days of film, slides, pasted up layout boards, or stripped up film with it's separations imposed. Everything is digital now. It is normal to try and get more money for what used to be of a great perceived value. Remember, at that time "cheap" stock images were $100 each, and not a few bucks.
Playing games by providing flat files, or finished PDFs is poor form. Furthermore, for those "grunts" on the other end you are making their lives unnecessarily difficult. There are plenty of reasons they may need to go into the working files (and it isn't to make you look bad). This of course assumes you can make a lean and proper file to start with. No offense meant there, but I am in a situation where I am on both sides (I both create materials and send them to other publications, and also use supplied files from other agencies and designers in publications I produce). You would be surprised how MOST of the files I get in from "professionals" are a mess, and poorly constructed. RGB artwork not converted over, Trutype or crappy/questionable fonts, Artwork hugely scaled up (or down), and a myriad of extraneous boxes, etc.
You are NOT foolish if you hand over materials, as they are NOT your only leverage for additional work (or getting paid). What a load of crap, this business is really about relationships and rapport. Repeat customers are the ticket to long-term success and survival. Repeat can mean once a week, once a month, once a year... etc. As long as they come back and to you, you don't have to search out some one else to pay you the $100, $1000 etc. If they only have that one little need, and you provide them a good value, they will come back to you. If they like you, they will tell others. All of my business is either repeat business, or word-of-mouth. I have not had to cold call for customers in the last 8 years I have been on my own. I consider myself fortunate. Picking up work from "professionals" who dispensed those two pearls of wisdom would be easy pickins, as you can pretty much feel the contempt/disdain they have for those who pay them for their talents.
If the client just uses you for the working files and has no intent of furthering the business beyond that, you don't want them anyway. They are a lousy client and you would be better off without them...
I won't touch the issues of embedded stock or fonts. The legalistic answer would be they would have to purchase their own font versions, and likely the stock as well (if it was reused for other needs).
cheers,
michael