Over the last couple of weeks I've heard a lot about the closure of All Romance ebooks, which has evidently is going to cost a lot of writers overdue royalty payments. I don't know enough about the facts or circumstances to comment on what happened, but any time writers end up losing money they earned I sympathize. I hope everyone affected by this manages to recover and find new and more reliable venues for their work.
As a freelancer I had to part ways with a client who offered to pay me royalties instead of my contracted fee. I accept only flat fee work from my clients, one project at a time, payable on delivery. Until I get paid for the last finished project I don't do any new work, either, which keeps my risk minimal. This also makes my income reliable, and keeps both sides honest and happy. As much as I liked my former client, I am an independent contractor now. I have no desire to go back to hoping I get a royalty check and that the figures are authentic.
My line of work is not a gold mine; I don't make income ad infinitum with flat-fee, on-delivery, per-project contracts. I sign over all rights to the work to the client, so there are zero royalties. When the work is done, I'm paid in full, I'm finished, and I move on to the next project. These are some of the reasons that writing for hire is not for everyone. You have to go into the project knowing that once it's finished, it belongs to the client entirely. I'm fine with that (I prefer it to byline work, actually) but for some writers this can be very difficult.
How you profit off the success of writer for hire work is by repeat business. What makes money for your clients creates more new jobs for you. Once you have a list of regular clients who will pay you well to continue writing for them, your income stabilizes. That means you don't have to hunt for new clients or go for weeks or months with no money coming in. It doesn't happen overnight -- it took me two years to build my client list -- but if you're picky, and only work on projects that interest you with people who inspire and respect you, you can make a decent, reliable living.
There are other benefits, too. A freelance writer doesn't have to pay 15% to an agent to get work, or wait months on an editor in NY to make a contract offer, or wonder when royalties will be paid, or if they're even accurate. If you go flat-fee only, as I have, you don't have to deal with royalties at all. In time you can even forecast your income by advance bookings; mine presently stretch to the end of 2017. I'm not being smug about that, either -- I've worked very hard at making this gig work, but there's always plenty of competition out there. As a freelancer you have to keep giving your clients the best you can, or they will dump you for someone better.
Sometimes taking a different direction can change everything, too. All I ever really care about is the writing, and making a living from it. I have always written very fast, and once the work is done, I always want to move onto the next thing, too. That's why writing for hire was a perfect fit for me; I just didn't realize it until I left traditional publishing and went 100% freelance. So if you're starting out, or considering making a radical change as I did, first think about what you want, and what you're willing to do for it.