I've been freelancing for the last five years. I do web dev, so it might be different if you're a write or graphics designer or game programmer or whatever.
Really, however you and the folks you work with want to structure your work is how it is. There are things that are worse for you and things that are better for you, but it's a question of what you and your clients what more than anything.
As to the stability of contracts, they are only as good as the person signing them; generally if someone has given you money as a deposit, then there isn't a question about if the signature is binding, but rather what different parts of the contract might mean... the meaning of "functions in most browsers" or "has an easy to use method for adding XYZ" is really where you should be sweating.
That's typically the issue: usually the people I work with want things to be working well and done correctly, on a predictable schedule. Delaying delivery until payment is made is one strategy. A better strategy is to work with people and businesses you can trust... if you have a contract and there is no question about the quality of the work, generally enforcing a contract isn't something that requires lawyers.
The facts about negotiation apply to your rate: if your client will pay you $500/hr, then that is what your time is worth. Instead of worrying about what it is worth, worry about what you have to make in order to do the things you need to do (or, if you prefer, what your rate needs to be so you don't have to go get a job).
Generally, clients (end users, not, for instance, agencies) don't like hourly pricing for the same reason that I like it: it transfers the liability for additional changes or unforeseen troubles with the agreement.
So you might find that you're better off with fixed pricing, which involves knowing what your hourly rate needs to be and how many hours you expect will take to do the work, plus the cost of acquiring the client, plus a hedge for unforeseen work that will need to be done without issuing a change order. Multiply that time three, and then you'll probably not get too screwed by a contract :D
Really, however you and the folks you work with want to structure your work is how it is. There are things that are worse for you and things that are better for you, but it's a question of what you and your clients what more than anything.
As to the stability of contracts, they are only as good as the person signing them; generally if someone has given you money as a deposit, then there isn't a question about if the signature is binding, but rather what different parts of the contract might mean... the meaning of "functions in most browsers" or "has an easy to use method for adding XYZ" is really where you should be sweating.
That's typically the issue: usually the people I work with want things to be working well and done correctly, on a predictable schedule. Delaying delivery until payment is made is one strategy. A better strategy is to work with people and businesses you can trust... if you have a contract and there is no question about the quality of the work, generally enforcing a contract isn't something that requires lawyers.
The facts about negotiation apply to your rate: if your client will pay you $500/hr, then that is what your time is worth. Instead of worrying about what it is worth, worry about what you have to make in order to do the things you need to do (or, if you prefer, what your rate needs to be so you don't have to go get a job).
Generally, clients (end users, not, for instance, agencies) don't like hourly pricing for the same reason that I like it: it transfers the liability for additional changes or unforeseen troubles with the agreement.
So you might find that you're better off with fixed pricing, which involves knowing what your hourly rate needs to be and how many hours you expect will take to do the work, plus the cost of acquiring the client, plus a hedge for unforeseen work that will need to be done without issuing a change order. Multiply that time three, and then you'll probably not get too screwed by a contract :D