Most people who have worked as freelancers for a while will have a story about a client who never paid. Often freelancers just do not have the time to think about getting a lawyer or writing a contract. Indeed the costs of getting a lawyer involved usually outweigh the risks for most freelancer engagements.
However many times, all the freelancer needs is that the client understands how they roll: the terms of how they engage. To avoid getting burned, I require my clients to either prepay the hours or sign my terms of engagement.
The NZ SSC has rejected Microsoft's offers for a new licensing contract. This is a big loss for Microsoft (Though I'm sure MS would have you believe otherwise and try to paint the picture back to front) and big win for NZ Government and NZ's IT industry.