Lately I've had a lot of speculative work, or spec work for short, come my way. The most recent one was a business who were interested in me to create illustrations for their next app. They wanted me to submit 5 samples and if they liked them, they would continue with me not understanding that time is money and freelancers have expenses too.
Logo contests are big in speculative work. There will be one client with a general brief and awarding the designer with the best logo. The average "prize" is anywhere between $99-$300. This is bad practice for both designer and clients. Most of the time a client will not get educated from the designer. They just liked the logo but don't know why. The designers will rush the design to the pool of submissions in hopes for the same prize. If you are a designer practicing this, shame on you as you are only devaluating yourself and other designers as well. A good logo requires briefings, research, roughs, feedback, and usage application.
Be aware of phrases such as "the work will give you exposure" or "we don't have a budget yet but" or "if it kicks off then you will be awarded". Those are signs of spec work. It is our obligation as designers to educate our clients for any work to be done and lets say NO to spec work!
Below are links to spec work resources: