So I've read a lot about giving source files AFTER the job is finished, but I've started a project with a new client and gave them a PDF of the first draft (presentation deck). However they are asking for the source files right away - I worry that this is a bad move because I haven't been paid yet (they pay at the end) and what if they decide to take what I've done and give it to someone else? They are a marketing firm with plenty of designers on hand. Advice?
If you signed a work-for-hire contract, or a contract which explicitly states they own the native files. Then okay.. it's not normal, and it's something many savvy clients want. So, if you agreed to it, you agreed to it. You can't keep them from the files.
But that's not really the question here.
Business has to work on some trust. So while things may sit uneasily for you in this instance, you did agree to provide the files and if there's no stipulation on when those files are to be provided, it's a matter of negotiation.
If they want source files before work is complete.... ask them about it. Explain that you are concerned about littering communication and deliverables with preliminary, incomplete files which may or may not be in a workable state moving forward. Explain that you would rather complete the project and then forward native files with your invoice when the project is finished. This provides you the opportunity to clean up and prepare the native files so that they are more manageable at a later date should they edit them themselves. However, if they are still adamant about wanting files, give them the files. That's what you agreed to do. Any notable resistance on your part will not be favorable in terms of client relations.
Don't approach things with the mindset that "They are going to rip me off." Give them the benefit of the doubt (mostly because you already agreed to it).
Ideally you'd have a clause in the contract which implicitly states that native files are only delivered upon full payment. However, if that's not the case... you're on even terms -- they have as much right to the files as you have to payment.
Is there a chance they'll take your files and run? Yes. Can you prevent that? Probably not. If there's no contract clause about receiving payment before files are delivered, you should deliver files when asked... and learn from the experience to negotiate better next time.
This is one of those things that just makes you cringe for agreeing to something before thinking it through completely (I've done it and learned :) )... you have to put your head between your knees and hope that they are a trustworthy business and no bomb goes off.
That is the whole purpose of them hiring you. When you get paid in FULL, they get the source files. Nothing complex, nothing personal, that is how graphic arts BUSINESS works.
Simply explain to the client that the purpose of the PDF is to discuss the work and any changes that need to be made, and once you have received FULL payment, you will gladly hand over the files. If they are a marketing firm with plenty of designers on hand, they FULLY understand the situation. STICK TO YOUR GUNS, keep all files until payment. OR suggest a "pre-completion" deposit of 3 times the payment price, refundable upon full payment at the end of the project. Then, if they take the files and use them, you keep their deposit...