What are your subcontracting policies?
This page is specifically addressed to contracting houses. If you are a contracting agency, there are several important policies that you need to be aware of if you want to approach me about a contract position. Please read this entire section carefully before contacting me with any project details.
Traditionally, contracting houses have viewed contractors as their employees, when the actual nature of the relationship is really that the contracting house is more of an agent acting on behalf of the contractor. These policies are written in that spirit.
Payment Disclosure: As my agent, your contracting agency negotiates fees on my behalf. The final decision on the rates appropriately belongs in my hands, as the service provider, and, of course, an equitable sharing of the billing must also be agreed upon between us. Both conditions require full disclosure of the amount being paid, by the client, for my services.
Direct Contracting With Past Clients: I reserve the right to contract directly with past clients, even if an outside agency happens to make me aware of a new writing requirement of which I was unaware.
Contract Negotiations: I take legal matters seriously. Just as you took the time and effort to prepare your contracts carefully, I take the time to review them. Please be prepared to negotiate the fine points.
Work Schedule: I work flexible hours, and when possible, part-time hours. On weekdays, I typically do not work between 3:30 pm and 8 pm Eastern time (GMT -5).
Owner-To-Owner Contact: It's important that I know I can have direct contact with the owner of your business—or, if you are a very large contracting house, then at least a senior-level principal—should important issues arise.
Because these terms are unusual, they merit further discussion. What follows is partly in the spirit of simple clarification, but also constitutes a discussion of some issues in business ethics as I view them.
- Full Payment Disclosure
Any time I provide writing services, my primary business relationship is with the end-client (but we'll just say "the client", for short) to whom I provide the services. As such, it is appropriate that I determine the fees that I will accept for the job. While I do have a "typical" billing rate, I reserve the option to charge higher fees if I judge that my particular qualifications and background are especially suited to the client's needs. On the other hand, to get a foot in the door, I may occasionally agree to lower my rates, on a short-term basis, to establish an initial relationship.
Either way, it's obviously essential that I know the fees being paid by the client. Further, of the total payment made by the client, the distribution of that payment between your agency and myself needs to be fair and equitable. The amount of your percentage can be negotiated, but, once again, full disclosure is essential. In the spirit of "Trust, but verify," it is appropriate that I be able to verify this amount directly with the client.
- I am not trying to dictate, but negotiate. From my point of view, any fees paid for my services are not the broker's privileged information, they are reasonably our shared business information. I'm the one doing the work!
- You may prefer that I state what I consider a satisfactory fee for my services, and any amount billed on top of that is not my concern. But in fact, the definition of a "satisfactory fee" is always contingent on what a client is willing to pay for a given job — and for a given contractor. Consider other fields, such as sports, film, or publishing. If an athlete/actor/author gets $100,000, the agent gets some fixed percent (10% or 20%, whatever it may be). If the athlete/actor/author proves to be exceptionally talented, and the sports team or film company is suddenly willing to pay $1,000,000 for the same person and their skills, would it really be fair for the agent to walk away with $910,000, and the person actually doing the work to only get $90,000? Viewed in this light, it's pretty preposterous. The talent still gets 80% or 90% of the total, and the agent gets the remainder.
You provide a service by finding the contract in the first place and bringing it to my attention, and by introducing me to the ultimate end-client. However, once that job is done, your services are essentially completed, apart from the routine paperwork of handling payroll. As such, the kind of markups made by some contracting agencies—reportedly anywhere from 50% to 100% (or even more) on top of what I make per hour—are patently unfair. This is why full disclosure is necessary.
- Negotiability Of Our Contract
In the past, I have encountered various contractual issues. You have a right to have reasonable non-compete clauses, confidentiality clauses, and other fairly standard "boilerplate" paragraphs in your contract. However, these clauses must not be overly-broad, or irrationally restrictive or intrusive. Some specific issues that have come up in the past:
- Unduly broad non-compete clause: One contract clearly indicated that I could not offer my services to any other company during the term of my contract. Naturally, as a project winds down, I will be seeking other clients; if the contract does not require me to work full time, I may even be seeking other clients concurrently. My contact with such companies does not represent a threat to your business interests, and should not be proscribed by our agreement.
- Non-complete clause time limits: The time limits on non-compete clauses tend to be unreasonably extended in time. It is fair that I work through your contracting agency for the duration of the initial project. But the fact is, the effort by a contracting house to find a client and a project on which I can work is essentially a one-time effort. Once I've begun working for the client, the contracting house has little to do except process the payroll paperwork. In other words, I do a great deal of work, and the contracting house collects money, sometimes indefinitely, with minimal additional effort or overhead.
It is not reasonable for such a relationship to extend without limit in a manner that effectively precludes me from eventually having a direct relationship with the end-client. Once the initial project is done, the traditional one year non-compete time frame has the practical effect of making it highly unlikely that I would work directly for the client. (When a full year has passed, management turnover and other factors make it very possible that no one at the client company even remembers me.) A non-compete period of six months past the end of the initial contract is fair to your contracting house, as well as being equitable to both myself and the client.
- Unduly intrusive IP clause: Another contract specified that any outside projects I worked on, or inventions I created on my own time, were subject to review by the contracting house to ensure no conflict of interest. Again, this is overly broad. I am very willing to agree that any intellectual property created under the terms of the contract belongs to my client. At the same time, I am always juggling small side projects of my own. I cannot have every project I'm engaged in subject to outside review. There has to be some good will, and some trust, that I will honor the IP clauses of our contract. If at some later time you really think I've taken some ideas—which won't happen, because I am honest and don't steal—but should you come to that conclusion, the contract always gives you legal recourse at that point.
The essential issue is that contracts must be negotiated to the satisfaction of both parties. If you are prepared to negotiate the details of your contract, that makes it far more likely that we will be able to do business together.
- Work Schedule
I always get the job done for my clients, and I get it done cost-effectively. In practice, this often means I work fewer than 40 hours in a week for a given client. My clients love this—it saves them money—but from your perspective, it means that since I am billing fewer hours, you are billing fewer hours on my behalf. That means you make less money. This is simply something you need to know up front. The plus side is that, from the client's perspective, you are willing to bring them contractors who are efficient and cost-effective.
- Owner-to-Owner Contact
I'm the owner of my business. If I'm going to work with your company, I need to know that, should any important issues arise, I can reach the owner of your business. (That is, assuming you are a contracting house of modest size. If you are, say, Computer Sciences Corporation or IBM, I can work with someone a little lower down the food chain.)
But for most companies, before we finalize any business agreements together, I would like to speak to the owner or president. If there are contractual issues to resolve, it may take a business conversation to resolve them, but even if the contract you provide proves acceptable in its original form (or if minor changes can be made without bringing in the owner), I would like a brief chat with The Boss. It's a courtesy to me, which shows me that in the unlikely event any significant issues arise, the owner of the company will be available if necessary.
The Bottom Line
I view any contracting agency as a partner, not an employer. If you find work for me, you should certainly receive due compensation for that. But there are reasonable limits on that, and in no way is it constructive to view our relationship as that of employee to employer. Even any issues that arise with the client regarding work product and process need to be handled directly between myself and the client. There are enough politics to deal with when negotiating issues directly with the client, without adding an extra layer of management.
So, in the end, if you are willing to confine your role to that of an agent, working on my behalf to find work—and if you will agree to the kind of open exchange of information which is appropriate between any talent and their representative—then we have the basis for a mutually rewarding and mutually profitable business relationship.
Gratefully borrowed with permission from Steven C. Oppenheimer.