The Pros and Cons of Being a Subcontractor

Photo credit: Jenah Crump Photography on Flickr

Previous blog posts have extolled the time-saving benefits of subcontracting. Sure, if you’re the person subcontracting work, it can help boost your income, keep clients happy, and prevent from you turning away new work even when you’re busy. But is it a sweet deal for the subcontractor, too?

That depends.

A mid-summer look at my income spreadsheet showed that I earn much of my income through subcontracting agreements. I hadn’t thought about my patchwork of copywriting, blogging, and journalistic projects it in those terms, but much of my work is (either formally or informally) structured this way. So I can say from personal experience that subcontracting with advertising and PR agencies, creative staffing firms, and other freelancers is a mixed bag. Here are some of the pros and cons.

Pros

Access to big-name clients

Some national brands are uncomfortable hiring an solopreneur, but they’ll happily work with a boutique PR agency or a web design firm that oversees the project and hand-picks individual freelancers for them. In other cases, an experienced freelancer might have a large roster of clients she’s cultivated over several decades and she might bring in junior-level freelancers to help her out as needed. Unless you have a huge, impressive portfolio and an equally impressive roladex, you probably won’t land these projects on your own. That’s why subcontracting can be a great arrangement for up-and-comers trying to gain more experience.

Negotiations are done for you

Subcontracting is nice if you’re the type of freelancer who just wants to focus on the creative work and hates hashing out contracts or negotiating fees. Hopefully the person who’s subcontracting to you has a system in place so everything runs smoothly from the initial creative brief to the final invoice (in my experience, most of the people who subcontract are organized and entrepreneurial enough to take care of these details for me). In situations where I’ve started a project and later run into scope creep, my contact usually convinces the client to stick to the original plan or adjusts my pay accordingly. If the client tries to jerk me around, I have someone to back me up! I hate initiating serious conversations with clients myself, so having someone else advocate on my behalf is a huge benefit. If you prefer being in the driver’s seat, though, this could become a downside.

Cons

Someone takes a cut of your pay

Whether you’re dealing with another freelancer or a large marketing firm, they’ll usually pocket part of the check from the client. In almost every case, I set rates with the person who subcontracts to me, and they cut me a check, so I have no idea how much they’re making from the project (I suspect that in some cases they could be marking up my rates as much as 100% so they pocket half of the project cost). After all, they’re the ones who’ve cultivated that client relationship and they’re usually doing some project management as well, but I mention this because you may be able to earn more money working directly with clients. The other issue is that sometimes you have to wait for the client to issue payment to your contact before they’ll issue your check, which can take awhile. In my experience, creative staffing firms offer lower rates than other types of subcontracting agreements, but they issue payment like clockwork. Some even offer direct deposit!

More potential for miscommunication

I haven’t found this to be much of an issue, but the more people who are involved in the creative process, the more it’s possible to get wires crossed or instructions misconstrued. To avoid this, most of the time I either work directly with the client to meet their copy needs or I communicate entirely with an intermediary who’s well versed in the client’s preferences. Sometimes I never talk to the end client, and other times I end up emailing them almost daily to discuss their project. It’s really up to the person who hires me and how they prefer to work.

Non-solicitation clauses

In most subcontracting relationships, you’ll be asked to sign a non-solicitation agreement stating that you will not work with their clients outside of that subcontracting relationship without their permission. This is to prevent you from working directly with the client directly, leaving the intermediary high and dry. Sometimes the contract will specify a period of non-solicitation. I don’t have a problem with this arrangement, because I understand the need for people to protect their business model, but it does limit me from cultivating those clients myself.

For me personally, the benefits of being a subcontractor outweigh the downsides. If you’ve worked as a subcontractor, have you found that to be true as well? Or were there other pros and cons I’ve missed?

Photo Credit: Some rights reserved by Jenah Crump Photography