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  1. #1

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    Default How to legally get out of an agency contract

    Hi guys,

    I'm fairly new to the world of contracting and I'm now into my second 6 month IT contract and I'm extremely happy that I took the jump.

    I've realised from talking to other contractors at the firm that many of them are contracted directly with the client and as such are better off then I am, as they don't have an agency taking a cut.

    From anybody's experience is there a way for me to legally contract directly with the client and leave the agency?

    Any pointers/advice would be much appreciated!

    Thanks

  2. #2

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    Quote Originally Posted by tkmk View Post
    From anybody's experience is there a way for me to legally contract directly with the client and leave the agency?
    Yes, though it's not always straight forward.

    1. The client often doesn't want to engage contractors directly.

    2. Payment terms may not be as good/reliable if you go direct.

    These two points are the main reasons why clients/contractors use agencies, though it sounds like they may not apply to your current contract.

    The biggest problem is that the middle man at the agency won't like getting cut out and will often put a restriction in the contract preventing you from going direct for a certain time. The enforceability of this is dependant on the length of the restriction and your opt out status.

    If you don't opt out then it's 14 weeks from the start or 8 weeks from the end of the contract, whichever is longest. If you didn't opt out and they put a restriction in the contract which is longer than this then it may not be enforceable, though they are going to scream blue murder if you try it on.

    The agency regulations limit the cost of "buying you out" to release you from the grip of the agency too.

    Your best chance of success is if the client is willing to do the dirty work and help you cut the agency out of the deal. They will probably have a lot more clout with the agency than you will...

  3. #3

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    I have worked with clients that have different resourcing policies. Some have an internal process but need external agents for other elements of the business. Becareful that even if they say they are direct to the client they maybe direct with the internal process which is still run by an agency. I think Barlcays is an example with their 'internal' system being run by Hays but other agencies place on site.

    In my experience swapping just because you will be better off is not enough justification to make the move and regardless of handcuff clause with the agency it is likely there is a similar agreement between agency and client. The agent is highly likely to cause a fuss and extra grief for your client. Not a position I would want to be in on my first contract IMO.
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    This is going to p|ss off the agency and then someone suggests getting the client to help with the dirty work as they have more clout. I don't see what's in it for your client and why they would get into a fight just to get you a few more quid in your pocket.

    IMO you have an arrangement, stick with it. Getting into a fight and damaging relationships just isn't worth it.

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    Hi guys, I appreciate all the advice and steer! Seems like a good forum.

    As a new contractor and somebody looking to build relationships then it is perhaps not wise to do something at this early stage. I don't want to upset the client or the agency.

    Thanks :-)

  6. #6

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    I got my first "direct" contract from an ex client talking to me about a short term need he had, when I was working for a new client.

    I've since done it 3 times, and its mixed bag - the last time I did it I actually missed having a man in the middle as the client got "aquired" and didn't pay my invoice for over 4 months.

    I think I spent my extra profit just chasing the swines - and reading about the Late Payment of Commercial Debts (Interest) Act 1998 etc etc.

    I agree with above too, the last thing I'd do is risk annoying any of the people that feed me; but just try build a network.

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    payment terms is something you need to be aware of when going direct, you could be looking at anything up to 90 days to get paid and if you get in a dispute you could be looking at longer.

    which is fine if you can afford to live that long with no money especially when starting out and you have minimal warchest to fall back on

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    Default From an agency point of view

    As an agent <cue boo, hiss, etc> I of course would not be at all happy if a contractor decided to try and drop us like a stone and go direct to the client.

    I would, as always, direct you to your contract to see which terms you have signed up to with regards to "no return clauses" etc.

    Also, be aware that using an agency is a commerical decision on behalf of many companies who do not want to take on the risk of dealing with staff / contractors directly hence them being happy to take on the extra cost involved of dealing with an agency.

    the point about payment terms is also a good one, as an agency, we will have solid terms and conditions in place with our major clients to ensure prompt payment and also generally larger organisations have the cash flow to be able to take longer payment terms on the chin.

    I agree with all others stating that it would de you no extra good to try and circumvent the existing arrangements for a few extra quid that could end up alienating you from your agency and quite possibly the client as well, who, if faced with a claim backed up by a contract from the agency may well roll over, leaving you very exposed.

  9. #9

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    TO be honest even the slightest hint of grief for the client will be more than likely cause your termination, there has been a few threads recently about a contract getting canned for kicking up a fuss, they will be more loyal to the agency than you.
    “Live a good life. If there are gods and they are just, then they will not care how devout you have been, but will welcome you based on the virtues you have lived by. If there are gods, but unjust, then you should not want to worship them. If there are no gods, then you will be gone, but will have lived a noble life that will live on in the memories of your loved ones.”

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    Default Kickbacks

    Quote Originally Posted by SimonMac View Post
    TO be honest even the slightest hint of grief for the client will be more than likely cause your termination, there has been a few threads recently about a contract getting canned for kicking up a fuss, they will be more loyal to the agency than you.
    Hehehe, in this case, either the key decision maker at the client site sleeps with someone from the agency or gets kickbacks (preferrably into offshore account). Ahh, sorry, profit sharing, kickbacks is just soo frikking rude. Absent these two, it's then just the case of being timid. I'm a contractor and i dumped a number of agencies in my contracting life successfully. Need to know the rules, be forth-coming and frank. Anything above 10% for an agent's cut is usury. Offer the financial (or other) incentive to the client - these work best. If you're in IT, check the purchase orders in the system and see how much the agency's cut is. Propose to split the agency's cut half half with the client.

    All this talk about payment terms, relationships is a crock of s***. Have a few extra bucks to survive extended payment terms, c'mon, this argument is again for the paycheck-to-paycheck slaves or wasters. And when the client expresses concern about the relationship with the agency and they are NOT getting 'flesh' or kickbacks from the agency on the side, cough cough, then this middle management layer is a bunch of sheep. This day and age there are more agents than consultants. They are like pests already. And we're moving towards direct hire or things like talent pools where clients can go shopping for resources. Again, if kickbacks are involved, you have to offer more to get the client interested.

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