Retainer?

[marius123]

My contract is up and after a couple of weeks with the family I'm looking around for something new.

There isn't a huge amount around where I live (North East) at the moment so I'm debating heading down south for a little while. There is however an interesting possible opportunity here that might be really good...

Company I've worked with before may have some work for me on an interesting new project. If it comes off it'll be a good year or so of good work, good money, near to home. I've worked with these guys before and trust them to a reasonable degree when they say they're pretty certain this is happening and they want me for it.

Timing, as always, is the problem.

We're probably looking at a few weeks until they have everything signed / sealed on their end and things can get started. I don't want to be sitting around for weeks based on a maybe. So, there has been some talk of a retainer of some sort. We're going to have a proper chat about this in the next couple of days and I don't really know how I feel about it. Some kind of commitment from them is good but then again it needs to be strong enough that I'm not too upset about any thing I might say no to in the meantime.

Enough rambling, proper questions:

• Has anyone ever had a retainer of any kind from a company/agency before?
• How did it work? / How long was it for? / How much was it (compared to say their normal day rate)?
• How was it from a legal point of view? Was there a contract? A purchase order? etc

If anyone has any thoughts / insight about this then it would be appreciated.

[marius123]

I'm still trying to read up on this in the search but struggling to find a suitable comparison.

What I possibly mean by 'a retainer' above is them paying me some money to effectively be available at a certain (shortish) notice to carry out some work... In reality that likely means not taking a contract from someone else during that time.

Gah, this is clear as mud.

[pauldee]

Interesting point, I'm kind of in this situation myself. I have a contract that I'm not 100% sure about an some other irons in the fire. I'm two weeks from the end of my contract and need some assurances to stop me going elsewhere.

The problem is, I doubt I'll get anything more that a verbal assurance from the current client, and I'm not convinced of the value of that.

My generally opinion is that a signed contact even on a low rate is worth infinitely more that an 'absolute-definite-just-needs-signing-off' on any rate.

[Lance]

I'm still trying to read up on this in the search but struggling to find a suitable comparison.

What I possibly mean by 'a retainer' above is them paying me some money to effectively be available at a certain (shortish) notice to carry out some work... In reality that likely means not taking a contract from someone else during that time.

I have considered this as well in the past.
I think the biggest issue is that the client will expect you, quite reasonably, to actually be available when they call. So that suggests that they'd want some contractual obligation.
Given that most contractors shy away from any obligation of work your normal contract will be no good.

You could take a more traditional business view and ask them for a purchase order for xx days where the PO is open ended as far as end date goes. Make the day rate xx% greater than normal to cover for the quiet period. You then have the risk as they may just not bother.

It does sound like they want you to own the risk. So what's it worth to you? Make it worth your while to carry the risk and that's probably what you want.

You don't want a contract where you are obliged to do work and they are obliged to provide the work though for obvious reasons.

[marius123]

The obligation is a big part of it, I think you're right...

I guess they're looking for an obligation that I'll sign a contract should they put it in front of me within whatever period we agree then at least start to carry out that contract. That in itself sounds a bit iffy.

I wonder if there is a way to structure that so that it isn't so bad.

[Hapax]

It’s perfectly reasonable to ask for a retainer in these circumstances. As you say the client is paying you to ensure your availability.


I suggest you ask for a one-month retainer which should be at your normal daily rate. You should also offer the client the option to convert the retainer into a more conventional contract during the retainer period, if negotiations are successful. If the latter and you’re feeling particularly sweet you can always deduct the value of the retainer from you first invoice.


If the future is still unclear at the end of the month you can, of course, extend the retainer period for another month.


I don’t think it makes any difference whether the retainer is a PO or a contract.


BTW if the client won’t accept these terms I would walk.

[Snarf]

"I guess they're looking for an obligation that I'll sign a contract should they put it in front of me within whatever period we agree then at least start to carry out that contract. That in itself sounds a bit iffy."

I dont see that being an issue, a retainer does not mean that you are obliged to do anything at the end of it, it simply means that they are paying you to do nothing so that they have you at their disposal should they need you at short notice, at the end of the retainer period they will give you a contract which will then need to be negotiated as normal.

What I would do (Depending on how well you know the client and how sure they are that its going to materialise into a full blown contract) is to ask them to draw up the actual contract now, start the negotiating process (You'd have to do it anyway either with them or another client) and have them put two rates in there, a working rate and a standby rate, make sure they have a clause that lets them terminate the contract quickly.

They can then have you on standby for x weeks until they get up and running and go into your full rate when they give you work.

If the project gets canned, they simply serve you notice and you stop being on standby/working.

[marius123]

Thanks everyone.

I'm happy to do the retainer at less than my normal day rate as it gives me time to do bits and pieces of short term work that I struggle to find the time for normally whilst also having some time to myself. I'm thinking somewhere between half and two thirds of my normal day rate.

We are talking about say a month as was suggested and I think we need to agree at least the broad-brush terms of the contract that will follow it up front. I'm not worried about the contract/terms itself as I've worked with these guys before.

The conversation I had with them yesterday seemed to put me in the driving seat I think. It sounds like they do need me for this project and are confident it'll go ahead now, hence money being on the table.

[scooterscot]

• Has anyone ever had a retainer of any kind from a company/agency before?
• How did it work? / How long was it for? / How much was it (compared to say their normal day rate)?
• How was it from a legal point of view? Was there a contract? A purchase order? etc

If anyone has any thoughts / insight about this then it would be appreciated.

Once I agreed a annual retainer. The client would purchase 30-days for a fixed fee via purchase order. I also had a contract to discuss the nature of the work, location etc.

On some years the client only used 12-days. Win for me.

On other years the client called me with 48-hours notice to be somewhere else. Not really convenient. So in the following year I wrote a clause for a minimum two week notice.

If you can get a retainer go for it. The biggest hurdle you'll face is trust.

[SimonMac]

To be honest I am not sure how successful your idea will be, it is a buyers market at the moment and unless you can offer them something above and beyond I am sure they will just look else where if you are not available.

I would also worry that any implications a retainer could have on the status of the contract when you start working when it comes to IR35, you are placing an obligation on yourself to take on work when the company needs you which flies in the face of one of the cornerstones of the IR35 regulations about not being obliged to work if offered.