Some advice please

[Ravello]

Thanks for the advice everyone, from the responses I can see that it is not entirely straightforward.

It should just be 31 days of work and the client has said they are happy for me to bill them directly (via LTD co).

The dev does not know about the 40% of course, but I am giving him what he asked for in his quote and have neogtiated for him to work from home (pretty good gig for him I think).

I like the idea of a finders fee, but how would that work legally etc. Would I ask him for it up-front? How much would I ask for?

Thanks.

Which is exactly what we all complain about when agencies do it. The fact that he is working from home is clearly not dependent upon the rate as you have quoted the full rate to the client.

If it's easier for the client for him to be sub-contracted via you, why not explain that to the contractor, offer to split the 40% between the 2 of you and explain that this is based upon the additional admin for yourco? It might actually be beneficial to you in the long run, as it will certainly save any aggravation if the other guy finds out, equally, he might be happy to do something similar in the future...

[Amiga500]

Which is exactly what we all complain about when agencies do it. The fact that he is working from home is clearly not dependent upon the rate as you have quoted the full rate to the client.

If it's easier for the client for him to be sub-contracted via you, why not explain that to the contractor, offer to split the 40% between the 2 of you and explain that this is based upon the additional admin for yourco? It might actually be beneficial to you in the long run, as it will certainly save any aggravation if the other guy finds out, equally, he might be happy to do something similar in the future...

I see your point, but as a contractor surely we have as much of a right to subcontract as an agency would?

The contractor is giving a 40% reduction due to it being project work and not bespoke consultancy (I am doing all the consulting, application design and providing blueprints, functional specs etc.).

I do like the idea of splitting the 40% both ways, although I can see this overcomplicating things, unless he bills the company and gives me a 20% finders fee - this is something that could work.

[Ravello]

I see your point, but as a contractor surely we have as much of a right to subcontract as an agency would?

Depends on your contract, but assuming there is provision for this then yes.

The contractor is giving a 40% reduction due to it being project work and not bespoke consultancy (I am doing all the consulting, application design and providing blueprints, functional specs etc.).

Fair enough from his point of view, what are the client's expectations though if they're happy to pay the additional 40%? Not something you need to answer just something to consider.

I do like the idea of splitting the 40% both ways, although I can see this overcomplicating things, unless he bills the company and gives me a 20% finders fee - this is something that could work.

The percentage allocation shouldn't make a difference to the way in which the billing is set up. I'd suggest that you invoice the client for 100% of his work, hisco then invoices yourco for 80% of the value of his work. You have a contract in place with the client for provision of hisco services and subsequently a further contract with hisco which reflects the contract yourco holds with the client. In particular you would be best advised to reflect the payment terms from the client unless you're happy to provide the factoring service that many agencies do.

I'd also suggest that in order to put this in place you thoroughly review the contract you have with the agency. As others have said, I wouldn't ask the agency as their response is almost a foregone conclusion. Look for exclusivity terms and anything that denotes service provision, restrictions on direct engagement with client etc.