First timer - Dual agents for same contract - how to remove one?

[yozdag]

Hi,

I am new to the whole contracting scene and am looking for some opinion on how to handle a contract renewal I have been offered on my first "gig". I currently contract via Agency A - and I believed that Agency A contracted to client, however I have since discovered that Agency A actually contract to Agency B who are in turn the preferred supplier to the client. Many of the other contractors on site contract directly with Agency B.

This means my rate is much lower than my peers as two agents are eating into the client rate with margin (I now know the client rate so between them the two agents combined margin is 25%).

The client wants me to stay and has offered me a new contract (via Agency B > A > My Ltd) - Agency A does nothing except process my invoice (they have only ever visited the site once) under the same payment terms as Agency B (so no factoring) - whereas Agency B have a permanent presence on site and have done a lot more for me in keeping me informed of any upcoming projects / issues.

I need to explore how I can get shot of Agency A - now, as a contractor noob Agency A was able to get me to sign the opt-out (my mistake, lesson learned) - so I have the usual 'handcuff' clause. What would be a reasonable %'age to offer Agency A in F&F to get rid?

NB - I am prepared to walk at the end of the current contract if I can't get Agency A to agree. I am thinking a direct "take a lump sum in F&F or get nothing" approach..... thoughts?

Thanks

[malvolio]

Hi,

I am new to the whole contracting scene and am looking for some opinion on how to handle a contract renewal I have been offered on my first "gig". I currently contract via Agency A - and I believed that Agency A contracted to client, however I have since discovered that Agency A actually contract to Agency B who are in turn the preferred supplier to the client. Many of the other contractors on site contract directly with Agency B.

This means my rate is much lower than my peers as two agents are eating into the client rate with margin (I now know the client rate so between them the two agents combined margin is 25%).

The client wants me to stay and has offered me a new contract (via Agency B > A > My Ltd) - Agency A does nothing except process my invoice (they have only ever visited the site once) under the same payment terms as Agency B (so no factoring) - whereas Agency B have a permanent presence on site and have done a lot more for me in keeping me informed of any upcoming projects / issues.

I need to explore how I can get shot of Agency A - now, as a contractor noob Agency A was able to get me to sign the opt-out (my mistake, lesson learned) - so I have the usual 'handcuff' clause. What would be a reasonable %'age to offer Agency A in F&F to get rid?

NB - I am prepared to walk at the end of the current contract if I can't get Agency A to agree. I am thinking a direct "take a lump sum in F&F or get nothing" approach..... thoughts?

Thanks

So walk. You were happy with the rate on taking the gig, presumably, and nothing has changed...

You need to understand that (a) the agency represents their client, nobody else, (b) many big agencies sub work to other smaller agencies and (c) agencies are in business to make money, not keep contractors happy. Also nobody is taking your money away, you get a percentage of what the agency earns, not the other way round.

You won't get rid of A - they have a contract with the client, not you. When you've got a bit more experience as a contractor, you will see how dumb your question actually is.

[yozdag]

Wow... such hostility for asking a simple question.....

'A' is going either way, by me walking or us negotiating them out of the arrangement - which is why I only asked for people's experience of a reasonable %'age offer - I don't see that question as being 'dumb'.... but thanks for your opinion.

[Antman]

Why should agency A let go of their margin?

WMS +1

[GazCol]

Wow... such hostility for asking a simple question.....

'A' is going either way, by me walking or us negotiating them out of the arrangement - which is why I only asked for people's experience of a reasonable %'age offer - I don't see that question as being 'dumb'.... but thanks for your opinion.

If it's a contract renewal then renegotiate the rate. You mention it's a fixed percentage of 25% that Agency A and Agency B are sharing - it's not necessarily a fixed percentage shared between the agents. Negotiate a higher rate and hope it's accepted at:

- either the expense of either agent, who at say 12.5% each would probably budge, especially for a renewal.
- the expense of the client, who may increase the rate to avoid you walking.

If that doesn't work out you either renew at your agreed rate or walk, unless you asking leads to the agent/client withdrawing their offer of course.

If a renewal's on the table the ball's in your court, in my opinion, as long as you don't get greedy you'll come away with an increase, most likely at the expense of Agent A.

There's no way either Agent will walk away though, you're stuck in that relationship, regardless.

[TheFaQQer]

I need to explore how I can get shot of Agency A - now, as a contractor noob Agency A was able to get me to sign the opt-out (my mistake, lesson learned) - so I have the usual 'handcuff' clause. What would be a reasonable %'age to offer Agency A in F&F to get rid?

10% of your daily rate, multiplied by the number of days that the contract says.

NB - I am prepared to walk at the end of the current contract if I can't get Agency A to agree. I am thinking a direct "take a lump sum in F&F or get nothing" approach..... thoughts?

Don't threaten to walk unless you are actually going to do it.

[malvolio]

Wow... such hostility for asking a simple question.....

'A' is going either way, by me walking or us negotiating them out of the arrangement - which is why I only asked for people's experience of a reasonable %'age offer - I don't see that question as being 'dumb'.... but thanks for your opinion.

Not a simple question, an inexperienced one that doesn't demonstrate any understanding of the business you are in. And not a hostile answer, merely a less than polite and completely correct one. Open your proposed discussion with either agency A or B or the client and then you will get "hostile".

Your rate is what you sign up for. You want more, then negotiate (and then you'll get my other standard answer of "They're already paying you to do the best job possible, so why do you think you're now worth more to them?"). What anyone else pays or receives is nothing to do with you.

And A isn't going anywhere. You're the only candidate for that.

[yozdag]

If it's a contract renewal then renegotiate the rate. You mention it's a fixed percentage of 25% that Agency A and Agency B are sharing - it's not necessarily a fixed percentage shared between the agents. Negotiate a higher rate and hope it's accepted at:

- either the expense of either agent, who at say 12.5% each would probably budge, especially for a renewal.
- the expense of the client, who may increase the rate to avoid you walking.

If that doesn't work out you either renew at your agreed rate or walk, unless you asking leads to the agent/client withdrawing their offer of course.

If a renewal's on the table the ball's in your court, in my opinion, as long as you don't get greedy you'll come away with an increase, most likely at the expense of Agent A.

There's no way either Agent will walk away though, you're stuck in that relationship, regardless.

Thanks GazCol - useful advice. Agency B have given me their exact margin info (as they have fixed arrangement with client) and I know the client rate (helpful client manager) so from these I can calculate Agency A's margin - its sad but the agent 'B' who does the most for me gets very little margin for their trouble - whereas the sub-agent 'A' who does virtually nothing gets the lion's share.

Agency B are very keen for me to go direct with them (probably because they know the removal of 'A' would mean they wouldn't have to give up any margin themselves) - but provided I get a settlement signed off with 'A' first.

Thanks.

[GazCol]

Thanks GazCol - useful advice. Agency B have given me their exact margin info (as they have fixed arrangement with client) and I know the client rate (helpful client manager) so from these I can calculate Agency A's margin - its sad but the agent 'B' who does the most for me gets very little margin for their trouble - whereas the sub-agent 'A' who does virtually nothing gets the lion's share.

Agency B are very keen for me to go direct with them (probably because they know the removal of 'A' would mean they wouldn't have to give up any margin themselves) - but provided I get a settlement signed off with 'A' first.

Thanks.

Again, based just of what you've posted here, and not knowing the full details or having an accurate understanding of your relationship with Agent A; I wouldn't even bother persuing the settlement sign off. If you want to increase your rate you're much more likely to have success by just negotiating.

[Wanderer]

This means my rate is much lower than my peers as two agents are eating into the client rate with margin (I now know the client rate so between them the two agents combined margin is 25%).

It's really up to the two agencies to come to some agreement over this. Of course agency A isn't going to give you away for free, are they.

Also check your "opt out" status. If you didn't opt out then you can take an 8 week break from the contract (long holiday, do a short contract elsewhere, whatever) then return to the client contracting through agency B and there is nothing agency A can do to stop you.