Reply to: Contract Advice Required

[nemoffm]

Agreed Contract with 60% of real amount agency billed to client

Hi, newbie not only on this site but also as a contractor.
Took a 2 months overseas contract with option to be paid in GBP or EUR, decided for GBP since have to pay most bills in GBP. 2 weeks after start new circumstances, found that agency only pay 60% of the original the client is paying. Now I am willing to ask agency to pay me in EUR. Is it possible, just found an opt-out clause and one week notice period on the contract.

Any advise/help will be appreciated.

Thanks

[Beefy198]

Well, we are, but you just don't see it.

</snip>

Whilst you make valid points, my issue was with the fact that "The Agents View" came across as stating "if you're unfortunate enough to have a rate cut it's not our problem nor should it be, as long as we maintain our margin"

Besides, whilst it's true that if the rate goes up you make more, there is a limit to that. Why put all your effort into securing a miserly 5% rate increase for both the contractor and you when the agent could instead be on the phone trying to drum up new business and get a hefty cut from a new contract?

That's if you actually do the cold calling, that is, and don't make the junior agents do it....

[Another Dodgy Agent]

There you are you can talk sense if you try

Sshhh! People on here will think we're mates...

[DodgyAgent]

Well, we are, but you just don't see it.

The main reason why an agency shouldnt "share the pain" is because we are your credit control, we pay our contractors weekly (if they require this), try going to UBS Warburgs or similar and getting paid weekly. You would be lucky to get paid after four months (for one weeks invoice). We have something in the region of a £12M od with our bank to facilitate payment of contractors up front (don't tell DA - he will look at it as boasting, the wannabe spiv).

It's a moot point because 75% of UK business won't want you to go direct to the business with your ltd co anyway, too much exposure. This benefits you as well because if you have an agent in place between your ltd co and the client, you don't have to sign all the nasty finality clauses where if you tread a toe wrong your history.

Finally if you go doolally one day and decide to delete all the project notes off the system and then attempt to shag the MD, then your agent will cover the indemnity, not you. You take out indemnity (when most contractors even bother) on the supposition that the agent chases you for damages. Remember the agency is between you and the end client, so its the agent that gets sued if you fess up!

Finally, someone on here has come up with a contractor utopia, whereby you set up a site that contractors and clients can interact with and link each other to suitable roles. Well if you contractors are spending all your time linking to potential clients and the clients are trying to find suitable contractors in this utopia, then who is doing all the admin, covering all the timesheets, invoicing and contracts? You would have to employ somebody. I know, we wil call them "agents" just so we can differentiate between you, us and them!

There you are you can talk sense if you try

[Another Dodgy Agent]

You did all the donkey work in placing them, now it's a new contract. An extension.

What exactly are you doing that's so wonderful right now? Please tell us why you shouldn't "share some of the pain"?

Well, we are, but you just don't see it.

The main reason why an agency shouldnt "share the pain" is because we are your credit control, we pay our contractors weekly (if they require this), try going to UBS Warburgs or similar and getting paid weekly. You would be lucky to get paid after four months (for one weeks invoice). We have something in the region of a £12M od with our bank to facilitate payment of contractors up front (don't tell DA - he will look at it as boasting, the wannabe spiv).

It's a moot point because 75% of UK business won't want you to go direct to the business with your ltd co anyway, too much exposure. This benefits you as well because if you have an agent in place between your ltd co and the client, you don't have to sign all the nasty finality clauses where if you tread a toe wrong your history.

Finally if you go doolally one day and decide to delete all the project notes off the system and then attempt to shag the MD, then your agent will cover the indemnity, not you. You take out indemnity (when most contractors even bother) on the supposition that the agent chases you for damages. Remember the agency is between you and the end client, so its the agent that gets sued if you fess up!

Finally, someone on here has come up with a contractor utopia, whereby you set up a site that contractors and clients can interact with and link each other to suitable roles. Well if you contractors are spending all your time linking to potential clients and the clients are trying to find suitable contractors in this utopia, then who is doing all the admin, covering all the timesheets, invoicing and contracts? You would have to employ somebody. I know, we wil call them "agents" just so we can differentiate between you, us and them!

[Beefy198]

Why should the agent be subsidising so that the contractor doesn't have to take a rate cut?

You did all the donkey work in placing them, now it's a new contract. An extension.

What exactly are you doing that's so wonderful right now? Please tell us why you shouldn't "share some of the pain"?

[Ardesco]

Why should the agent be subsidising so that the contractor doesn't have to take a rate cut?

That my friend is called business. Minimising our losses and keeping our incomme stream is what it is about, don't tell me you wouldn't cut the contractors rate to increase your margin if you could.

It's what business is all about!!!

[pmeswani]

Why should the agent be subsidising so that the contractor doesn't have to take a rate cut?

If you had to chose between getting no commission or some commission, what would you chose?

If the rate goes down, we earn less anyway, so squeezing the agent would be double bubble. If you've been there a year, fair enough - ask the agent to share the pain - if you've been there 3 months, then I wouldn't think the agency will shift, especially as we're all losing contractors heavily anyway - there's a need to maintain the margins on what we have.

A lot of agents may use the 3 month trick to try and boost their commission. You know... sell the story that the clientco has reduced the rate and therefore the contractor has to take the pain, etc. etc.

What goes around comes around of course - when you earn more, we earn more - assuming your agency has a fixed margin....

In some cases, some contractors earn less and the agent pockets the difference.

[The Agents View]

Surely they should be going through the agent?

I'd get the agent involved as there'll be room in their mark up to make a cut too, therefore all the discounted rate won't hit your pocket!

Why should the agent be subsidising so that the contractor doesn't have to take a rate cut?

If the rate goes down, we earn less anyway, so squeezing the agent would be double bubble. If you've been there a year, fair enough - ask the agent to share the pain - if you've been there 3 months, then I wouldn't think the agency will shift, especially as we're all losing contractors heavily anyway - there's a need to maintain the margins on what we have.

What goes around comes around of course - when you earn more, we earn more - assuming your agency has a fixed margin....

[slickcontractor]

Surely they should be going through the agent?

I'd get the agent involved as there'll be room in their mark up to make a cut too, therefore all the discounted rate won't hit your pocket!

clientco @ canary wharf cut our rates by 10% startin jan 09 and they told us b4 informing the agency...the goodside is that they threw in a 6 month contract ext with it so I dont mind for now as i know a few people who been on the bench closing 6 months now...

[eyetie]

Tell them you'd agree to a 5% cut for this contract period only and would expect to revert to your previous rate for any further extension.

In which case, you might want to consider your extension as a notice period as they will probably look for fresh blood at your newer rate. The client would only risk p!ssing you off in this manner if they really wanted you or they really needed to save money. Which do you reckon it is?

[jimjamuk]

suggest a rate 2% higher than you are on now - when they query it make it 4% then 6%

Rinse and repeat......

[thelace]

Surely they should be going through the agent?

I'd get the agent involved as there'll be room in their mark up to make a cut too, therefore all the discounted rate won't hit your pocket!

[Dave Spring]

Thanks for the advice guys - much appreciated.

I think I will offer a small rate cut (5%) for th 6 months on offer (new contract so will not affect my current rate which ends 31st Dec) but request a longer contract.

I will also suggest they try to get a 5% cut with the agency as well.

Dave

[NotAllThere]

Suggest working fewer hours at the same rate. Perhaps for a longer period. (E.g. instead of 5 days a week for three months, 2.5 days a week for 6.) Then you can pick up other work.