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Should You Work With a Freelance Agency?

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Freelancing has been a maddening business for me. Not only am I a full-time freelance writer, but I’m also a part-time accountant, lawyer, artist, marketer, reporter, videographer, programmer and salesperson. I’ve lined up speakers and engaged in contract negotiations. I’ve finagled the nuances of SEC law and formulated CTR goals for AdWords campaigns. I’ve given presentations in corporate board rooms and then gone off to play with Legos® at a client’s waiting room. And all this was done in the name of freelance writing, no less.

Sometimes the whirlwind of freelance “writing” activities tires me out. In the midst of querying my hundredth potential client or sending yet another LOI (letter of introduction), I consider whether working with a freelance agency would be better for my sanity.

What is a freelance agency?

A freelance agency is a type of business that subcontracts freelancers to do work that is found and negotiated through the agency. This work is then passed along to the freelancers. Clients typically know that their work is being performed by one or more freelancers when dealing with a freelance agency; however, in some cases, the agency may just be one person who hires other freelancers for his/her gigs and claims their work as his/her own. Check out the Custom Content Council (CCC) for examples of large, well-known agencies in the content marketing field.

Why do freelance agencies exist?

Many freelancers who have freelanced for years or decades eventually start accumulating so many clients that they can’t possibly keep up with the workload. Rather than turn away the additional work, these freelancers subcontract the work out to other freelancers and share in its revenue.

Alternately, an agency may be the result of a freelancer who is good at marketing to and attracting clients but doesn’t want to do the assigned work anymore. Such a freelancer is happier overseeing the day-to-day operations of the freelance business itself rather than getting involved in the work. As a freelancer, you yourself may eventually wish to start a freelance agency.

Why you should work with a freelance agency.

There are some good reasons why you may want to work with a freelance agency:

No more marketing- ever. 

Some freelancers truly hate the song-and-dance that is marketing. They’d rather focus their time and efforts on doing actual freelance work instead of emailing, querying, cold calling, etc. To that end, a freelance agency is the best solution because it does all the prep work for the freelancer and then simply “serves” the finished client to him/her.

No more payment issues.

Generating contracts and including multiple “what if” clauses regarding late and no payment from the client are a real pain in the a–. However, without that contract covering your a–, you have no legal recourse should your client decide to not pay you or skip out on your final installment. Freelance agencies understand contracts and take care of them for you so you can focus solely on your work. Agencies also have your back in case a client tries to stiff you on payment.

Steady work.

Freelancing can be a feast-or-famine business depending on how many clients you can snag and ensure payment from. An agency helps you even out your schedule by offering extra work when you’re low on clients or redirecting work when you’re overwhelmed.

Hard-to-reach clients. 

Government clients are notorious for being hard to win; many government contracts are also only negotiated through selected agencies that know the legal nuances of governmental bidding processes.  Thus, if you want to bid on U.S. government contracts, you first need to buddy-up with a freelance agency.

Big name clients.

Microsoft, Verizon and other big corporations work with dedicated (e.g., CCC) agencies and will only answer through them. Alternately, if you are just starting out as a freelancer and don’t have the experience and credibility to win big name/budget clients on your own, an agency can help by making the necessary introductions. In either scenario, it’s a good idea to have the agency work with and recommend you to these big fish.

Why you should not work for an agency.

Of course, for every pro there is a con. Not every freelance worker wishes to work with a freelance agency. Here are some reasons why:

The middleman effect. 

When you have one additional layer between you and the client, that layer must take its cut before it passes the revenue to you. As a consequence, you end up doing the same work for less money. Furthermore, there is the risk that an agency may accept and distribute low paid work simply to keep clients happy and/or generate steady work for its freelancers.

Limited negotiations.

Not happy with your assignment or hourly rate for assignment X? Too bad. Even if you’re a brilliant negotiator, many an agency will not let you contact the client in order to raise your pay. Even if you are allowed to discuss compensation directly with the client, you still have to involve your agency during negotiations, making the process much more cumbersome.

Not seeing the big picture.

Many freelancers start feeling like a cog in the freelance machine after a few years of working with an agency. This is because the agency negotiates and deals with the clients, not you. As a result, the agency ends up creating and planning the work and all possible future work with the client. Meanwhile, you are at the end of the chain and can only fulfill what was promised by someone else. It’s kind of like being employed- something you sought to escape when you became a freelancer.

So…should you or shouldn’t you?

There are many reasons to consider using the services of a freelance agency, as highlighted above. Speaking from personal experience, I have used agencies and later decided to go it alone. My biggest reason for initially using agencies was to gain experience and clips in certain fields. After a few years, I felt certain enough about my own skills to pitch clients directly. I was also able to pick up former agency clients on my own terms.

If you just want to do the work you were hired to do and not worry about accounting, taxes and rate negotiations, working with an agency can be a real boon. An agency also offers steady work, something that may be missing when you first start out as a freelancer. As you gain confidence in your abilities and want to charge top dollar for them, breaking out on your own makes more sense.

Photo credit by http://www.flickr.com/photos/stickkim/

3 Comments

  1. I’ve been on both ends of this. Working as a freelancer for a larger agency has more cons than pros the longer you work for them. While freelancing for agencies is good for cashflow (for both parties), the agency usually raises their rates and wants to keep you frozen at your original rate. Most of the agencies I worked for at the start of my career were very gracious about acknowledging the contributions their freelancers made to each project.

    Some agencies will try to hide your contributions, or take 100% credit for your work. This is a bad situation, because the work you do for them cannot help you win any work in the future. If this is the case, try to get as much money as possible, because that’s all you will get out of it as a freelancer. Meanwhile, the agency will use your work in their portfolio to win more work for them (which is f***ed up in my opinion).

    Your goal should always to be building your own brand as much as possible so you are not entirely reliant on anyone else. Like the author said, working for any one agency too long starts to feel like a job, and that’s not why anyone goes freelance.

    One more thing to remember is that freelancers are also businesses. Independent contractors still have to make enough to live, and also have to pay their own taxes and benefits, so don’t shortchange their work of you are an agency looking to use their talents.

    Reply
  2. Correction:
    would look into -> would not look into

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  3. Hi,

    I LOVE this idea. Also, I wonder in the IT world, why so many traditional recruiting firms would look into this type of business instead of the decade-old method of full-time consultant placement? Yes, the recruiting firm makes more money for a consultant but your total number may much lower vs. getting tons of project going. Am I alone in this thinking?

    Cheers,

    Reply

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