Re: Fair Cut

[Andrew Plato <intrepid_es -at- yahoo -dot- com>]

> Andrew, are you like, deliberately missing the point of Emily's situation?

No, I am trying to demonstrate that Emily, as well as many other people in this
industry, do not have any idea what the "other side" must endure. 

> It's quite obvious from several of her posts that, as a 1099er, she has
> taken on *all* the responsibilities and risks that an agency takes on for
> its W-2 employees. And the agency is letting her while still expecting to be
> compensated as if they were taking the risks.  The agency is quite literally
> doing nothing but cashing one check and cutting another.  They didn't find
> the job, they didn't negotiate a rate, nothing.

The agency is taking risks.  In fact the agency is taking MORE risk working
with an unknown 1099 than with a known, W2.

RISK 1: 1099s are what the government looks for when they audit companies. 
Lots of 1099s often raise the interest of the IRS. While on a purely clerical
standpoint, 1099ing is very easy, it is not without risk.

RISK 2: When you 1099, you're signing a contract with the agency to do some
work. If you don't do that work, technically the agency can be held liable and
the client could sue for all those wages back.  Don't say this never happens
because I know of at least two agencies that were scoured out of existence
thanks to some totally incompetent Oracle developers.  They bailed on the job
and left the agency hanging. The agency then was ground into bits by the
client. 

RISK 3: The agency is fronting payroll to the contractor. (Normal agencies do
this.) What happens when the client decides, 60 or 90 days in that said
contractor is useless and they don't have to pay? The contractor has eaten up
30 to 45 days of payroll and the agency has not gotten one cent.  Do you think
the contractor pays that money back? Hell no. They bolt and get another job at
another agency. Again, don't tell me this doesn't happen because it happened to
us once.  We lost a ton of money lastly year to a 1099 tech writer who sold us
a deal and then couldn't do the job.

RISK 4: Reputation is a big part of the agency game. Just look at this very
board. People pick apart agencies left and right. A bad 1099 deal can make you
look really stupid. Imagine this scenario. You run a restaurant. A guy comes in
an says "I am a great cook and I have people who want to eat my food. Just pay
me $X.xx per hour and you can charge whatever you want for my food."  So you
hire him and he goes to work making food..  He poisons all your customers. 
Guess who's business goes under?  

I know agencies that lost entire, multi-million dollar deals thanks to some
incompetent contractors who gave them a bad rap. Yes, the agencies should be
more careful. But let's never forget who the real problem is here: incompetence
is what hurts EVERYBODY.  

I don't know the intimate details of Emily's situation. Perhaps some parts of
it were unfair. But the fact is, just because you find the client does not
grant you full control over the deal. The client has the right to mandate
criteria  to you. If they mandate an agency, then you have to find a way to
make a deal with that agency, just as if it was the client. The fact that they
take a cut should be irrelevant. If you are unwilling to negotiate with the
agency, then DON'T TAKE THE JOB.  

If you must control the whole transaction then DON'T WORK WITH COMPANIES THAT
REQUIRE AGENCIES. And don't tell me you can't do this. I did it and I know many
other writers who have thriving independent consulting careers and never work
with agencies. 

Andrew Plato


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