Sheesh, I thought the literary agency game was a scam. Then I learned about “independent consulting.” These guys make literary agents look like pikers.
The literary agent takes 15% of everything an author makes. I’ve had and fired several and, truth be told, they’re sometimes worth their 15%. Of course, I’ll never forget my famous agent who got me into a contract that required me to buy back my copyright from the publisher when the work went out of print, but that’s another ugly story. So the agent takes 15% straight off the top. Chances are he or she works pretty hard to sell a book to a publisher. It’s hard work to cultivate a series of relationships with publishers and I’m sure all those flights to New York for lunch are taxing.
Clearly, literary agents are pimps and authors are whores. It’s okay, most of us knew that going in. The problem is that the pimps care more about the johns than their hookers. That’s okay too, most of us learned that pretty early in the game.
In the IT business, most large companies won’t deal directly with an independent contractor. They—understandably I suppose—need a layer of insulation between themselves and the contractor, mostly for tax liability reasons. Enter the Preferred/Approved Consulting Company. They’re the layer of insulation. They don’t do much of anything other than feed bodies into the maw of the IT departments of large companies and handle billing. For that they take up to a whopping 40% off the top of the subcontractor’s billing rate.
The next time you hear about fancy-dancy rates in the IT business, ask if that’s the rate at which the Consulting Company bills the client or the rate at which the Consulting Company pays the subcontractor. And if you can find out, tell me, because in every case of which I’m aware the actual rate that the Consulting Company bills the client is Top Secret.
The straw that broke this camel’s back came earlier this week at a Consulting Company luncheon for its consultants and subcontractors. Turned out I was the only subcontractor there so the talk mostly surrounded things that don’t affect me: health care plans, training opportunities, and the like. Then it dawned on me. As a subcontractor (paying for my own health insurance, training, etc.) I’m subsidizing those benefits that the consultants (employees) enjoy.
When I brought this up, the regional manager told me that there’s a lot of overhead in the services the Consulting Company provides for me or on my behalf. Health insurance, believe it or not, was one of them. He said that although I don’t benefit from it, I actually show up in the headcount for the HMO they use. My response was that my insurance company would surely be interested to hear that and would probably enjoy a little help with my medical bills that currently run more than US$20,000 per month.
So, what I have in mind, after talking with another subcontractor, is some sort of “guild” for independent contractors. We’d work to get approved / preferred / blessed by the large companies that use a lot of contractors and instead of keeping our billing rates secret, we’d have an open book policy for both customers and contractors. Large companies can save a good bit and independent contractors could see more of what they’re actually being billed at. And I think we can do it for a little less than 40%.
Interested? Email me.
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