I got Contract direct but Client insists I use their preferred agency

Contract Direct
Contract Direct

Contract Direct

Des got a contract direct only to be disppointed to be told he had to use an agency. Here is his story.

I know someone who works at this client‘s place and he tipped me off about this contract being available with just my skills.

He mentioned me to the client, I went for the interview, quoted a rate and got the gig.

Now, the client is telling me that I have to use their Preferred Supplier agency to put my invoices through.

This is going to cost me.

Surely that is not fair.

Contractor Going Direct to Client
Contractor Going Direct to Client

Any advice Dr McLaughlin?

Dr McLaughlin‘s IT Surgery

Of course it‘s not fair.

However, there is one thing to consider.

You went to the interview, told them your price and they agreed to that when they offered you the contract.

From what you say it seems they never mentioned having to go through the agency at the interview.

In other the two sides struck a deal and then one side has introduced an extra cost after the deal was agreed.

Imagine what they would say if, after the deal was agreed, you insisted that they would have to pay your travel and accommodation costs if the contract was away from home.

Direct Contracting for IT Contractors
Direct Contracting for IT Contractors

It would be outrageous and so is what they are doing.

Your Legal Rights

Legally, you are within your rights to insist that you are remunerated for the amount agreed in the deal.

They introduced this extra cost to you after you agreed the deal.

Remember that a verbal deal is just as legal as a written one even if the contract has not been signed.

Threaten to Sue

However, you don‘t want to threaten to sue someone who is just about to avail themselves of your services.

What you should say to them is what I said above.

You should say that you would be happy to go through the agency provided the client pays the extra cost.

You can say that the fee quoted was one for going direct.

If you had known that there was going to be the extra cost to you of going through the agency you would have quoted a higher figure. That’s because the figure you were quoting was the income to you without an agency‘s involvement.

Increase Your Rate

The client may see the sense in this and increase your rate so that you can pay the agency.

Of course, unless you have niche skill, the client holds the upper hand here. That’s unless you get the offer of another contract in the meantime.

Dumping the Agency and Going Direct to Clients
Dumping the Agency and Going Direct to Clients for uK contractors

They may just say no.

However, saying no would be unreasonable and you are legally in the right – and most people are reasonable.

Negotiate a Deal to Contract Direct

You may have to negotiate a deal where you and the client split the cost.

You can also make sure that the agency charges you only a small fee, e.g. 8% or less as you found the contract and all they have to do is process your invoices.

It could also be that when you ask the client to pay the agency‘s fee that they may not be so certain that they need to go through the agency after all.

Direct Interview

However, it might be a good idea when you want to contract direct (and this applies for all our contractor readers), that you make it specific that the rate you are charging is the rate that you expect to receive. Any money that needs to be paid to an agency for processing your invoices will have to be added on top of that.

This is not something that a contractor usually thinks of when going to a direct contract interview. However, it is something that they should bear in mind for the future.