🚀 go-pugleaf

rmac@well.sf.ca.us (Robert J. McIlree) writes:
 
> Stefan Jon Silverman  <sjs@sjsinc.com> wrote:
>
> [ portion deleted]
>
> > [ my own text deleted ]
>
> A few points to consider:
>
> 1. Contracts are negotiable, including the NACCB one (which I also concur is
> slanted way to far in the brokers favor). If they don't negotiate, don't take
> the gig.
>
 
        I have in the past modified the NACCB template on the limiting of
non-compete clauses to the smallest definable entity within a client
organization (i.e., the project or department level), on intellectual
property issues when I bring my own tools / code into a client organization,
and on contracting independently with groups I come into contact with during
my tenure at the client's site. I have found most NACCB brokers will not
change the language on payment terms; they state quite catagorically that
their attorney's will not let them modify this clause because of repercussions
with the IRS. In these cases, I either walk away or give them my SSN and
tell them to deal with me as a W2-able employee.
 
> 2. The 20 Common-law tests of employment are subjective, not objective. Not
> qualifying under one of these tests doesn't automatically brand you as an
> employee. Brokers who tell you otherwise are BS'ing you.
>
 
        I agree in principal with the above, and can prove that I am in
compliance with the first 19 to the satisfaction of most brokers (or at
least the few who seem to care -- not many do). The NACCB interpretation
of the "assumption of financial risk" question, however, seems to be that
just being in business is not "in and of itself" enough of a risk if you
are a computer IC and may expose the member brokerage to some form of
IRS investigation. In most other fields, IC's are not subjected to the
duress of having to carry the prime-contractors liabilities until they
are satisfied by the client. The prime- / sub- contractor relationship
(i.e., broker / IC) is independent of the prime-contractors relationship
with the client. For case law, just look at the building construction
trades (the plumbers, carpenters, electricians, etc. get paid whether
or not the homeowner pays the general contractor). My bugaboo here is
that computer IC's are being judged by a different standard by the
brokers because from the IRS's point of view, we all make far too much
money, hide income, and commit tax fraud (I can tell you many stories
of the audits I've endured over the years).
 
> 3. If you are working as an IC, other laws apply, like the Uniform Commercial
> Code, state business and labor laws, etc. You have _every right_ to negotiate
> payment terms with brokers _regardless_ of the receivable cycle of the end
> client organization.
>
 
        Only if the broker is amenable to negotiation on this issue. Most
aren't. The only middle ground that I've seen, is an oral promise to pay
net 15 in-spite of the contract language ("it's only in there to satisfy
the IRS") or some kind of advance / loan arrangement in the contract body
(and here the discression to activate this clause rests with the broker).
On the oral agreement issue, a wise-man once said (he was probably an
attorney): "if it aint on the paper, it's not real."
 
> 4. In every case where I rejected a "pay when paid" contract, the broker saw
> things my way and gave reasonable payment terms.
>
 
        Then you are dealing with a much better class of broker than I've
encountered, most recruiters / consultant reps (as opposed to the client
reps) need management approval to change that portion of the contract and
that is rarely forthcoming. Howard Toner (Toner Corp.) one of the founders
of the NACCB and author of the template contract told me in 1991, in no
uncertain terms, that I could live with the clause or use the door. As I
said above, if I want the job I go W2.
 
> 5. As a rule of thumb, if the broker is paying you when they get paid by the
> client, the broker, IMHO, is entitled to _at most_, 5% of the gross billing.
> Part of their cut consists of the float they must carry between paying you
> and getting paid by the client. All reputable brokers I have done business
> with operate this way - and some are NACCB members.
>
 
        I agree with what you are saying about their being entitled to only
5%, but the lowest I've been able to push it is 10%. Claims of administrative
and marketing costs (which I will address later) seem to leave the brokers
in the position that they can't go any lower than that. There have been
postings on the net about groups willing to carry you paper for as little
as 5%, but the IC still has to find the work him/her-self.
 
> > [ my own text deleted ]
>
> If you've been around this business for any length of time (and it appears
> to me that you have), it's common knowledge that brokers are not technical.
> That's why the client interviews you.
>
 
        I have never been anything but a consultant. I have over 15 years
of technical / financial / corporate management experience including the
founding and building of 3 consulting corporations, one of which resulted
in an IPO. I'm now operating, by choice, as a solo-practicioner because
I got tired of spending most of my time dealing with banks, attorneys,
accountants, insurance salsemen, technical contracting officers, and
employee problems. I got into this business to do cutting-edge technical
work, not corporate management.
 
        I'm not claiming that a broker has to be technically proficient
in the sense of "being able to do the work," because at that point, they
should do the work and not be a broker. I do, however, get calls from
brokers who are friends all the time asking me to explain the technical
details of a client req. that has just come in so that they can then find
the right people (and I do, out of the goodness of my heart; sure isn't
billable). I have also encountered brokers who couldn't spell 'c' or who
spouted buzz-words and no substance. If the broker is not able to under-
stand the needs of the client, how are they supposed to propose a
consultant who is a good match?
 
> What's the difference between scanning the net versus the Sunday Want Ads
> or Computerworld emplyment sections? You gotta do some work here. Expecting
> a broker to give you a break because you found him is unrealistic. Why? It's
> the _broker's client_, not yours.
>
 
        I expect no breaks. I would like to know, however, why I am forced
to go through the ritual of submitting a resume, filling out a skills
questionaire, and interviewing with the broker (all non-billable time /
opportunity cost) when they then post on the internet and don't even
bother scanning their own database.
 
        Contrary to what you said above, this has gotten markedly worse
in the last two years. Up until then, I got calls regularly from brokers
on my availability.
 
        As an example, having come off a contract last week (very short
term), I called around to all of the recruiters / consultant reps that
I had dealt with recently to find out if any of the jobs I turned down
instead of the loser I accepted were still available. One in particular
was almost a classic, in a perverse sort of way, to wit: A). she couldn't
tell me, that's not her department. B). she would put me on the hot-list
(whatever that means - since this broker doesn't call anybody). C). if
I saw any posting via dice (through ba.jobs.contracts) I should call and
tell them to submit my resume. This is a broker who wasted 3+ hours of
my time on interviews with various warm-bodies/dead-brains to get to
know me and determine if I was an acceptable candidate to send off on
interviews.
 
>
> > [ my own text deleted ]
>
> In the end, it's up to the IC to find work, whether through a broker or
> on your own. Brokers will seek you out if you have the skill sets they're
> looking for. If you don't have them, you aren't going to get called. A
> COBOL programmer is not a valuable candidate for a client/server position,
> for example.
>
 
        I see at least 20+ postings a day on ba.jobs.contracts that I
should have been called on if only the brokers had their key-word search
programs scan the database before posting to the internet. I have to
call them. I think that posting has become too easy for the brokers;
why work when the internet and all of those hungry consultants can do
it for you. This is also why I no longer understand the marketing cost
component of the brokerage fee, am I paying for client lunches out of
my earnings? I thought that that portion of the spread was supposed to
be used for things like up-keep of the database system, client identification,
pro-active marketing of consultants into client organizations, and
keeping the consultants happy (__We Are Every Bit As Important As The
Client__ -- without us to broker, there would be no contracts; clients
or no clients).
 
> > [ my own text deleted ]
>
> There are a number of fine brokerages to work with and for. There are also
> extremely shitty ones. One learns this through trial and error and being
> in the business awhile. You must realize that the broker's position is to
> find people that meet the client's requirements, not try to place every IC
> on the street for the sake of getting a billing off of a warm body for a
> month. Brokers that do this don't last long.
>
 
        I agree. I even have a list of brokers who I will or will not
work with/for. There are even a choice few who I will bring business to
that I have generated myself just to carry the paper and cash-flow (and
the are not NACCB members -- straight corporate to corporate contracts
with weekly billing and a net-10 payment cycle).
 
> > [ my own text deleted ]
>
> I think you need to go back to Business 101. If you want to cut out brokers,
> start spending the time and money to market yourself and develop a
> clientele, along with the requisite lost billing that marketing entails. If
> you don't want to market and simply bill your time, then continue to use
> brokers. That 15% you're complaining about is the cost of marketing, whether
> it's done by you or a broker - what's the difference?
>
 
        I think sending me back to Business 101 is a little harsh (I did
very well the first time, thank you). The reality of the current market,
however, dictates that hired-gun type of consultants must deal with the
brokers because that is who the client's post their requirements to. I'm not
even on the short list for the many hundreds of departments that are
posting requirements for contractors at a company like Sun or HP.
  
        I spent many years supporting clients that I had developed on my
own and am still quite capable of doing so if needed. The problem is that
the true cutting-edge work is going on in corporations that post requirements
to the brokers and can't be identified any other way. If you want to do
this type of work, and I do, you have no choice but to deal with the
broker community.
 
        As to the 15%, fine, but I want the fee cut and more money in my
pocket if I have to do all of the legwork.
 
        Finally, thanx for your comments, this is in fact the type of
discussion that I was trying to provoke (and yes I meant to use that
word). I look forward to future comments from you, a well-argued point
of view should always be respected.

-- 

	Regards,

	b c++'ing u,

	%-) sjs

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Stefan Jon Silverman - President                     SJS Associates, N.A., Inc.
                                                            572 Chestnut Street
Distributed Systems Architecture & Implementation      San Francisco, Ca. 94133
                                                            Phone: 415 989 2741
E-mail: sjs@sjsinc.com                                      Cell:  415 519 3494
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