In many cases, independent consultants enjoy a simple and efficient working relationship that involves only the client and themselves. There are certain instances, however, in which a project may require additional help. Whether you need services outside your field, someone with more expertise in a particular skill, or simply require additional “manpower,” you may consider hiring a subcontractor to assist on the project. Before hiring a subcontractor, here are a few considerations and preparations you should keep in mind.
Have a Project Management Plan in Place
Consultants who have never worked with a subcontractor before may take their own autonomy for granted, and fail to prepare for the additional management responsibilities they will incur. When adding another consultant or subcontractor to a project, you will be responsible for providing them with the necessary information and client materials they will need, and will also serve as the main point of communication. You need to have a plan in place that assures that your subcontractor gets complete and timely information, and that all deliverables are produced on time and as specified.
Make Sure They’re Insured
As an independent consultant, the right business insurance is essential; it protects you against loss. Insurance also mitigates your clients’ risk, and many clients will require that all consultants be insured. When hiring a subcontractor, you would be wise to require the same; while a client could go after the subcontractor for any loss they cause, you may be held ultimately responsible if the subcontractor is uninsured. Be sure to review your own business insurance policies to verify that they cover damages caused by subcontractors, as some will not. In addition, some business insurance policies will consider any uninsured subcontractors you hire to be an employee of your company, meaning that your premiums can increase if you are held financially responsible for their damages.
Prepare a Contract
Just as you should make a contract a standard part of your client agreements, you should also insist on using a contract to legally bind your relationship with any subcontractors. Your contract should clearly outline the terms and scope of their involvement in the project, defining their exact responsibilities and roles. It should also explicitly define their role as a subcontractor, not an employee; failure to do so may present tax-related or other legal complications down the road.
Consult with Your Clients
If you plan on hiring a subcontractor from the outset of a client project, or simply wish to reserve the right to, this should be clearly stated in your contract with your client. If hiring a subcontractor is an unforeseen necessity in an existing project, consult your current contract to ensure that the client doesn’t expressly prohibit it. If it isn’t directly prohibited, professional courtesy still suggests approaching your client before hiring a subcontractor, if only for the sake of maintaining strong client relationships.
Unless explicitly agreed upon or outlined in your contract with your client, you will likely be responsible for all costs and fees associated with hiring a subcontractor. Because of this, it’s important to factor the cost of a subcontractor into your bill rate and pricing structure, or consider how hiring a subcontractor will impact any already agreed-upon and contracted costs. Also keep in mind that in addition to the subcontractor’s salary or rate, you may also be responsible for their materials and supplies.
Have advice would you give to other independent consultants preparing to work with subcontractors? Tell us in the comments.