We may refer to ourselves as free-lance consultants, but I prefer the term ‘contractor’ because it emphasises that we work based on a signed contract. Most of us rely that the standard contract contains all the relevant articles to ensure that all eventualities are covered and that actions in case of exceptional circumstances are clearly stipulated. The majority of contractual agreements are with recruitment agencies (such as Red Commerce) and will expire without any issues. But when you intend to remain a contractor for a long period of time, eventually you will encounter contractual difficulties. That is when you enter ‘the dark side of contracting’.
For example, you find yourself at a customer that does not want to give you any work. Apart from being bored, you sense that it could have a negative impact on maintaining your skills. Most contractors want to avoid to involuntarily getting on board of the gravy train. They know that you can’t build a career based on easy money. Luckily you have the option not to extend a contract. In extreme cases you could also decide to use the notice period as agreed in the contract. Whatever you may decide, I would advise to inform your recruitment agent before you make any decision as he/she may be able to persuade the customer to take full advantage of your potential.
It could also happen that you hear the news on your first day of a new assignment that the customer has cancelled the contract. Then the ‘termination clause’ comes into effect. It is quite common that the recruitment agent includes the article that a contract with the free-lancer is immediately terminated when the customer decides not to use their request for consultancy services. This can lead to a substantial loss for the contractor. What if this happens for an assignment that is abroad and you have made travel and accommodation arrangements? It makes sense to be aware that an immediate termination could happen, especially during the first month of the contract. I have been very fortunate that this has never happened to me, but I am warned. Sooner or later it could be my turn.
A very extreme example of ‘the dark side of contracting’ happened to someone that I met last year. Sadly he passed away a few months ago unexpectedly. Somehow I sense that it was caused by the stress he had to endure before I got to know him. I want to share his story to warn all of us.
Imagine you have started a contract at a Fortune 500 company via a multinational consultancy firm. Immediately you are adding value for the customer and enjoying the challenge. You believe that there will be no issues during this assignment. But soon after you send your first invoice, the consultancy firm signals that there is a problem. The customer does not want to pay because the time sheet was signed by someone who was not authorised to do so. Soon you realise that the customer is not willing or able to appoint anyone with the authority to sign your time sheets.
What to do next? You would think that the consultancy firm will assist you to urge the customer to appoint someone eligible to provide a valid signature to trigger payment. But to your surprise the consultancy firm does not want to ‘upset’ the customer. So you are forced to examine your contract in detail to find any clauses that may help you. Also you seek legal advice. This happens while you still make long days at a customer that is not willing to pay you and contractually bound to a consultancy firm that does not want to support you. Whatever happens, your professional and personal bills still need to be paid. Of course you can imagine that this triggers a lot of stress at home.
Expect some tough weather ahead, when you enter ‘the dark side of consultancy’. Therefore it makes sense to be aware that the unlikable could still happen. So preparation is the best advice I can give you. First, make sure you have enough cash in the bank to survive times of financial uncertainty. Second, always opt for cancellation insurance when making travelling arrangements. Third, define how much business risk you are willing to take and get the proper insurance to easy your mind. Finally, only do business with those recommended by other contractors.
Regards,
Isard Haasakker.
