Subcontracting Carries Perils Too

Many sole practitioners and even small agencies occasionally supplement their ongoing retainer client load by subcontracting with other agencies and consultants. While such a move can help bolster the bottom line, especially in tough economic times, it's also fraught with perils -- and not just for the lead agency.

The attractions of subcontracting, both for the lead agency and their subcontractor(s) are obvious: For the agency, taking on additional talent on a project-by-project basis allows the lead agency to broaden their breadth of experience and to overcome any disadvantage from its small size. Likewise, for the partnering consultant or agency, they also get an experience and increased revenue, even when you take into account the fact that a subcontractor almost always lowers their rate.

There are many cases where individual counselors and/or small firms have worked together for years and have cultivated relationships that are fruitful for both. However, what's not mentioned nearly as often is when the inverse happens, and a subcontractor and/or agency partner is penalized as a result of actions taken by their lead partner.

For example, if a client has any kind of issue with the lead agency/partner that leads to a termination of the account, more times than not the subcontractor/partner is also out the door too. There are times when the partner can resurrect the relationship, but just as often as not, the former client will be angered enough by the actions of the lead agency that resurrecting the relationship becomes impossible.

So while it may seem that only the lead partner has any vetting to do before a new partner relationship starts, in reality the subcontracting partner should do vetting as well. Take note of actions done during the sales process, if you're brought in that early, that are red flags. These are often good indicators of issues that will linger even if the account is won. Also, insist that any partner will listen to your views too because often a subcontracting partner is doing the lion's share of the actual tactical work. Given that, it only makes sense that they be willing to take your views into account.

Both sides of any partnership should address any conflicts and/or crises as soon as possible to avoid them from causing irrevocable harm. Also, make sure that both sides agree on philosophy. I can't say this enough. There are so many consultants and firms out there that believe their philosophy is the only way and that's honestly a tough situation to be in from a partner's perspective. In the end, what should really matter are the results, not how you got there.