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I have been working for my employer 3+ years.

Current relationship:

  me -> employer -> vendor -> client

My employer was taking major cut.
So my question is how to cut the vendor out

Desired relationship:

  me -> employer -> client

So:

  • What will be the impact?

  • What are the ups and downs?

  • If I do that, will my client face any legal issues with the vendor?

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    You should check (if possible) the contract between your employer and the vendor. There you will see if there are any legal implications of doing this (most likely there will be)
    – DarkCygnus
    Commented Sep 10, 2019 at 17:59
  • Also, you need to consider if the vendor is adding value. As an individual contributor, it's easy to dismiss the value that a "middleman" is adding, but in many business relationships, they play fairly important roles in terms of managing relationships, setting expectations, and other soft, indirect deliverables.
    – dwizum
    Commented Sep 10, 2019 at 19:00
  • Is this the only client the vendor has brought to you? Outside of legal concerns, you may be hurting more than you are saving if this vendor has brought you consistent clients. If you're clear legally, and the amount of profit gained from cutting them out outweighs the combined revenue of all your other clients through that vendor then sure, go for it. Hopefully your client isn't partial to the vendor and wouldn't see this move as unnecessarily aggressive and shady. Dollars aren't the only thing. Reputation is important as well. If you rely on vendors it might not be wise to piss one off. Commented Sep 10, 2019 at 19:33
  • Find a new client yourself without using a vendor. Then you can work directly for them from the beginning without any consequences. Commented Sep 11, 2019 at 1:39

3 Answers 3

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Read your contract carefully, or even better, pay a lawyer for one hour of her or his time and get professional advice. These things are usually covered in contracts, and before you do something that costs someone else money, check with a lawyer to see how much they can hurt you in return. Their fee will be a lot less than if there's a ruling against you in the future.

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me -> employer -> vendor -> client

employer was taking major cut.

You say employer was taking major cut, but want to cut the vendor out? That's not possible for you as an employee, as the relation is between employer and vendor, not between you and vendor.

If you really want to earn more, cut both the employer and vendor out in future jobs and find a client2 who is ready to employ you directly rather than via middle tiers.

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I will say that @rath's answer is very true and very important.

With that said, though, there are many cases where the vendor-client can go to the employer directly and say "Hey, we have had a great time with Ashish and we'd like to hire him as a full-time employee, can we negotiate a placement fee?"

If the contract company (your current employer) is smart, they will often accept something like that, knowing that maintaining a good relationship with the client is better for them in the long term. Then the client/final employer pays the same kind of fee to your current employer that they would have paid to a recruiter, and everyone's happy.

Some places are not keen on this, however, or have circumstances that otherwise prevent it, so this advice may not always be right. Do consider checking with an employment attorney.

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