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I build websites and webapps for companies and agencies. About five years ago, an agency hired me to build out a big website for a client. I host the website on my server but the billing to the client still goes through the agency. The client and agency have a long relationship and the agency provides other services (design, print, etc) to them that I have no part of.

I have several grievances with the current situation:

  1. The agency charges the client 3 times (seriously) the amount I charge them.
  2. The agency slows communication to the client down.
  3. The agency is slow to pay, despite multiple reminders.
  4. The agency doesn't give me more work. I have nothing to lose.

I would like to transition the client to pay me directly for my services. It's going to make dealing with their maintenance easier and it'll mean I can make more money from it.

The client knows about me (we do talk directly about everything except money) so there's no problem talking to them, but as I say, they do have (and will continue to have) a relationship with the agency.

And I have no explicit legal obligations to the agency. No non-competes. No NDAs... But I've never done this before so I'm not sure if I need to be cautious of statutes that stop people doing what I'm suggesting.

But assuming this is —legally speaking­— on the up-and-up, how do I best convince a client to deal with me directly for my services, and how do I inform the agency?

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    The first point is not a grievance. That's just business. – jcm Sep 27 '14 at 2:42
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    This will get you in legal cases (with bonus of loss of goodwill, peace of mind and time). Look for greener pastures elsewhere. – user8961 Sep 27 '14 at 5:27
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    Is there any scope to negotiate a better contract with your agency instead? – Rup Sep 27 '14 at 8:45
  • Does the client use the same agency for other projects? – HorusKol Sep 29 '14 at 0:04
  • Do you know if the big client even works with one man companies or independent contractors? – Eric May 29 '15 at 12:14
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But assuming this is —legally speaking­— on the up-and-up, how do I best convince a client to deal with me directly for my services, and how do I inform the agency?

It's a huge assumption, but let's assume for now that this is all legal and go with that. And we'll assume you are willing to live with any adverse consequences that may follow from your actions.

You simply prepare a presentation for the client indicating how much you will save them, how working with you will speed up the communications and how this new arrangement will provide better service for them.

You can also remind them how much they have liked your work before, and how they will get huge benefits by cutting out the middleman.

Be prepared to explain how you are a competent business that they can trust will be around for the long run, and presumably has the proper bonding/insurance/etc already in place.

Be prepared to answer their questions about why they should trust you now even though you are willing to do an end-around past the agency - an act that some would consider less than trustworthy.

Be prepared to explain how, even though they already have a long relationship with the agency and even though the agency provides other services they need, it will still be in their best interest to split this one service off from their agency agreement.

Also be prepared in the event they decide not to work with you any more because doing so would conflict with their normal business practices, and immediately have the agency remove you from their project.

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    Upvote! Because, unlike my answer, you are actually answering the OP's question :). – MrFox Sep 26 '14 at 17:41
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    +1 because as one of these clients that is mentioned here, there is a a lot more to take into consideration than simply the costs which may be visible to you as a provider. Its not as clear-cut as "you'll be paying $$ when you were before paying $$$$". – Burhan Khalid Sep 30 '14 at 12:54
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This is usually a bad idea.

1) While you may not have any explicit NDAs or non-competes, the client might have something in their contract that forbids them to do business with the agency's contractors. Even if they proceed with moving away form the agency, your relationship with them might cause them a lawsuit. Legal fees trump web development fees very quickly.

2) You don't always need non-competes to sue for this sort of thing. Depending on where you live there might be other laws that prevent "theft" of business by employees/contractors.

3) Even if none of the above becomes a problem, the word might spread that you do this sort of thing to other agencies and people in your area. Stealing business is generally frowned upon, and is probably the one thing that is worse than incompetence.

  • Be advised, contract stipulations that 'forbid them to do business with the agency's contractors' are usually unenforceable. They reason they do exist in principle is in the case of a true Trade Secret misappropriation. If someone can show that a company hired you, outside the channel, for the explicit purpose of using your inside knowledge to steal another's trade secrets you may be barred from Compete'ing with them. – Andyz Smith May 29 '15 at 13:40
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Personally, "taking" them will be a fairly poor option only because it looks underhanded and as @MrFox suggested you don't know what kind of legal position you're attempting to put the client into.

However, if the agency that pays you is slow to pay and it has become a multiple times kind of situation, I would inform them in writing that grace periods will be discontinued and that any future late payments will result in an immediate discontinuation of service.

They count on the client for continued services and their reputation is on the line. If they are continually late, then either they are very poor money managers and the client will dump them after not too long anyway or they are very good money managers and have determined that you are a vendor for whom they have no respect and no resources to challenge them.

Ultimately they'll try to threaten you with taking the client elsewhere, yadda yadda. They're not paying you on time now, and it costs you time/resources to have to chase them for that money. It'll cost them time and resources to relocate the client's hosting, and ultimately (if they're good money managers) they'll get the hint that it's more cost effective in the long run to continue paying you on time than it is to move the client or risk disruptions that damage their reputation.

It's a fairly strong hand to play, but if the agency is not throwing you anymore work and they're not paying you on time anyway I'd say you really have nothing to lose in it. I've found in hosting situations such as this, my clients have always found it too time-consuming and expensive to switch services, and the ones that have done it anyways have gone on to find the companies they switch to are significantly less tolerant of late payments.

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The Client probably already has a contract with the agency, so you have one of a few real options here.

You can buy out the contract from the agency. Meaning that you pay a signifigant portion of the contracts remaining payments up front and take over the contract and work with the client to make sure that your obligation with reguards to the contract is maintained. This is going to be a large payment up front but when the contract expires in a year or so you should have the upper hand in negoatiations for the renewal of that contract.

Another option is to wait until the contract is up for bid against the agency. This option is kind of risky because if the client does not choose you the agency could choose to host it elsewhere. But since you are already hosting and could presumably undercut the agency this may give you an edge. It could also be that the hosting is rolled up into other contracts with the agency and the company could decide that they prefer the easy of managing one contract over the hassle of managing many smaller contracts that would save them a little money on the expense sheet.

Another option you have if you do not have a contract with the company is to raise the fees that you charge. You do not have to explain why just let them know with the required advance notice that your fees will be increasing to $X as of Y date. You run the risk of their choosing to find another service provider but more likely they will just take the hit so long as the increase is reasonable.

  • this is like one of those options that are not really options... – amphibient Jul 9 '18 at 15:37

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