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I have been working on a month-to-month retainer for several years for the same firm, and have been asked to propose changes to my arrangement that would "provide more stability and predictability", partly as an acknowledgement of my contributions (which, it is agreed, warrant much more stability and recognition than an "at will" retainer), and partly to ensure that I cannot be easily terminated (e.g. should the work I do run afoul internal politics).

What are my options in this case? I do not want (and I'm pretty sure my client does not want for me) to become an employee. Ideally I would like the changes to my existing arrangement to be minimal, or at least simple, with the primary goal of ensuring that I continue to make at least as much as I now do, doing essentially the same work, for as long as possible, without suddenly loosing my retainer fees. I assume I can ask for things like a few months' notice of termination, or a few months' fees following termination; but I'd prefer (and believe I can get) more. I've been working for my client for over a decade, and the client has recently been funded for at least another 5 years. Can I ask for a guaranteed contract for 5 years?

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  • FWIW, I'm hoping that someone with actual experience with this can provide an answer. So far all the answers are pretty generic or mere opinions based (it seems, correct me if I'm wrong) on no direct experience.
    – fasted
    Commented Apr 11, 2015 at 16:23

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A "guaranteed contract for 5 years" is a big commitment from a contract employer. I don't know what country you're in, but in the US, there may be IRS rules that could prohibit things like that (you would be considered an employee by the IRS). There is a lot of leeway between a 5-year contract and renewable contracts with shorter terms.

Would you be happy getting the same pay for the next 5 years? Would you incorporate rate increases along the way? Maybe you want a shorter renewable term. The contract binds you as well as them (unless you have termination clauses built into your contract).

I think a 6-month or 1-year contract would be easier to negotiate than a 5-year term.

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  • That's part of the question: How to express this in a way that complies with US tax code. A large termination fee might be a big part of it. One way of approaching this question is whether there are rules of thumb for stability in contracts in exchange for history of service. E.g., after 10 years, is it out of the ordinary to ask for X months notice and Y months pay on termination? What are the maximum X and Y that are within experience? Given that this is mutually desirable (my employer wants me to have more stability and wants me to be hard to fire) I can probably ask for that.
    – fasted
    Commented Apr 10, 2015 at 13:54
  • The IRS questions are along the lines of: who provides your supplies? Do you set your own hours? Do you work in your space (as opposed to your clients space)? See this: irs.gov/Businesses/Small-Businesses-&-Self-Employed/… All these other details are between you and your client and are completely contract-dependent. There may be customary things in your industry but I don't know what that is.
    – Voxwoman
    Commented Apr 10, 2015 at 20:01
  • Own hours, own supplies, own space, etc. I have total control.
    – fasted
    Commented Apr 11, 2015 at 16:22
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A five year retainer would not fit with the way most businesses are run. From what you describe I think you may want to talk to them about you getting a lawyer to draft a contract for an ongoing retainer from which # months notice is required from either you or X,Y, and Z company officials unless both parties agree to a shorter term with a penalty of $# dollars should the company initiate termination of the agreement without the proper notice.

Depending on your country you will need to be careful of rules as to what constitutes an employee but a decent lawyer will be able to make sure you are able to do things by the book.

Good luck and let us know how it turns out for you.

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You can always ask. If there's no ink to paper there's room for negotiation. Ask for what you see as fair value for your services. Write up your own contract and see what they say.

Maybe even make it a joint venture. Draw up a rough draft for ideas you have and take it to them. Ask them "Is this something similar to what you had in mind?"

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  • I'm more interested in what the scope of actual experience and practice is here. If a 5 year guaranteed retainer is not unheard of, I should probably just ask for that.
    – fasted
    Commented Apr 10, 2015 at 13:49

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