Freelancing for Agencies—Pros and Cons
If you’re a freelance copywriter, designer, photographer, or filmmaker, there’s never been a better time to freelance for creative agencies of all kinds.
The last few years have turned the working world upside down. Whether it was the pandemic, the “great resignation”, mass layoffs, or “work from home”, nothing is the same as it was.
What does this mean for creative agencies? They’ve become more flexible and more open to working with freelancers. And that could be an ideal opportunity for you.
What Do Agencies Like About Working with Freelancers?
From a recent MarketerHire report:
Working with freelancers saves time and money. It’s faster and easier to hire a freelancer than a full-time employee. Agencies only pay freelancers for projects as needed.
Agencies don’t pay freelancers benefits or vacation pay. From their perspective, lower overhead, and significant savings.
Lots of freelance talent to choose from to get high-quality work and expertise. Agencies can afford freelancers who are better qualified than many full-time staff.
Agencies benefit from far greater agility. If a freelancer doesn’t work out, they can find another one. This also reduces hiring concerns. Hiring the wrong person is expensive!
What are the Pros for Freelancers Working with Agencies?
If you’re a freelancer who has never worked with agencies, there are many good reasons to start now. Let’s begin…
Freelancing for Agencies Gives You Access to Bigger Clients
Depending on the size of the agency, they likely have more recognizable clients than you do. This could be your opportunity to grow your portfolio with more prestigious names. You’d never get some of these clients directly, but you could work for them through an agency.
A better portfolio is the gateway to higher-paying jobs.
Access to More Clients at Once
If you do an excellent job on one agency client, there’s a reasonable chance you’ll get called to work on other clients too. Agencies are looking for dependable freelancers who turn out high-quality work.
They’ll keep coming back to you for more. It’s a great way to get a variety of projects and names into your portfolio.
Agencies Understand the Business
In most cases, you’ll quickly find yourself on the same wavelength with the agency. They’re in the same business as you are—they understand the work and the requirements. Of course, there are exceptions, but in general, you should be able to work together efficiently right from the start.
We’ve all had clients that just don’t understand what we’re doing, right? Agencies should get it. If they don’t, move on.
They Generally Have Reasonable Budgets
Once again, it depends, but in most cases, agencies will have reasonable budgets for their projects. Realize that in most cases, they’re charging their clients much more than what you would charge working directly, so agencies can afford your rates.
Think of it this way—you’re selling wholesale, but the agency charges the clients retail—big difference.
Agencies are a Funnel to Repeat Business
As long as you deliver and meet expectations, agencies will keep calling you. If the client is happy, the agency is happy. This is the way to get project after project with no pitching and no competition.
Use the Agency to Expand Your Network
Once you start working together, you’ll likely meet other creatives, project managers, and account people (F2F, Zoom, phone, email).
That can easily lead to more work, either within the agency or as some change jobs or go freelance themselves, directly with them in their new relationship.
An Agency Might Offer a Contract or Full-time Position (If You Want It)
Hiring you on a freelance basis is an easy way for an agency to try you before making a bigger commitment. So, if you’d consider a contract or full-time job, this may be the way in.
You might look for the best of both worlds. In the past, I had a half-day full-time job which gave me the other half of the day to work on my freelance business. Read about my easy transition from full-time to freelance.
For you, it could be the security of getting a half-day salary while also working on your freelance projects.
What are the Cons for Freelancers Working with Agencies?
Working with agencies isn’t always a bed of roses. Sometimes, there are issues. Let’s dig in…
An Agency May Try to Lowball You
Yes, I know I said that agencies can generally afford your rates because of the wholesale/retail arrangement. But some agencies get greedy. They want super-low prices to make even more.
You can decide whether it’s worth working for them. But don’t fall for “we’ll pay a low rate now, but much more on future projects”. It never works out that way.
Also, forget about the “promise of volume” story. “We’ll give you lots of low-paying work.” No thanks. Move on.
Some Agencies Pay Very Slowly
Be sure you have a “payment discussion” before going too far with a new agency client. Let them know your payment terms before you start on the first project.
Are you looking for a down payment on each project? Do you need that money in the bank before starting? On more significant projects, will you progress bill?
If you agree to get paid at the end of the project, be sure you also agree on how long. 10 days? 30 days?
Some agencies have procurement departments. It’s their job to get the best prices for the agency. They get rewarded for “wins”, saving the agency money. So, they may try to negotiate you down. Resist lowering your estimate, but offer them a discount for quick payment.
For example, your payment terms could be “Net 30 Days, 2% Discount 10 Days”. They’ll see the potential of a 2% discount as a win for them.
Assuming you’re working on project-based billing, raise your price by 5%, which more than covers the discount. To most clients, an estimate of $5,250 is the same as $5,000. The $250 is your 5%. Your 2% discount off $5,250 is $105. Win/win, you and the procurement department.
In general, get an agreement in writing on all payment terms. Don’t be afraid to remind them if they don’t meet them. Avoid having to wait weeks or months for payment. Remember, it’s not personal, just business, and business is a two-way street.
Some Agencies Only Call in Emergencies
It happens. The client has a last-minute project for the agency. Everyone is busy. So, they call you, the freelancer. It’s a great project, but they need you to start RIGHT NOW!
So many things to think about… If this is a good agency client, and emergencies come up once in a while, you could accommodate them. You’ll be a hero if you do.
However, if every job is an emergency, is this what you really want, even at any price? You’ll have to decide. Is this a rare screw-up, or are they simply disorganized?
Agency Clients are Not Your Clients
This is worth thinking about. If you’re working for an agency, they are your client. The agency’s relationship with the end client is their relationship, not yours.
Usually, this is easily understood. But what if that client calls you directly and suggests you could do a project for them without the agency? It happens. There’s only one answer, and that is no. You can’t compete for the same client with the agency you’re working for.
However, if your relationship with the agency ends, all bets are off. But in this case, be sure you didn’t sign a contract that still binds you. See the next section…
Watch Out for Restrictive Contracts
Some agencies want you to sign a contract with them. If that’s the case, you’ll want to review it carefully. It might be worth having a lawyer look at it.
What to look for in a contract? Does it restrict who else you work with now? Does it limit any future work you might do, especially directly for their clients?
Are you allowed to include the work you do for their clients in your portfolio? Does it address payment terms or volume discount terms?
In general, you want to avoid signing contracts. Some freelancers turn the tables and have their own contract that they want the agency to sign.
Think about how you want to handle contracts. If the agency insists, and you refuse, you won’t likely be working together. That may be for the better—your call.
Ethical Considerations Working with Agencies
A key ethical consideration you should keep in mind, whether or not you signed a contract, is that you shouldn’t be working on clients that compete with their clients.
So, to use an obvious example, if you’re working with the agency on Coke, you shouldn’t be freelancing for Pepsi (or any other competing drink).
This can be a challenge if you specialize in a niche since it’s easy to bump up against the competition. Keep it in mind. You can’t ethically work for both.
Learn more about working with agencies and all other clients in my book, How to Start a Successful Creative Agency. It’s the essential business guide for graphic designers, copywriters, filmmakers, photographers, and programmers.
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