Retainer
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- gramme
My current largest client wants to place me on retainer. They're a great organization, they provide a lot of consistent work, and there's a high level of mutual trust. I would become their agency of record, more or less.
I'm traveling to their HQ next week, and this is one of the things we'll be discussing. They've thrown out the idea of me joining their healthcare plan, on the basis that it would cost me less than my current out-of-pocket situation. The catch is that I'd have to be considered a minimum-hour (30 hr./wk) full-time employee.
As soon as I heard that, I saw it as an immediate red flag. I've worked really hard and have spent a formidable amount of money to promote Metagramme as a stand-alone studio.
Either way, I'll say yes to the retainer, but am I crazy for not wanting to become an employee, even if it's just on paper for insurance reasons?
- gramme0
In other words, I'm more than willing to pay the price of autonomy, as long as it's not a really irresponsible move, financially speaking. I'm just not sure what the cost difference will be.
- dan53820
Insurance=good
but what are they going to require of you thats new? That would be the question. What has changed in your relationship with them that it is more profitable for them to bring you on as an actual employee?
- monospaced0
Would this prevent you, formally or informally, from retaining your own clients?
- gramme0
Well, here's a little background info. They're a non-profit news organization. I've been designing all of their promotional, marketing, & ad stuff since February. Going on retainer, the one responsibility that will be added to my current role is to contribute an information graphic to each issue of their magazine (2x per month).
It would actually cost them a little bit more to put me on their insurance plan, but they're just nice people. I've become good friends with their publisher, who is my primary contact there. He's just trying to help lower my business and personal expenses.
As far as I know, there would be nothing preventing Metagramme from proceeding with business as usual, i.e. as a full-service design studio. Since February, most of my income has come from them, and I've spent probably an average of 20 hours per week working for them. This setup would however mean that if I got a few more clients who bring substantial work, I'd have to hire someone just to keep my head above water. I don't want to spend all my time working for these people, despite the fact that I like them.
- gramme0
Oh and eventually I'll be involved in a redesign of their magazine, as well as an overhaul of their visual identity. We've actually already started to do some of that work in subtle ways through the literature I'm currently designing.
- Orbit0
Gramme, I ask this a friend... but haven't you learned a valuable lesson already, about discussing serious business matters that relate to clients on here, and partcularly about not including your company name in the posts?
- johndiggity0
i don't know that this is the best place to seek business advice anyway. witness today's "compensation question" thread.
that aside, you know the people you are working with better than we. if you think it would be advantageous to both parties, then go ahead. if it doesn't feel right, then don't. there's always the case in a firm with a lot of older employees that adding someone younger than the average could actually bring their premiums down. perhaps that is the case?
- plus they're hoping to harvest his sweet, sweet organs7point34
- gramme0
horbit, I appreciate your concern, but these people wouldn't care about me posting the info above. They aren't paranoid, anal retentive, or insecure. What's more, I've brought up all these concerns with them before. I was merely hoping to gain some insight from a designer's perspective, because they don't have strong opinions either way about how I handle insurance and taxes. I think they would see this sort of discussion as me doing my homework so as to be better educated about business arrangements. Regardless of what I decide, I'm the only one here who stands to take a financial hit (i.e., paying too much money for insurance and taxes simply because I want to be independent in every way).
At any rate, maybe JD is right about the futility of such questions here. I'm talking about these things w/ my accountant, so we'll see how it shakes out.
- bigtrick0
If you take them up on it, does that bind you on paper to working for them for 30 hours/week? I can see that in the future, if some more exciting work comes along and demands a lot of your time, you might be stuck since you are already obligated to work for your current client/employer. If you were just standalone metagramme, I'd think you would have more independence as to how you choose your work.
- That's a good question, I'll bring it up next week.gramme
- jamble0
Are they just covering your healthcare because they're nice or is there a direct benefit above the normal retainer you were mentioning?
It seems pretty decent for them to do this and if you're happy with the terms then why not just give it a go.
- bigtrick0
If you take them up on it, does that bind you on paper to working for them for 30 hours/week? I can see that in the future, if some more exciting work comes along and demands a lot of your time, you might be stuck since you are already obligated to work for your current client/employer. If you were just standalone metagramme, I'd think you would have more independence as to how you choose your work.
- gramme0
Thanks all. I think if we don't put a weekly amount of hours in writing, but rather we simply outline my responsibilities as a *vendor*, not an employee with a boss, then I won't become so bound that I can't keep working/looking for other clients.
I've done the in-house thing before, and hope to never go back. As long as they understand our working relationship won't change, that I'm not giving up this here desk, I think I'll be golden.
- johndiggity0
did you not allocate hours for them into your monthly retainer? what type of agreement do you have with them re time? curious about this.
- gramme0
@JD
Currently, I simply track my hours for design + production, then invoice projects when finished. We don't have any agreement in writing thus far. The only exception so far has been a campaign I did that took several months—for which I wrote a contract and collected a retainer up front. So up until now, there hasn't been a monthly retainer. The situation we'll be discussing will be for a yearly retainer. This means I won't need to send invoices, and I'll get regular bi-monthly checks from them. The amount we're discussing is based on what they've paid me thus far + new responsibilities I'll take on. I think the contract will basically say that I'll be performing X services for them, and they won't hire any other outside designers. I don't know what an "agency of record" contract looks like, but I think it's effectively the same thing.
- johndiggity0
right, but are you allocating a certain number of hours they have available for use/month as part of the retainer agreement?
- I'd rather not, if I can help it. If they need to call it 30 hrs./wk for insurance purposes, that's fine.gramme
- what's to stop them from monopolizing all your time? maybe treat it like rollover minutes?johndiggity
- Yeah I'm not sure. Like I said, they're really reasonable so I'm sure we can write in protectionsgramme
- that will maintain enough free time for me to work w/ other people.gramme
- Like, specifically outline the types of projects I'll do, the general frequency of them, etc.gramme
- raf0
This could be the best of both worlds, being employed with a regular income and self-employed at the same time. In a lot of European countries only ex-employed people are eligible for welfare, even if they paid social security when self employed.
The downside might be you couldn't write off expenses off income you earned with them, but again, this could be different in the US.
- showpony0
gramme, man, i'm really not seeing a downside to this. they help you out, but you still keep you autonomy. win/win.
- johndiggity0
...but if shit ever goes south with this client, it could screw you up. as much as it sucks to pay more for insurance, it would be worse to run your own business yet feel beholden to someone else.
- kld0
30 hours a week is really just like 1/3 of a week, No?
- huh? 90 hour work week?section_014
- more like 3/4 of a weekmonospaced