It's not stealing if...

June 16, 2011 3:13 PM

An etiquette/ethical question about consulting contracts and dealing with recruiters. The question is: would this be considered stealing a contract?

I am fortunate enough to find myself in demand due to my experience implementing a certain enterprise software suite. I recently quit my job for personal reasons, so now I'm looking for my first contract job. I found a small consulting firm that I want to get my contracts through because I previously worked with the founder and because they are offering me better rates than most firms (due to low overhead - I keep more of the total hourly rate). Unfortunately, due to a) their low overhead (small sales staff), b) this being my first time marketing myself in the contracting world, and c) I worked on a very specialized module that isn't extremely widespread, it's taking longer than I hoped to find a contract through them.

I am also fielding many emails and calls from other consultancies' recruiters. Most are giving me a BS song-and-dance, but a couple that I will be talking to soon have actual contracts in my area of expertise ready to go. The issue is I would rather work with the small consultancy: the benefits are better and the pay is better even for equivalent contracts.

Here's where it gets sticky: It is likely that I will talk to one of these recruiters about an contract and find out the details, including who the client is (one has already revealed the client's name by email, so this is not a hypothetical). These conversations never include signing a contract, NDA, or non-compete agreement. At some point they'll offer me an hourly rate. Based on the estimates that larger consultancies have given me, that rate will likely be significantly less (often $20k/yr) than what the small consultancy would offer me for the same contract (again, low overhead). If the big consultancy's rage is equal to what I can get elsewhere, great: I'll work with them. But if they offer me a low rate and refuse to match my expectation of what I can get from the smaller group, what I would like to do is turn down the offer, inform the small group of the contract position, and take the position with the small consulting group at a higher rate of pay.

But that feels a little like stealing, or at least unethical. On one hand, if I hadn't talked to the original recruiter, I wouldn't have found the contract - so I should not take it from them. On the other hand, if the original firm can't meet my hourly requirements, then what obligation do I have to them? If they could find a candidate for cheap, they would already have filled the position. Do I really have an obligation to work for less because I heard about the contract through a large firm? At this point there's no contractual obligation between me and the large firm, but I'm unsure of the ethics of the situation.

Help me out mefites - if I find a contract position through one firm, but that firm doesn't meet my pay requirements, is it unethical to take that contract to another firm that will pay me more?

posted by Tehhund to work & money (13 answers total)

I think it's unethical, but more to the point, it's bad business. Sure, you have no contractual obligation, but that big firm and everyone they talk to will forever think of (and speak of) you as the kind of unprofessional person who would swipe contracts, and they'll never offer you anything ever again.
posted by axiom at 3:22 PM on June 16, 2011 [2 favorites]

I've definitely run into unethical recruiters, but that doesn't change the fact that this is indeed unethical. One thing you can do is bargain with the recruiters that introduced you to the job.

I once found out that a company wanted to hire me but were having trouble taking me on because it turned out the recruiter firm was marking me up astronomically. I worked out an arrangement that involved a less ridiculous markup but did not cut out any of the parties involved. YMMV, as always.
posted by ignignokt at 3:26 PM on June 16, 2011

Split the difference? I'm not a contractor and have no expertise in this area, so of course I want to answer this question... Tell BigContractorCorp you're working with PreferredContractorCorp, see if they can find a way to make it work. Maybe PreferredContractorCorp shares the fees, or pays a finder's fee. Either way, everybody wins. You get work faster; they get fees.
posted by theora55 at 3:33 PM on June 16, 2011 [1 favorite]

Don't do this. Maybe I'm misunderstanding, but I'm not sure what makes you think the small company would even get the contract in the first place. What makes you think they'd want to snipe the contract on your behalf? That seems like a huge risk for THEM in addition to you.

If I found out you did this, I wouldn't hire you, recommend you, or deal with you again. Ever.
posted by mynameisluka at 3:36 PM on June 16, 2011 [4 favorites]

One thing to keep in mind, too, is that many client companies may have no interest in working for your small consultancy. In my previous job, there was a total of 6 consulting firms we did business with. If you wanted to hire a contractor, it had to come from one of those 6 firms. If you wanted to hire someone specific as a contractor, they had to be sent to one of those 6 firms and brought in through that channel in order to be hired. So even if the client wants you, that doesn't mean they want your consultancy.
posted by jacquilynne at 3:42 PM on June 16, 2011 [1 favorite]

I am a contractor, this is horrifically unethical and you should not do it.
posted by sweetkid at 3:42 PM on June 16, 2011

I wouldn't assume that SmallCo could get the contract that BigCo is approaching you about.

I also wouldn't try to shop the contract to them. Typically, the situation that recruiters try to guard against is you contacting the end-client directly and cutting out the middleman. This is a little different, but ethically it's the same. They found the business, they brought it to you.

Now, if your field is specialized enough, you might in the future be able bypass these recruiters entirely, unless the end-clients won't deal with you (because you're not incorporated or that sort of thing).
posted by adamrice at 3:43 PM on June 16, 2011

Got it. If small consultancy can't find the contract, and big consultancy isn't paying enough, the contract is dead to me.
posted by Tehhund at 3:49 PM on June 16, 2011

Spot on. Do anything else, and you'll end up with a bad name.
posted by MattWPBS at 3:54 PM on June 16, 2011

Offer the recruiter a C2C contract with your boutique firm.

This has the advantage that boutique firm gets to know the end client, and later deals can be made directly.
posted by orthogonality at 4:17 PM on June 16, 2011 [1 favorite]

I kinda got in trouble for something akin to this, I was hiring a contractor for a project. He worked for a large consulting firm, which had a contract with my company. During the interview he said he wanted to switch consulting firms. When I tole HR about the hire, I gave them the name of the new firm, had him deal with HR to get the paperwork through and everything went smoothly.

A few months later, we were sued by his old consulting firm, I got a call from HR saying, what the hell are you doing, they thought I was pulling some sort of fast one, switching contractors to a firm I had a relationship with. I told them "The guy said he was switching firms, what do I know about contracts"

Everything worked out ok, but it didn't look good.
posted by Ad hominem at 4:35 PM on June 16, 2011

I work for a small consultancy company, and candidates who do what you're describing end up with a big red 'DO NOT USE' flag on their file, with an accompanying paragraph of text explaining exactly what happened.
posted by hot soup girl at 6:26 PM on June 16, 2011 [1 favorite]

That "lower overhead" that small consultancy firm has, is in part because their recruiters aren't as good -- don't have the connections or the sales skills or the established book of business - as the ones who got the client that you want to work for. Nothing is free in this world.
posted by fingersandtoes at 7:24 PM on June 16, 2011 [1 favorite]