steal one of my company's clients for myself?
March 26, 2010 7:10 AM   Subscribe

My company provides a service to a client that I can do (and have done) all by myself. I am considering trying to cut out the middle man and offering to provide the service myself as a contractor... and quitting my job. Should I do it?

What kinds of things should I be thinking about? Legal ramifications? My reputation? Anybody have experience with this sort of thing?
posted by anonymous to Work & Money (8 answers total)
1a. Having only one client puts you in a crappy negotiating position, and you will have to negotiate rather frequently.

1b. Serving more than one client as a one-man shop can be difficult, depending on the service you provide.

2. Some customers won't want to deal with one-man shops because doing so makes them vulnerable, e.g. what do they do if you get sick?
posted by jon1270 at 7:27 AM on March 26, 2010

A couple of things to think about:

1. Does your contract or conditions of employment where you are now contain any restrictions on working for clients after you leave? In some industries these restrictions are unheard of, in others they're virtually universal.

2. Taking advantage of your existing role to line up business for yourself after you quit is usually considered a conflict of interest. Regardless of whether or not it's legal, or whether or not it's against your contract, are you OK with the ethics of such a move?
posted by FishBike at 7:34 AM on March 26, 2010 [1 favorite]

Also consider the size of your field, and whether your company would let you do this with your OK. If they sign off on it, great. But if I'm in a small field and know that you left your old company and poached a client from it, I would be leery about sending you business / hiring you / etc.
posted by craven_morhead at 7:48 AM on March 26, 2010

Client poaching is typically an actionable offense. Depending on your current employer's perspective on this, you may be sued if you take clients with you. In many industries, business is extremely tight due to the market conditions, and nobody wants to lose a client, so I wouldn't be surprised if your current employer went after you for poaching a client.
posted by FergieBelle at 7:48 AM on March 26, 2010

Are the services you provide to this client something they will have a continuing need for, at enough volume to support you? If not, what are your plans for going to market once your engagement with them ends? For that matter, even if so, you probably need a backup plan in case they take their business to another vendor, their needs change, etc.

If you live in the US, do you have some other way of getting group health insurance than through your employer - through a spouse, e.g.? Hopefully this will only be a problem for the next few years, but for the time being if you have any kind of history of health problems than an individual plan might be quite expensive.

Do you have enough of a cash cushion built up that you can survive if the client is late on paying an invoice? For your current employer, an invoice getting hung up in accounts payable is probably a minor irritation - for you it could mean a month of eating rice and lentils for every meal if you don't have some kind of reserve to fall back on.

Do you know whether your employer's contract or engagement letter with this client has any provisions against them poaching employees?
posted by strangely stunted trees at 8:04 AM on March 26, 2010

If I was the client company you speak of, and the employee of a consulting firm approached me to try and cut a similar deal, not only would I tell that employee (or ex-employee) to get stuffed, I would tell the consulting firm's management about it, and anyone else I knew who might be in the market for similar services. Why? Not only is it a shitty move on the face of it, it also means that the employee is willing to step all over contracts and good-faith principles in order to make a few extra bucks. And I won't do business with people like that. And many other people won't, either.

So, no, I don't suggest you do that. Unless you talk about it with your employer, and the client, and everyone agrees that it's a super-duper idea.
posted by seanmpuckett at 8:12 AM on March 26, 2010

A friend of mine did this. She was an at-will employee, and had no non-compete agreement or anything else. (Bookkeeper.) She'd had two particular clients for years. She knew them better than anybody else at the company, was very friendly with them, and knew above all else that they were really annoyed by how much their bill was. She also knew that she was being billed at... I want to say something like $50/hour when she was only making $12/hour.

Those two clients took up a fair chunk of her time but not nearly full-time. She billed out at a rate much lower than what they'd been paying, and much higher than what she'd been making. Even with self-employment taxes, she was making out pretty well and had more time with her kids.

Unfortunately, the larger of the two, once she was working directly for them, also wanted to get a lot pushier than they'd ever been before about how to treat certain things. I'm a little fuzzy on specifics, obviously, but she found it very upsetting because it bordered on asking her to help them commit fraud. She told them she wasn't willing to do it. They found someone else who was. I think she eventually found other clients to fill in that space, but if she hadn't had income coming in from her husband, she would have been in a bad position.

So that's just one sample of the sort of thing that can happen even if nobody's in contract violation by doing this.
posted by gracedissolved at 8:35 AM on March 26, 2010

Whether or not it is legal, it isn't the right thing to do. And as they say, 'what goes around, comes around.'

The world is a lot smaller than you think.
posted by spilon at 11:29 AM on March 26, 2010

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