Hiring Subcontractors as a Small Agency: The Agreement You Need

When a small agency (or a freelancer who has grown past one person) brings in a subcontractor, it sits between two agreements: the one with the client, and the one with the subcontractor. If those two don't line up, the gap is your problem. The client expects you to hand over full rights; the subcontractor never agreed to transfer them. The client pays in 60 days; the subcontractor expects payment in 14.

A subcontractor agreement exists to close those gaps.

Whatever you promised the client about the subcontractor's part of the work should be passed down:

• Deadlines, with some buffer for your own review.
• Quality standards and acceptance criteria.
• Confidentiality: at least as strict as your client contract. Use a confidentiality clause.
• Data protection if they will handle personal data. See the data protection clause.

Check your client contract first: some prohibit subcontracting without consent. The subcontracting clause shows how to reserve the right to use subcontractors.

You can't transfer to the client what you never received. The subcontractor agreement should assign rights in the deliverables to you (so you can assign them onward), on payment, with the subcontractor's pre-existing tools kept as their own. See the IP transfer clause and background IP clause.

A non-solicitation clause stops the subcontractor from pitching your client directly for a reasonable period. Keep it narrow: your clients they worked on, for 12 months, is fairer (and more likely to be respected) than a broad ban on working in your industry. Also decide whether the subcontractor can talk to the client directly or only through you, and whether they appear as part of your team.

Two common approaches:

• Pay on your schedule: fixed terms (e.g. 14 days from their invoice), regardless of when the client pays you. Fairer to the subcontractor and good for your reputation.
• Pay when paid: you pay after the client pays you. It protects your cash flow but shifts risk to the subcontractor, and in some places such clauses may be restricted, so check locally before relying on one.

Whichever you pick, state it clearly, along with who covers expenses. Confirm the relationship is independent with an independent contractor clause.

A two-person studio wins a website project for a client and hires a freelance developer for the build. Before signing the subcontractor, they check both agreements side by side:

• Deadline: the client expects the site live on 30 June, so the developer's build is due on 20 June, leaving 10 days for the studio's review.
• Rights: the client owns the deliverables on final payment, so the developer assigns rights to the studio on payment.
• Confidentiality: the client contract runs for 3 years after the project; the subcontractor's obligation is the same or longer.
• Payment: the client pays 30 days from invoice; the studio pays the developer 14 days from invoice and plans its cash flow for the gap.
• Liability: the studio's liability to the client is capped at the project fee; the developer's is capped at their own fee.

Anything that doesn't line up gets fixed before the developer starts, not after the client raises it.

Rights:
"Upon payment of each invoice, Subcontractor assigns to Agency all rights in the deliverables covered by that invoice, so that Agency may transfer them to its client. Subcontractor retains its pre-existing materials and grants Agency and its client a license to use them as part of the deliverables."

Non-solicitation:
"For 12 months after the end of this Agreement, Subcontractor will not directly solicit, for similar services, any Agency client for whom Subcontractor performed work under this Agreement."

• Sending the subcontractor your client contract and assuming it binds them. It doesn't; they need their own agreement with you.
• Treating a subcontractor like an employee: fixed hours, your equipment, no other clients. That can blur the independent relationship.
• Promising the client a deadline you haven't confirmed with the person doing the work.
• Handing over client credentials without the confidentiality and data terms in place first.

The subcontractor agreement template is written for this middle position. For the client side, the marketing agency agreement includes a subcontracting right. Draft it now with Clinch: describe the job in a sentence, get a clean draft, send one link. Your client signs from their phone without an account, and the deposit is paid in the same step.