Following a fantastic AWDG event Wednesday night, I had a conversation with panelist Marc Hershovitz (disclosure: Marc is also my attorney) about the difference between a freelancer and an agency. Based on the discussions at the event, he asked if we in the web industry have a skewed idea of the definitions of freelancers and agencies.
Wikipedia defines a freelancer as “a person who is self-employed and is not committed to a particular employer long-term”, and an agency as “a service based business dedicated to creating, planning, and handling advertising (and sometimes other forms of promotion) for its clients.”
This is fine for semantic purposes, but does it hold up in the real world? I’ve always subscribed to the idea that a freelancer is someone who works by themselves, for themselves. And to be clear, there’s certainly no shame in that. You only become an agency when you decide to build an organization around your business. You hire contractors and/or employees to work with you, therefore you have an agency.
Marc’s opinion was that outside of our industry, a Freelancer is seen as someone who exclusively works for agencies and similar organizations – but not directly for clients – while agencies (whether one person or 1000) do work directly for clients. This is an important observation.
Should You Care?
Imagine yourself at a cocktail party speaking to someone who isn’t in the web (or any related) industry. They ask what you do and you tell them you’re a freelance web designer, thinking they will understand what that is and may want to hire you to build a website. But it’s likely they have the same impression Marc does, that you only work for agencies. Instead, you should tell them you’re an independent design agency so they know you’re available for hire.
Or should you?
There’s a bit of ego attached to how you define yourself, your work, and your business. How you define your business to the people you work with could have an impact on the structure of your contracts and relationships. In this case, for conversational purposes it’s probably best to consider the context of your discussion and define your business accordingly.
There are legal and financial considerations, too.
If you’re accepting work on a 1099 basis under your personal social security number (a terrible idea for many reasons which we can discuss another time) you’re more likely to fit squarely into the freelancer category. But for legal and financial purposes, you really should form an LLC and run your business as an agency. You can still tell people you’re a one-person show if you like. Hell, call yourself a freelancer if it makes you feel better. But at least have the good sense to run your business as a real business.
If that’s not your thing, just SUGTW and go get a job.
Edit: The “Freelance to Agency” podcast may also be of interest to you.