The new old agency model
The freelance economy and its ups and downs
I’m in the stat room* at the second-largest agency in Chicago. I’m a recently hired junior creative. I start talking to the guy next to me. He’s a freelance art director. And he tells me the story about how he created the Apple logo.
During the same time period I am also freelancing, even though I’m full time at this agency. On nights and weekends I’m helping with new business projects for an ex-agency creative director named Carlos Segura, who is starting his own design studio.
Hiring freelance talent (or being a freelancer, even on the side) is nothing new. Agencies and studios, big and small, have been doing it for as long as I’ve been doing this.
When we started a small creative studio in 2009, our pitch was that we “staffed up and down with the right people for the project” and we had a “network of talent that we could draw upon.” (We were by no means the first to tout this model. And definitely not the last.)
We did this, of course, in part because we were only about five people and we needed to appear much larger than we were. We had to have some rationalization that made sense why we were so small. Better to position it as a choice we made vs. the reality of barely having enough work to support the five of us.
However, a big part of this was choice– our desire to work a certain way. For the many years prior to starting this company, I had worked in big ad agencies doing many big tv commercial productions and was inspired (like many of us who worked in agencies) by the production company model.
The Production Company Model
The first time I worked with a top production company in Los Angeles, it was eye-opening. I was surprised by how few people actually “worked” there. An executive producer, a few producers, perhaps a director or two that had stake in the company and some support staff. The company itself was staffed by a very small number of people, but they hired huge crews for every job. Specialists. Could be 30–50 people on a project.
The efficiency was remarkable. These “freelancers” worked every single minute of every working day. There was little or no wasted effort or free-time. They didn’t waste hours shopping on the internet or playing video games, disappear unexpectedly or engage in long exchanges of gossip (all stuff we agency people did). There was no “general” or “overhead” time entered on their timesheets.
These freelancers weren’t entering “general” or “overhead” time on their timesheets.
They did their job, only their job, and they did it well. If they didn’t, they were gone the next day, replaced by someone new. It was brutally efficient.
Like many other agency creatives, I was inspired by this production company model– a very small core staff that supports, and is supported by, freelancers, specialists, on every project.
I had lived through the massive inefficiencies of a big agency, and seen just how much time gets wasted. I had also witnessed the difference one person, one talented hard-working person, can make. That one person, insanely focused on doing, could do the work of five people. And do it better in less time.
It just seemed obvious if you structured yourself in this way success was, really, a sure thing.
It’s not.
The challenges of this model
From a business perspective, what we do is simple. On every project, we make money on the margin between what we get paid and the people we pay to do the project plus the overhead we carry.
Thus the model of carrying a small core staff and only hiring for the project seems obvious. But in its pure form, it poses some serious challenges.
Challenge number one: great freelance talent is very expensive. You have to balance their ability to do better work faster with what you pay them. On a two-month project, it’s quite possible to pay a freelancer more than you would pay a full-time staffer for a year. It’s also easy to end up paying them as much as you make on the fee for the project. I’m going to state the obvious– that is not good business.
Challenge number two: constantly building and refreshing your network of great talent, and managing the hiring of those people, is extremely challenging. It’s time-consuming, and it’s not something you can entirely delegate. Your ability to scout talent is essential to making this model work.
Your ability to scout talent is essential to making this model work.
To really be effective you need someone dedicated to recruitment and talent management, and in turn you have to commit to the additional overhead that comes with that position.
Challenge number three: the best people are usually in high-demand and often not available. You need a deep pool of people that you are consistently staying in touch with (see #2). As you get farther down in this pool, you may not have worked with them and you have no idea just how good they are. Or if they’ll mesh with your team.
For this model to work, you have to be decisive. If the person you hired isn’t working out, you have to move on quickly. I’ve made the mistake more than once of holding onto someone too long.
Challenge number four: ultimately clients hire people, not agencies. Some client partners either don’t care or are unaware that freelance talent plays a key role on their business. But some (really most) do care, and are uncomfortable with it. They want to know, and get to know, who is doing the work.
To make this model work, it’s you (the partners and other core long-term staff) that clients need to hire. You have to build the trust and relationships. You can’t delegate that to someone who is only working with you on a short-term project.
Clients hire people, not agencies. You have to build the trust and relationships. You can’t delegate the perception of your agency brand to someone who is only with you for the short-term.
It’s our job, as those running the business, to provide the support and environment that empowers anyone who walks through our doors to do their best work.
That’s the enduring value a business like ours provides. Great talent will come and go, but what a client is really buying is the consistent support, environment, collaboration and direction that we provide. That context makes all the difference.
It’s like any great professional sports team. The success of any player, no matter their talent, is dependent on the organization around them– management, coaching, the other players, and the environment they practice and play in.
Focus. And build a team.
We are moving away from relying on freelance talent. We’ve built a team that has the talent and core strengths for the kind of work we want to do. Building continuity builds a different kind of efficiency. The more we work together, the more we learn how to work together. We build a real team, which moves faster and does better work.
Building continuity builds a different kind of efficiency. It builds a real team that moves faster and does better work.
No doubt we’ll continue to hire freelance talent. If a project that comes in that we really want to do, and don’t have the resources for it, we’ll need to.
However, we are going to focus on what we do best. Often we’ve hired freelance talent to take on projects that may have been outside of our core strengths. What we’re looking to do more is partner with other agencies or studios with complementary skill-sets. Great things happen when you collaborate in that way.
Is this the new old agency model? A core team that focuses specifically on a skill set, and instead of hiring freelance talent to extend that skill set, we collaborate with other small studios/agencies?
We’ll see. Whatever it is, we’ve come a long way since the days of the stat room.
*For those not old enough to know what a stat room is: a “stat” is essentially a picture. Before we had Macs on our desks, we would get stats to size up or down artwork or typography to build layouts. At the time, all of this design and ad-making stuff was done by hand. There was a guy named Lowell who ran the stat room at my old agency. I can still hear his voice telling me it was going to “be awhile before those are ready.”
About me: I’m a Partner/Creative Director at Teak in San Francisco. I’m from Colorado, moved to Chicago for 8 years then settled down in San Anselmo, California (the birthplace of mountain biking) with my wife to raise two amazing kids. I’m a huge fan of the Chicago Cubs, Denver Broncos and Peet’s Coffee.
