When Levi Strauss launched its Slates brand clothing line last August, Ketchum San Francisco gained a plateful of new business. But the agency didn't exactly win the account from soup to nuts. Slates is also bankrolling a lone PR consultant with roots in the entertainment business to handle music industry PR.
No doubt, a PR free agent with a killer Rolodex is a contender in today's knowledge economy. "Freelancers are definitely giving agencies a run for their money," says Rick Gould, CEO of the New York-based accounting firm Gould Eisele Crombie. "And I'm not afraid to say it: they lowball. You might get a senior level account person working out of their apartment with zero overhead and zero payroll, and they can charge one third of what the larger agencies are charging," he says. "A [big agency] senior VP making $115,000 per year gets billed out at $250 per hour. If the same SVP leaves the agency, and [goes solo], he can charge $100 per hour and...still make more money than when he was with the agency."
Of course, the entrepreneurial game isn't all sour grapes for PR firms. Most big agencies are benefiting equally from the rise in freelance operators. Business is booming across the board, and bringing in specialized consultant partners has become a fairly standard practice that most clients accept. Cohn & Wolfe Washington, for example, maintains ties with several former full-time staffers - mostly writers - for projects on an "on call" basis. "When Lee Khan moved to Vermont with her family, she remained very much a part of Cohn & Wolfe" says Sue Kennedy, SVP, director of consumer and marketing public relations. "She's our Cohn & Wolfe Vermont office."
The solo craze hit the PR industry by force in the early '90s when many mid-level and senior counselors, victimized by bear market layoffs, reinvented themselves as independent consultants. Today the trend rages on, fueled by the comfort of alternative (read: investment) income sources, the desire for flexible hours, and the work-from-anywhere convenience of wireless technology. International Data Corp. estimates that the number of sole proprietors in the U.S. will swell from the current 41.3 million to 51.6 million by the year 2002. PR now ranks among the top ten specialties of home-based businesses.
Not sure whether to outsource to an agency or an independent contractor? Caveat emptor:
Agencies think big. Independent contractors are good bets for clients who have targeted, finite needs (e.g., a strategic plan, annual report, communications audit or brochure). If it's a one-shot project, you probably don't need a huge team on the job, says Paige McMahon, an independent PR consultant in Bethesda, Md. "Agencies will come in and say, well, you also need video and this and that," she says. "Sometimes people don't realize how simple their needs can be, and they get frightened into hiring a bigger firm."
Independents aren't superheroes. If you have a major media event or crisis and you need bodies on a project, "or if you're a multinational corporation and you need a global media campaign, go to a top ten agency, pay the retainer and get on with it," McMahon says. Don't expect one person to do the work of 10.
Size matters. If your account isn't the most lucrative, or if your project needs are sporadic, you won't be a high-priority client at a large agency (no matter what they tell you). Start-up businesses are usually better off partnering with smaller PR firms or free agents to get the most personalized attention.
Freelancers are alone in the world. "If a freelancer gets sick or disabled, or burns out from working too many hours, the client will often get the short end of it," Gould warns. When entering into a contract with a free agent, ask what safeguards are in place to prevent unforeseen glitches.
Freelancers aren't alone in the world. Most seasoned consultants know their limits and are happy to make referrals if the account in question is too large, or if it falls outside of their niche. Some freelancers have even been known to help their clients find the right agency match.
Pricing isn't automatically apples to apples. To determine the going rate for your project, contact several candidates in the same ballpark (i.e., five agencies, or five contractors) and collect bids from each. "But make sure each one is bidding on exactly the same thing," McMahon says. "You may ask an agency to bid on a speechwriting project, but they'll come back with an itemized list with prices for other related services." It's generally a good idea to toss out the highest and lowest bids and go with one in the middle, she advises. If you go with the cheapest, you'll probably get what you pay for.
(Gould, 212/239-0804, Kennedy, 202/530-0510, McMahon, 301/320-0853)
Billing Benchmark
Most freelance PR consultants charge anywhere from $75 to $250 per hour, depending on geographic location, specialization and experience. Hourly rates are most common, followed by retainer agreements and flat fees.
Niche-Savvy
Healthcare and high-tech are hot vertical market specialties among freelancers. But if a free agent espouses expertise in environmental PR, be wary. "Some specialties don't hold up with independents," says Paige McMahon. Green-speak is one. "If you're wrestling with EPA regulations and potential environmental crises, you probably want [the security that a bigger firm affords]," she says.