As part of our broader research looking at freelance and contingent work, I interviewed Gene Zaino, CEO of MBO Partners, last week. MBO Partners offers a service providing a legal and financial infrastructure for independent consultants and freelancers.
Although not well known, MBO has assembled a large client base - they say they have over 15,000 independent consultants and freelancers using their service.
Their infrastructure service includes (from their website): "group health benefits, retirement programs, a business and medical expense reimbursement program, billing and invoicing, and more."
They provide these services, in part, by becoming the "portable employer of record" for their indenpendent consultant clients. This means, legally, the consultants and freelancers work for MBO Partners.
But this employment relationship is for administrative, legal and back office purposes only. The independent consultants continue to run their own businesses as they see fit, and are fully responsible for almost all client-facing activities.
Their service solves a number of business problems for the independent consultant:
1. Since MBO Partners is the legal employer of the independent consultant, there is no compliance risk for clients. With worker classification becoming an increasingly problematic issue for large corporations, this is a real benefit for independent consultants and companies they serve.
2. They handle contracts, billing and collections. This cuts down on the administrative time and effort required by the consultant. MBO also has existing master agreements with several thousand client organizations. These existing contracts can be used by all MBO consultants, making contracting easier.
3. MBO Partners offers group health and other benefits. And while the consultant has to pay extra for these, because they are group programs they will likely be cheaper than other options.
MBO Partners charges a flat rate of 5% of billings for their services. The agreements are short-term and the independent consultant can opt out of their relationship with MBO at any time.
I talked to an independent consultant who uses MBO Partners at last week's Freelance Camp. He said they saved him a lot of administrative time and effort. He also said his accountant estimated he broke even on their service before accounting for health care costs. The estimated health care savings were $500 per month. He was very pleased with MBO.
MBO Partners is targeted at high value knowledge workers who want to remain independent, but are also looking for administrative support and access to benefits. If you fit in this category, MBO is well worth taking a look at.
Who pays the 5% - the independant contractor or client who is requiring the contractor to register or not get work from them anymore? It sound too good to be true, contractor are smart enough to make own their business dicisions we don't need any one taking the piece of our pie and regulating our retirement funds or home office deductions. We are honest, reliable, intelligent people who have been with existing clients for many years....Doing well thank you.
Posted by: Ronda Goshe | March 04, 2011 at 09:45 AM
This sounds good.but Thanks/-
Jason Webb
entreper
Thanks/-
Jason Webb
entreper
Posted by: Jason Webb | July 20, 2010 at 08:57 PM