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It's not the cost of the contracts themselves that are so expensive it's the overhead of profit taking by the recipients of each contract. When you hire a cont
by daveguy 10y ago
It's not the cost of the contracts themselves that are so expensive it's the overhead of profit taking by the recipients of each contract. When you hire a contractor you avoid taking on capital expense and internal complexity overhead, but you are generally going to pay 15% or more above what it would cost you to do it in house. You accept this tradeoff with the understanding that people you contract with have to make some profit too. When you are small the complexity overhead can easily draw you off course. Month to month and on demand contracts can be paused rather easily to adjust to cash flows.
It's not the cost of drawing up the contract that adds a significant part of the cost. The contract work itself that adds overhead.
- fiatjaf 10y ago> You accept this tradeoff with the understanding that people you contract with have to make some profit too. Of course not. You accept the tradeoff because it is in your interest to abstract away risks. Part of the costs involved in this risk taking comes from how the contracts are set up. For example, your employee doesn't have an actual contractual obligation to fulfill such and such goals every month, while an external contracted firm may have.
- daveguy 10y agoOk. It is still not the contract that is the major cost. I didn't say the tradeoff is that other people make profit. The tradeoff is the overhead cost. Sure, that can be another tradeoff -- obliged fulfillment. Either way you're paying the contractee a little more for that. It's not the contract itself (the legal expense) that is the major cost in a contract. Yes it is some overhead, but is it really a significant part compared to the excess you are paying to have it contracted vs in house? The point is. It's still going to cost you more, even if the legal cost is zero.