Food for thought: what if agencies were more transparent?
A short post, because I’d really like to hear from you. What would our industry look like if agencies were more transparent about what services they provide and what percentage of the total project fee they earn? For example:
In other types of “agent” relationships (authors, athletes, etc.), the client knows exactly what the agent will do, and what percentage of the total billings they will take in exchange. If you find a salaried job through a recruiter, they get a percentage of your first year’s salary, and you know what that percentage is.
This idea came to me for a few reasons. Good agencies have trouble finding good translators, even if they are willing to pay/interested in paying/desperate to pay real money for their services. Partially, this is because some good translators have had it with agencies and will only work with direct clients. A more transparent model could solve some of that problem. In addition, a more transparent model would make it clear that the agency is adding value (or not), and translators could choose to jump on that value (or not).
For example, I understand it when translators rail about “agencies that add no value,” and simply forward e-mails back and forth from the end client to the translator. I get it, and I also avoid working for those types of agencies. But I also think that agencies add a value that they don’t always trumpet: finding the client in the first place. As anyone who works with direct clients will tell you, finding them is a lot of work. It takes time and creativity and persistence and research, so the fact that a translator who works with agencies is freed from that step in the process should be worth a lot, and agencies don’t always point that out.
So what about this. The agency tells the translator how much they’re charging the end client. Sometimes translators already know this, because agency staff mistakenly send us e-mails meant for the end client. In any case, my assumption is that my agency clients are charging the end client 2-3 times what they’re paying me, and I’m OK with that. Then, the agency takes a set percentage of that amount, just for having found the client in the first place. Then, the rest of the agency’s fee is based on what they actually do; the translator knows whether the document is being edited by another translator in the same language pair, or proofed by a speaker of the target language, or not reviewed at all, and the agency charges accordingly. It seems like this would also allow translators to gravitate to agencies that provide the level of service that they want or need. For example, I spend a lot of time researching and marketing to direct clients, and I’d rather work with my own editors than with an anonymous editor provided by an agency. So, I’d be interested in working with an agency (or perhaps more accurately, an agent) who would simply find clients for me, forward the work back and forth and take a percentage of my billings.
Further disclaimer: I’m not at all anti-agency. I disagree with translators who call agencies “parasites,” and I really enjoy working with my agency clients because they let me focus on the parts of the job that I enjoy and am good at. But I think that a) agencies need to do a better job of highlighting their strengths (such as finding and retaining clients), and b) there’s room in the market for more of a commission-based “translator’s agent.”
An idea whose time has come, or a non-starter? Over to you!
Written by corinnemckay
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1.
A good agency adds value, crucial value, by finding the customer and then matching the job with the best available translator. For these extremely important tasks, I believe that a good agency deserves a very significant commission.
I think that most translators probably don’t see it like this. They think that value is added by agencies depending on whether and how much they edit their translations.
But a good translation should pass what I call the intelligent dachshund test. When your dachshund sees that a page falls out of your printer, she (my two dachshunds were named Muffin and Molly) will sniff out the ink on the page, determine that it is not food and wisely leave it alone. (I wrote a whole post about the dachshund translation quality test on my blog).
So value is not added by editing, although even very good translations obviously must be carefully proofread to catch typos and omissions. If you need to do more than that, it is not a good translation.
2.
It may depend on the actual field and other factors, but in my field (patents and technical translations) it is not exactly a mystery how much the agency is making on each translation. The profit margin is generally 50%, or twice as much as what’s on the translator’s invoice. That is what I charge when I work as an agency.
This is very similar for example to what happens in real estate. Real estate commission in this country is typically 6%, 3% goes to the agent, and 3% stays with the real estate agency.
I don’t see anything wrong with that. Some real estate agent don’t want to pay the 3% to the agency and start their own thing. If they can do everything by themselves, they get to keep the entire commission. But most prefer to simply work for an agency. And agents who start their own thing usually become an agency using the same 50/50 split.
I wish translators would stop complaining endlessly about how unfair it is that agencies keep all this money when they are the ones who do all the work.
Nobody is forcing translators (or real estate agents) to work for agencies.
Whose fault is it if they can’t figure out how to find direct clients on their own?
I love the last three lines of your comment, PT 🙂 Should be required reading in certain fora…
I’m sure that this is certainly a very significant topic for many of us. Almost all of our work (I work with my life-partner) is for agencies located in the Czech Republic and all of them have been excellent to work with. The only one with which we have ever had problems, which is based on a small island, was once described by another blogger as “The Pig Turd”. No more clues!! Otherwise we seem to be appreciated by everyone else that we work for and conversely we appreciate them equally. Perhaps our only problem is that sometimes we seem to be too popular and that’s why we’re burning the midnight oil right now. I’ve written this while I wait for my partner to deliver the next part of a job that’s due tomorrow that will keep us awake all night :(.
Hi Corinne,
The first thing that comes to mind is that pricing is about profit margins not fairness. PMs are under pressure to maintain or to increase those profit margins, to pay for management, overhead and sometimes even shareholders. The market place is constantly changing with globalization and ever progressing machine translation, cloud computing and crowdsourcing. In this kind of environment I don’t see why it would be in an agency’s interest to provide more transparency. Another reason why I don’t think agencies would act that way is the fact that they are not even willing to say how much they are willing to pay to the translator. It would save me a bunch of time to know what is not worth bidding on.
I think a different model applies when you hire an agent/marketing person to find clients for you. You would pay them a fee for their service, rather than being a translation vendor.
“So, I’d be interested in working with an agency (or perhaps more accurately, an agent) who would simply find clients for me, forward the work back and forth and take a percentage of my billings.” What you are talking about is actually more a marketing agent than a translation agency. In fact a good agency does much more than just finding clients. That’s why I think in most cases good agencies deserve their commission and they are not obliged to inform translators of their margins. I outsource some of my projects and I know how much work is involved after a translator’s delivery, including quality control without which the client would not be fully satisfied with the result.
If we are talking about a highly professional translator who doesn’t need thorough quality management, then yes, you always have a choice not to work for agencies and to cooperate with end clients only. Or you may hire a person who will be responsible for your marketing and looking for new clients.
As I recently tried to find an off-beat hotel for a short stay in a Russian town, I was pretty annoyed to find out that most Google searches lead to more or less dodgy middleman sites. Finding clients might seem difficult for a hotel that doesn’t belong to any major chain or network. Yet it’s just as difficult for a client to find and directly contact a particular “hospitality services provider”. Your observation, Corinne, that “it takes time and creativity and persistence and research“, is valid in both directions.
I believe that many translation buyers land at an agency despairing to get a good (and available) translator or interpreter directly (good freelancers are seldom free, they are too busy for their own good as I once wrote in the first commenter’s blog :), look for “The Biggest Mistake that Freelance Translators Make”).
On the other hand, a typical translation agency’s “transparency problem” has deeper roots. Agencies are reluctant to position themselves as intermediaries or simple traders. Hence the hypocritical use of the term “language service provider” while paradoxically calling translators, that is real providers, “vendors”. Hence all the attempts to liberate themselves from the dependence on translators or at least create the perception of acting not as trading companies or wholesalers, aggregators of demand, but as producers or at least aggregators of translations themselves, better yet managers of complex linguistic and heuristic “processes”.
Like portals that take care of the marketing for hotels, these service agencies try to ring-fence their customers from their “vendors”. Those notorious “confidentiality agreements” that agencies try to impose on translators (look for “How the So-Called Translation Industry Turned “Confidentiality Agreements” into Declarations of Acceptance of Servitude” on Steve’s blog) are only a sign of their growing fear of disintermediation (driven by clients).
It is not in the interest of translation agencies to create more transparency, but it is definitely in the interest of translators to become more visible. It is also in the interest of the clients. Like good agencies, many good clients also “have trouble finding good translators, even if they are willing to pay/interested in paying/desperate to pay real money for their services“.
Lots of companies don’t want to do what you are suggesting, sorry to say. Translators are already visible, aren’t they? Then why doesn’t every company build up a database of translators, hire a few translation project managers, make an investment in some technology, and start doing that then? Why don’t all of them stay up late at night to try and get the work done tomorrow instead of the day after tomorrow? Because they don’t want to do that, bro.
Really sorry that you’re bitter about it, but even more sorry that you have no idea how much work it is to run an agency, or how much appreciation customers have for our work.
Andrew, I just checked the database of translators that I – as an agency myself (even though I prefer to call myself an outsourcing translator) – regularly work together with: 48. I think that number qualifies me to a certain extent to have an “idea of how much work it takes to run an agency” (let alone know the appreciation that customers have for our work)?
Apart from that, I totally agree with Steve on most points. If translators can’t figure out how to find direct clients on their own, I can’t blame “predatory agencies” to turn a translator’s disadvantage into their own “marketing competence”. (And, after contacting a few translators only to learn that they are currently unavailable due to their other obligations, a client will certainly have “much appreciation” for an agency that will spare her the headache of directly contacting more good, but unfortunately currently unavailable translators).
“Translators are already visible, aren’t they?“. No. “Most translators have no direct clients because they are invisible“ (Steve). Absolutely.
Still, the only real grievance that I have – mostly with other, highly visible or even high-profile translators who I prefer to work together with – is that they don’t or only seldom outsource. Turning down job offers from prospective or existing clients instead of outsourcing these jobs to trusted colleagues in their network pushes the clients to generic agencies. I am not sure whether these translators, like Steve put it, “are too stupid and too lazy”. Translators who are in high demand don’t have much time to complain, but unfortunately, they aren’t much of help either to other, less visible colleagues, nor – more importantly – to their clients who would prefer to work directly with dedicated service providers instead of middlemen.
Valerij, I think the first comment of your reply was direct at Robert, not at me (Andrew). Far be it from me to cast aspersions on your experience… 🙂
Sorry, I mean Robert (Rogge), not Andrew in my comment above or below
Hi Valerij,
Well, I disagree that translators are invisible, mostly because of public databases of translators and, nowadays, social media. Companies are not reaching out to these translators because they don’t want to, not because they are invisible. I mean, this is the age of finding what you’re looking for in no time, translators included.
The confidentiality agreement thing… you’re constructing a narrative where it’s like all the companies out there are trying to break out of this agency relationship. Lots of companies do, yeah, but why aren’t the others doing it too? Now would be the time to do that, no?
Last, about how much work it is to run an agency, if you admit that it’s alot of work to run an agency, then why do you imply that an agency is a “trader” and the term LSP “hypocritical”? Obviously it’s not merely trading – if it were, then we’d have an automatic word exchange like the NASDAQ.
As a reply to “Robert Rogge: Hi Valerij,
Well, I disagree that translators are invisible…”
Well, Robert, translators are invisible to potential customers because most of them fail to get their websites on the first page of Google search results (or simply don’t have professional and SEO optimized websites).
The second reason is – no matter how much applause or great feedback Chris Durban et al. get – most translators are still too shy to sign their work, .i.e. take credit (and responsibility) for their translations while also heightening their own visibility. (If you are not familiar with this subject, please google e.g. “To sign or not to sign? Chris Durban strikes again“.)
As for agencies as “traders”, I certainly don’t mean “trading” in terms of trading on NASDAQ. Since most agencies order and buy translations from translators (who they prefer to call “vendors”) to resell them to their customers, a reseller would be a more fitting term (“a reseller is a company or individual (merchant) that purchases goods or services with the intention of reselling them rather than consuming or using them“ according to Wikipedia).
Other things which contribute to the mark-up include the marketing in the first place: logo, website, translation of website texts etc. It all mounts up. (Incidentally, of the 20 translators who work with me, not a single one has a website, to my knowledge).
Then there’s the communication with the client, the occasional trip to meet them (travel, time away from work, hotels in some cases), the half an hour spent on the phone to discuss needs for each major job, the wait for payment (I pay my translators far faster than I get paid), the occasional Christmas gifts.
I do all the proofreading myself, so that contributes to the margin as well.
I could go on. It’s about so much more than just matching clients and translators…
Agree — customer acquisition and retention has a cost — not to be underestimated!
I honestly don’t think there is any relationship between the two (the agency-end client relationship and agency-translator relationship). As the translator it is up to you to decide what your added value is to your client, the agency, what the scope of your work for the agency covers, etc. and *charge accordingly*. This can range from delivering “bulk” text and never hearing any more about it to meeting with an agency PM and the end client in person, attending project briefs in person or on the phone/Skype, completing several draft rounds with an editor/proofreader or someone from the end client, and proofing page layouts before production. Of course, when agencies sell work at a certain price point before bothering to find out exactly what that work will cost them, Houston, we have a problem. And unfortunately most agencies don’t build that kind of communication into their “vendor management” policies. Which is why I prefer to work for direct clients. I’ve worked for a couple of agencies at very high per-word rates, but the project management was the same shitty, bulk-market, one-size-fits-all stuff you see across the board, so I very rapidly stopped working for them. (And, by the way, if they were selling at two or three or X times what they paid me, more power to them!!). If you are happy with that kind of “vendor” relationship and able to negotiate what feels like a fair rate for the service you are providing, I don’t see how knowing the agency’s margins changes anything. Instead of “transparency” maybe it is a question of agencies just communicating better sooner in the project management process so that their “vendors” don’t feel like interchangeable commodities…the real reason behind a lot of translator griping, IMHO.
Wow, it’s really a bummer to see such a popular blogger chasing down such a negative and unimpressive path. Can’t add too much to the other comments.
If you’re wondering, the average agency takes 37% margin according to the latest surveys. There are 25,000 agencies in the world, most of them small to medium sized businesses.
Agencies are not your agent. It’s a misnomer, which is why LSP is such a common name nowadays. They don’t work for you. They work for the customer, and everything that goes into that business, especially getting the job done, providing technological support/memories, coordination, sales, and especially deadlines, is how they add value. Is a call center merely an agent for the employees? Is a software development house merely an agent for the programmers?
Lots of companies would never work with a translator directly even if they could. What happens then when you are busy or on holiday? These people have other jobs to do, and agencies = peace of mind. And that’s because it’s alot of freakin’ work, with very little peace of mind.
1. “Then there’s the communication with the client, the occasional trip to meet them (travel, time away from work, hotels in some cases), the half an hour spent on the phone to discuss needs for each major job, the wait for payment (I pay my translators far faster than I get paid), the occasional Christmas gifts.”
Other than the fact that I have to pay the translators almost always before I get paid, I don’t have to visit anybody, don’t do any holding of client’s hand, I ignore them on Christmas, etc.
I resent it when for instance my car insurance company sends me a card on Christmas and on my birthday. Who the hell do they think they are …. my dear friends? In fact after I switched to Geico, I am reassured that they don’t do that.
I guess it depends on who your clients are. I doubt that the patent law firms that I work for would want me to visit their offices, except if they hire me for triage, etc.
No need to waste their time on phone either since I know what it is that they want from us. After all, their time is valuable (at $495 an hour).
2. (Incidentally, of the 20 translators who work with me, not a single one has a website, to my knowledge).
This is the crux of the problem as I see it. Most translators have no direct clients because they are invisible. To put it bluntly, because they are too stupid and too lazy.
So instead of doing the kind of work that they need to do to wean themselves off predatory agencies, the geniuses complain about them on LinkedIn.
(Although I have to say that I do enjoy reading every now and then the Naming and Shaming rants about those 0.00001 cent rates. Those sad stories break my heart!)
@patenttranslator: My clients are often small family concerns, communications agencies, tourist companies… so perhaps a few notches away from your sharp-suited, time-watching, expensively-coiffed law firms. And it’s often only one visit at the start of the relationship… but important nevertheless.
“… so perhaps a few notches away from your sharp-suited, time-watching, expensively-coiffed law firms”
The last client that I talked to in person when I was triaging and sight-translating Japanese and German patents in a patent law office in Palo Alto, about 15 years ago, was dressed in jeans and a t-shirt. I vividly remember her noisy flip-flops.
She was about 30 and when she took me in her BMW convertible for lunch at Olive Garden, she complained bitterly about how unfair it was for her and her boyfriend that they could not find a house in the area that they could afford (she was making 250 K and a decent house near her office would cost at least 1.5 mil.)
It’s not about how you’re dressed and coiffed, but mostly about what’s in your head.
Amen to that last sentence, though I’m not sure what your example proves about clients in general. Sounds like a scene from Six Feet Under.
“Sounds like a scene from Six Feet Under.”
It does? I don’t get the connection.
I mean Mitzi, from Kroener & Kroener
Ha, the good old discussion that quickly turns into the “Us-versus-Them” type of conversation, and instead of promoting constructive dialog it just further deepen the gap.
For all the agencies owners that have commented so far. Have you considered the fact that maybe you are not the type of agency that translators complain about? Maybe you are the type of professional practice that translators enjoy working with and respect (although from some of the comments here I wonder if this is a mutual respect, but it doesn’t mean that aren’t others who are not.
Valerij is quite right by saying that some agencies serve as no more than brokers, yet they work very hard not on finding client and nurturing relationships with clients and translators that are built on respect and trust, but on convincing clients that they are the service provider and the client depends on them, while at the same time attempt convince translators that without agencies they will be lost. Translators have their fair share of responsibility in this situation as well, but playing the blame game won’t help anyone.
It is also worth noting that most translators, even experienced ones, are dealing almost weekly with the broker type of agencies, and while experienced translators usually ignore or fend them off, less experienced translators tend to fall into their trap and develop the skewed perspective those brokers are promoting.
The translation market is so segmented and fragmented that is almost impossible to describe a market-wide trend or situation.
Agencies do not always go to find the end clients. Many broker type of agencies in the market just serve a bigger agency up the food chain, and those are harmful. The only value that they might offer is to the the bigger agencies (by taking some administrative work off their hands), but the cut they take and the time strain they add to a project ultimately come on the expense of the translators and end-clients. As I always say to clients, it is what you pay for the project that matters, it is how much the agency is paying for.
One negative result of this ineffective structure is that in the long term it leads to end-client loosing trust in the “translation service providers” (they do lump everyone together, as could be expected from an outsider to the market).
So there are unscrupulous brokers and there are professional practices. There are good translators and orders of magnitudes more bad translators.
Professionals (“agencies” and translators) should get together to promote the premium market segment, and work to create win-win-win situations, instead of bicker all the time in online fora.
Thank you for a very interesting post. I like the idea of an agent, not an agency, for interpreters and translators. An agency is a business that provides a particular service (Webster) They do not have the linguist’s best interest in mind. On the other hand, an agent is a linguist’s representative: an attorney in fact. To have an agent you need to sign a power of attorney to create the legal representation. You don’t need this legally binding contract with the agency because they do not act on your behalf. All you sign with agencies are service contracts not very different from the ones you sign with those who provide a service to you or your business. Yes to the agent. No to the agency. There is a huge difference.
“I like the idea of an agent, not an agency, for interpreters and translators. An agency is a business that provides a particular service (Webster) They do not have the linguist’s best interest in mind”
There must be many informal relationships like this already in the immense and immensely fragmented translation market between translators and their agents. I have used such informal relationships from time to time.
All you have to do is offer an intermediary a commission ranging, say, from 5 to 15 percent.
For example, there is a translator in France who recommended me as a Japanese patent translator to a patent law firm in England – he was translating French patents for them and they needed Japanese. I did quite a bit of work for this law firm over a period of about 2 years, and I paid him a small commission for each job I did for this law firm. Initially, the patent jobs came from him, but even when they came later directly from the law firm, I still sent him his cut because without his initial input, there would be no work for me from this source.
It is up to translators to seek out and cultivate these kinds of opportunities. You can even stipulate the conditions, such as “I will pay you 5% for every job for the first year”. This is what other people working in other professions do, translation agencies do it too, but for some reason, most translators (in their blissful innocence?) don’t even think in these terms.
Great post as always. I am surprised that there is a notion that agencies mostly add value by having the work edited and similar tasks. I still work for agencies (about 70% of my time, rest is direct clients) and the main reason is that I am sent work without having to research, market and educate the client. I can focus on my passion, translation. I highly value agencies for that. But of course there are differences in types of agencies. The trick is to find the ones that do provide high value, work with you for respectable rates and consider you more as a partner than a tool. I do like the notion of an “agent”.
Agencies incur the cost of customer acquisition (marketing, promotion, etc.) and that cost is a big component in the price for translation services. Agencies also insulate translators from the occasional “lunatic” client. Translators for our agency never hear about some of the accommodations we make to clients pre and post-delivery. One last point, at our agency the translators gets paid, even if our company doesn’t. We consider it the right thing to do so translators can focus on what they do well and don’t have to worry about financial risk. We do the worrying.
The problem is still the same : agencies compete with each other and use for primary argument lower prices than their competitors, which ends in proposing lower and lower prices to translators. Your model would be great if those agencies were able to ask for decent prices to their clients!
Thanks everyone for your comments; very interesting discussion! Just for clarification: I do work with agencies (mostly boutique/studio ones), I love my agency clients and I think that their cut (which I always assume is at least 50%) is fair for what they do. Just the fact that they land and retain bigger clients than a one-person shop can handle is a huge benefit. And as Ron commented (thanks!), agencies take a lot of worry off a freelancer’s plate. I do not think, as I recently heard another freelancer comment, that agencies are “parasites.”
But I also think that agencies *themselves* could a better job of selling the advantage of what they do. For example I’ve never seen an agency market *itself* to freelancers by saying “we find you clients, then let you focus on the aspects of the job that you love and are good at” (as Tess pointed out). Additionally, I’m just putting it out there that I would be interested in working with a “translator’s agent” if such an enterprise existed: someone who would function only as a client-finder and go-between in exchange for a cut of my billings.
Great discussion, thank you to everyone who commented!
Corinne, thanks for your post. As always, the discussion was very informative too!
I wanted to respond to your remark “But I also think that agencies *themselves* could a better job of selling the advantage of what they do. For example I’ve never seen an agency market *itself* to freelancers by saying “we find you clients, then let you focus on the aspects of the job that you love and are good at”
We try to communicate that message to freelancers on our website —
http://www.mtmlinguasoft.com/why-choose-us-freelancers/
http://www.mtmlinguasoft.com/faqs-about-our-policies-and-procedures/
I hope the message comes through! We are always open to comments and questions.