how to prevent subcontractor stealing clients?

[Louise88]

Hello,

My company uses one of our main competitors for certain types of work. They are the only people in the area to do this specific work. They have a reputation not to be trusted when it comes to poaching our clients.
I need advice on what to do. Obviously if my clients choose to go to them without being persuaded, that is down to them. But when a contractor is trusted to do work on behalf of our company, I expect them to just do that.

Is it a case of getting well written subcontractor agreement?

thank you

 

[fisicx]

They have a reputation not to be trusted when it comes to poaching our clients.

And then:

Is it a case of getting well written subcontractor agreement?

Are they going to honour the agreement? How are you going to police the agreement? I'm not sure anything you can do will make any difference - if you do discover they have poached a client what are you going to do about it?

Why can't you get upskilled to do the work yourselves?

 

[Louise88]

Hello,

Its not really as simple as that. If it was, we would had done it by now. Its not a case of sending someone off to a sage course. Its a specialised industry and takes years and years and thousands and thousands of pounds to get there. Once we have the money to invest in it, we will.

thats why i have asked for help, I dont know what I can do.

 

[ethical PR]

If you don't have one in place, definitely use a commercial solicitor to draw up an agreement not just to cover off the client issue, but also payment terms, agreement around scope of work being carried out and what to do in the case of disputes/concerns about quality of of work.

Yes it can be hard to enforce clauses around poaching of clients but it's definitely worth having an agreement in place for this and other suppliers and partners you work with.

 

[Louise88]

If you don't have one in place, definitely use a commercial solicitor to draw up an agreement not just to cover off the client issue, but also payment terms, agreement around scope of work being carried out and what to do in the case of disputes/concerns about quality of of work.

Yes it can be hard to enforce clauses around poaching of clients but it's definitely worth having an agreement in place for this and other suppliers and partners you work with.

That's great. Thank you for your advice

 

[AllUpHere]

Even if you have such an agreement in place you are going to find it difficult to enforce it, especially as your hands are tied due to needing to refer work to them.

Is there no way you can employ someone with the required skills?

 

[DvanBins]

I would agree that you should definitely ask a solicitor to draft an agreement that covers all the points mentioned by ethicalPR. Although it is hard to enforce a non-poaching arrangement, an explicit clause could deter the subcontractor from poaching (if you explicitly draw their attention to it). As willingly breaching a contract might be a bridge too far.

In any case, if you really need them, I think getting a solid agreement is the best you can do in this case!

(not sure if you already have a good solicitor for this type of work, but if not you could consider using a comparison site like ours to receive multiple quotes from specialised solicitors, so you have an idea of the costs before you hire)

 

[The Resolver]

What percentage of your business relies on this company? If significant, then the problem you face is that , if they sign the agreement and still poach, you either put up with it and lose some of this type of business, or make a claim and probably then look at the whole relationship thereby breaking down ,so that future sales are lost anyway. On the other hand, if the percentage is low, then the lost profit from their poaching may likely not justify you spending legal costs on suing them should they breach.

My point is that if it is a significant part of your work then you really need a different business relationship with them ie more like a channel partnership/VAR etc depending on whether you bring them work from a particular market, add value to their service etc.

Ultimately their conduct will depend on how much business they see you as bringing to them such that there is a commercial disincentive to them not destroying the trust.