Some consultants prefer not to be affiliated with any company as an employee. They prefer to work under a contract relationship with all of their contacts in the profession. The proliferation of the internet and all of the avenues it provides for communication between consultants, clients and prospective clients has caused this consulting model to proliferate.
This model operates in a way that is very similar to any temporary placement agency. The primary difference is that consultants tend to be well compensated for their work. In a sense, consultants in Model III serve as ‘high end temps’ There are three distinct parties in the model; the consultant, an intermediate company that operates like a placement agency and the client.
There are typically two contracts in this model. One is between the consultant and the placement company and the other is between the placement company and the client.
The intermediate company sometimes has an ongoing relationship with the client and draws upon that relationship to place additional consultants at the client. They also market the services of consultants and perform back office functions like management of timesheets and expense statements. The intermediate company is responsible for the generation of invoices to the client and for the creation of payments to the consultant.
This model allows the consultant to dedicate less time and effort to back office functions but the consultant must give up a degree of freedom and must accept lower compensation that they might otherwise earn.