Model IV is very similar to Model III except there are 4 different contract points under this Model as a minimum. It means that the consultant is further insulated from the client in terms of business. The additional level in the connections between the consultant and the client generally reduces the net proceeds that are ultimately paid to the consultant.
This model can manifest itself in many different ways depending upon the specific situation. One possible arrangement is for a consulting company to have a contract to deliver prescribed services to a client. When the consulting company does not have the internal resources to satisfy their needs, the company may reach out to the placement companies that operate in the industry. The placement company recruits and screens potential candidates for a temporary work assignment with the consulting company.
There are at least three contracts that exist in Model IV; between the consultant and the placement company, between the placement company and the consulting company and finally between the consulting company and the client.
The number of layers in Model IV erode the compensation potential for the consultant.