Working with independent consultants can be a blessing and a challenge for a company in need of expertise.
On the one hand, they can bring decades of expertise for a fraction of the cost of a consulting firm, but on the other hand there is a lot of fear and misunderstanding around hiring someone who is self-employed.
Two challenges for the corporation include making sure they are getting the right person with the necessary skill and subject matter expertise, and hiring the consultant in a way that avoids any co-employment risk (the risk of misclassifying the worker). For the independent consultant, the difficulties involved in hanging out his own shingle can be many such as being paid as a temporary worker through a third party instead of as a small business, having to market himself, having to carry various types of insurance, and potentially having to hire his own legal counsel for contract review. Even for corporations looking to work with large consulting firms, paying top dollar for expertise may still mean that the company is assigned a relatively green consultant to oversee the case in question.
PrōKo Consulting is providing new solutions to these challenges to create win-win relationships for both the consultants and the corporations in need of their services. Liz Steblay is the company’s founder and managing officer. She’s developed a new way of facilitating consultant-corporate relations by having her company carefully vet consultants who are experts in their field with at least 15 years of experience. PrōKo takes care of all the necessities like reviewing sample work products, talking with references, and doing background checks to make sure that their stable of independent consultants are all that they’re supposed to be. PrōKo’s matching of consultants with clients is based on knowing each consultant’s strengths and personal style as opposed to keyword searches of a database. For the consultants, PrōKo handles all the contracting, rate negotiations, billing, collections, insurance and legal reviews so the consultant can focus on doing outstanding client work, not running their business.
For Steblay, founding PrōKo in 2009 was a matter of noticing the ways in which the consulting industry and professional workforce were changing.
“The seed was planted when I was hired as an independent consultant to do change management for Clorox in 2007,” she recalls. “I was brought in to help roll out a vendor management system and compliance process and the whole time I was on that project I kept thinking two things. First, this is really bad news for self-employed consultants like me, and second, there has got to be a better way for companies to find and hire independent consultants.”
Steblay notes that the process for getting hired as an independent consultant was challenging at best. Ultimately, she had to be paid on a W-2 basis, a process that can be costly for the consultant, requiring him or her to owe a lot more in tax than they would if he or she were paid as a small business on a 1099 basis. This experience helped inspire the unofficial PrōKo motto: “Friends don’t let friends W-2.”
With PrōKo, consultants are able to work as sub-contractors paid on a 1099 basis which saves both the client and the consultant significant money. Furthermore, because of PrōKo’s clear contracting process they are able to fully mitigate the client corporation’s misclassification risk so they don’t have to pay consultants through a staffing firm.
Around the same time as she was recognizing the industry’s payment drawbacks, Steblay was noticing that more and more talented consultants were leaving the large firms, making it harder for companies to gain access to these experts once they went independent.
“Clients have trouble finding independent consultants, and once they find them, how do they know the quality of the consultants’ work?” Steblay says. “PrōKo takes care of these challenges. We are very picky about who we represent.”
Today, PrōKo has an impressive stable of over 65 fully-vetted consultants across the country. The company also has a list of less senior consultants that are being brought up to PrōKo standards before they can be fully represented. The process for bringing new talent into the fold is both personal and rigorous. Steblay says she relies on the power of personal referrals for professional talent – someone she trusts has to be willing to vouch for the candidate. From there, she makes it her business to get to know every applicant by looking at their portfolios, interviewing them and personally speaking with their references.
Most of PrōKo’s clients are in California but it also has a strong footprint in Texas, Chicago and across the Northeast. Currently the company’s biggest client is Nike who is constantly looking for ways to handle their growth more effectively. Other clients include Facebook, Electronic Arts, The Children’s Place, NetApp and Franklin Templeton Investments.
“Clients call PrōKo when they need an expert to help diagnose a problem and create a plan to solve it. Sometimes they call us to figure out how to activate a new strategy or smoothly implement a major change. It makes sense to call us when you need a sniper, not a squadron,” Steblay says. “Our consultants are great at partnering with a client to develop strategies and plans that bring people, process, and technology together.”
For now, Steblay is working on her own growth strategy for PrōKo. She asserts that she’s had no trouble finding talented independent consultants to bring on board. Instead, it’s convincing clients to consider a new way of bringing in a consultant.
“Our biggest challenge is changing the mindset of organizations to understand the PrōKo model and why it works. Sometimes this requires helping them to understand the nuances of employment law which certainly isn’t the most exciting thing,” Steblay explains. “But when I mention that the PrōKo model can save them tens of thousands of dollars in fees, it gets a lot more interesting.”