A consulting engagement transaction can be thought of as a series of macro processes, i.e., a chain of value. With increasing frequency these macro processes are being executed by different individuals, companies or groups working as Prime Contractors4 and Subcontractors5 to one another. To facilitate deal-making between the free agents and groups in this value chain, there needs to be a basis for negotiating compensation between Prime Contractors and Subcontractors for each of the macro processes. A description of the macro processes or links is offered below. This description lays out a simple flow of the macro processes that, in sequence, make up a well-formed consulting engagement value chain. We have assigned each link a percentage of the total engagement value around which Prime and Subcontractors can negotiate. The percentages are suggested below can be thought of as the mid-points in the ranges for the value of each of the macro processes. They were derived from interviews with numerous consultants.
To facilitate all the intangible dynamics between Prime and Subcontractors we also offer “a few simple rules” which can be used as a Code of Conduct. Lastly, the framework includes a set of agreement templates for subcontracting to one another, sharing intellectual property, and work-orders for specific projects.
Taken as a system, our hypothesis is that these components form a structure and process that will support professional services free agents (perhaps a community of practice) to collaborate resulting in a sustainable commercial Free Agent Ecosystem.