I recently received an email from a reader (who prefers to remain anonymous), which read in part:

I’m transitioning from a full-time employee to a consultant just this month. I had a meeting with management where I detailed to them (via a 12 page document with charts, cost comparisons, time studies, etc.) that I could work with them under a retainer and provide 99% of what they really used me for as a full-time employee. I’d actually be saving them tens of thousands of dollars as well.

Today I see my prior position listed on a job search site, and I’m told that there will be a temporary retainer arrangement negotiated with me instead of a long-term one. My fear is that they want to find someone new and use the retainer to bring me in and teach them everything I did as an employee (a 10 year brain dump). That’s not really good for my business, and it seems a bit unethical to me when I’ve offered a long-term commitment already.

Is this normal? What would the best course of action be in order to still keep this client but not consult myself out of a job?

How would you advise this consultant to handle the situation?

To my mind, the job listing raises a little red flag, but isn’t necessarily a deal-breaker. Depending on the company, they might have headcount that they wish to keep. Perhaps they would hire someone to fill that, yet still keep our consultant on — presuming they have a budget for that. Or maybe they’re just evaluating their options.

The bigger red flag here is the way they used the word “temporary” when referring to his retainer agreement. If that isn’t a flashing “EXIT” sign, I don’t know what is. It sounds to me like they aren’t happy with the idea of having a consultant do this job, for whatever reason. They can only conceive of that arrangement as a transition to hiring another employee.

There’s nothing unethical about their behavior, in my book. Announcing a change in your relationship with your employer opens the door for them to make more drastic changes. It would be nice if they were more up-front about it, perhaps.

Of course, there could be a misunderstanding here. Perhaps the client thinks that our consultant is edging his way out of their employ, and they’re just trying to cover their bases. A candid discussion of expectations and desires might help resolve this. In that discussion, it might also be a good idea to underscore the reasons why a consultant would be appropriate for this position.

I replied to the consultant, asking him how they responded to his presentation originally. He replied that they seemed relieved to have his offer of a retainer, because they had probably expected him to quit and he would be difficult to replace. It seems to me that the thought of losing him put them into panic mode. Maybe they just need a little stroking to reassure them that he can be there for them just as much as a consultant as he was as an employee.

That said, it makes sense for our consultant to hedge his bets and develop other business as well. You don’t want to base all or even most of your business on just one client, because they can pull the rug out from under you, too.

Do you perceive any nuances in this situation that I might have missed? Please leave your advice in the comments.