Supplying your own people to a client. Conflict of interest? Full disclosure?

Question

I was recruited as a software developer through an agency to an end client. Now having worked with the client for a couple of years they trust me and are always asking if I know fellow developers that might consider joining. I was thinking about capitalizing on the demand for people by setting up my own agency, supplying people and taking a cut of the rate.

I would like to know what the legalities are here, what conflicts of interest might exist and whether if I were to find somebody and have them placed "through me/my company" whether I should disclose that to the end client. Thoughts appreciated.

Answer 1

First, check your agency contract, the non-competition clause(s) likely include language around 'new/future business with the client', in which case setting up a competing agency is probably a conflict.

If your agency agreement does allow it, you would be managing the (legal and business) relationship with the end client for anyone you propose, so they will certainly know you are involved (nothing more to disclose to them).

I will also point out that even if it is allowed, competing with your agency in this way will affect your business relationship with them going forward, so factor that in.