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Time for Translators to establish LLPs?
Thread poster: sdvplatt
gayd (X)
gayd (X)
too numerous to mention Nov 26, 2018

Jean Lachaud wrote:

Is there a verifiable source for this statement (let not even get into defining "many of"), with hard numbers? Like how many?

David GAY wrote:

Many of those who have set up an agency 10 years ago have become rich.



[Edited at 2018-11-26 21:57 GMT]


HL TRAD (12 years), OT Translation, Technicis (20 years), Tradonline (10 years), Datawords,
Amplexor (1995), Talk Finance …
In fact, if you take the league, there are very few companies older than 20
years.
I guess the oldest have been created less than 30 years ago (Transperfect).
All these companies have grown in the aftermath of the internet revolution (year 2000).
Strangely enough, you don't see the founders of these companies complaining on the fora about the rates
paid to translators

[Modifié le 2018-11-26 22:17 GMT]

[Modifié le 2018-11-26 22:23 GMT]

[Modifié le 2018-11-26 22:39 GMT]

[Modifié le 2018-11-26 22:40 GMT]

[Modifié le 2018-11-26 22:50 GMT]

[Modifié le 2018-11-26 22:54 GMT]

[Modifié le 2018-11-26 22:54 GMT]

[Modifié le 2018-11-26 22:55 GMT]


sdvplatt
 
Dan Lucas
Dan Lucas  Identity Verified
United Kingdom
Local time: 11:16
Member (2014)
Japanese to English
Survivorship bias Nov 27, 2018

David GAY wrote:
HL TRAD (12 years), OT Translation, Technicis (20 years), Tradonline (10 years), Datawords,
Amplexor (1995), Talk Finance …
In fact, if you take the league, there are very few companies older than 20
years.

I agree that, if you want to make big bucks, a successful agency has far more potential than working as a freelancer. The issue is that your original post rather implies that one just had to start a translation company in order to get rich. Until we can work out how many companies failed, we cannot really comment about the likelihood of success or failure. I suspect that thousands or tens of thousands of would-be agencies have failed during that time, and would argue that the ones we see represent a highly atypical group.

The question is, do most freelancers have what it takes? Going by comments here, on mailing lists and other forums, I would say that the typical freelancer is temperamentally unsuited to the rough-and-tumble of corporate life.

Regards,
Dan


Kaspars Melkis
 
sdvplatt
sdvplatt
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disagree Nov 27, 2018

jyuan_us wrote:

The doctors/lawyers/accountants working in a LLP use the same customer service/support staff, and share the front desk and other common office spaces (such as conference rooms). We, as freelancers working at home, don't usually need a support staff nor a front desk. If we follow suit, we may end up with more expenses.

[Edited at 2018-11-26 13:15 GMT]


Disagree. Most translators run off a minimal cost base else how could they afford to charge so little?


 
sdvplatt
sdvplatt
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agre with your last point Nov 27, 2018

Dan Lucas wrote:

David GAY wrote:
HL TRAD (12 years), OT Translation, Technicis (20 years), Tradonline (10 years), Datawords,
Amplexor (1995), Talk Finance …
In fact, if you take the league, there are very few companies older than 20
years.

I agree that, if you want to make big bucks, a successful agency has far more potential than working as a freelancer. The issue is that your original post rather implies that one just had to start a translation company in order to get rich. Until we can work out how many companies failed, we cannot really comment about the likelihood of success or failure. I suspect that thousands or tens of thousands of would-be agencies have failed during that time, and would argue that the ones we see represent a highly atypical group.

The question is, do most freelancers have what it takes? Going by comments here, on mailing lists and other forums, I would say that the typical freelancer is temperamentally unsuited to the rough-and-tumble of corporate life.

Regards,
Dan



Didnt mention getting rich, just about maintaining a sustainable income.
Also did not mention agencies.

I understand your last point. That is why you use tech and a suitable legal form to allow them to concentrate on what they are good at.
Clearly most agencies are generally not acting in their best interests at present.


 
sdvplatt
sdvplatt
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why would you share profit? Nov 27, 2018

Dan Lucas wrote:

SD Platt wrote:

Want to assess the appetite among specialist/niche freelance translators (freelancers or companies) to enter into an LLP style arrangement familiar to accountants and laywers.

It’s time to save the industry!

Benefits
Company structure unlocks B2B
Formalise training, qualification and experience, style expectations
Partners share profits
Pool resources (knowledge, also technical resources such as dictionaries, termbases)
Pool liability
Charge wholesale fees
Redress power imbalance
....
Message below of interested include language pair(s) and niche/specialism.
(not binding)

Who does the admin? Who goes out there and does the selling? Who does the coordination?

What you seem to be describing is an agency, but an agency consisting of people (freelance translators) who prefer translation to the work that an agency must perform in order to succeed. I'd imagine such an entity would be out-competed very quickly by more nimble agencies that actually specialise in the areas just mentioned.

I may be misconstruing what you are saying in your post, but on the face of it I don't see how gathering a bunch of freelancers together in a company helps such people, or that a corporate structure necessarily "unlocks" anything. Freelancers may already set up (at least in the UK) a limited company on their own, or with a few others, if they so wish, but if they're not already successful, I can't see a limited company changing much.

Profit sharing - if you are already a successful translator, why would you share profit with others, especially if they are less successful than you? What do you get out of it that would compensate you for sharing profits?

Liability - same again. Why would I want to take on liability for others, who may be less careful than myself? In the UK at least, I can buy 12 months of professional indemnity for the price of a small job.

Training - I imagine most professionals have associations and CPD plans for that. If you are a beginner, maybe it would help, but beginners don't get to be made partners in most industries.

Resources - I have what I need. Most of what I use is freely available, and dictionaries can be purchased for a trivial amount of money and used for years.

Charge wholesale fees - not entirely sure what this means. Normally the wholesale price of a good or service is lower than the retail price...?

Redress power imbalance - I don't see one in my business. I have something my agency clients want. My clients have something I want, and they take care of the admin bits I don't care to tackle. We work together for mutual benefit.

Accountancy and legal partnerships exist because some jobs are too large for individuals. Two auditors in a tiny office in south London just don't have the reach to service a global company operating in several dozen countries.

In the translation industry, the major agencies already perform an equivalent function, the main difference being that in-house talent (translators) is seldom used, whereas an audit firm has hundreds or thousands of juniors and middle managers on their books. You can go and compete with such agencies if you like - barriers to entry to the agency business could not be lower - but is that really what you want to do?

Regards,
Dan



because you cant possibly make any money translating in pairs you do not know.


>>Redress power imbalance - I don't see one in my business. I have something my agency clients want. My clients have something I want, and they take care of the admin bits I don't care to tackle. We work together for mutual benefit.
So if you dont see it, it doesnt exist? I am thinking the big agencies who used cheap financing to buy up lots of smaller ones and push costs down. I can think of at least 2 who use proz.com regularly. Funnily enough they can never make enough money because of high turnover, ever increasing numbers of support staff and a poor attitude to their freelancers.



>>Charge wholesale fees - not entirely sure what this means. Normally the wholesale price of a good or service is lower than the retail price...?
wholesale is the amount the end client pays


 
sdvplatt
sdvplatt
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disagree Nov 27, 2018

Christine Andersen wrote:

If translators have recognised qualifications and belong to professional organisations (ATA, AITI, ITI, CIoL, whichever applies where you live...), they can hold their heads up and insist on being treated as professionals.

Dan Lucas wrote:

Redress power imbalance - I don't see one in my business. I have something my agency clients want. My clients have something I want, and they take care of the admin bits I don't care to tackle. We work together for mutual benefit.


That is how I work too.


Some of these accreditations are not worth the paper they are written on or at least are not worth the expense of getting them.
My contention is you need industry experience as well as language skills.


 
sdvplatt
sdvplatt
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yes but Nov 27, 2018

Samuel Murray wrote:

Simon Platt wrote:
Want to assess the appetite among specialist/niche freelance translators (freelancers or companies) to enter into an LLP style arrangement familiar to accountants and lawyers.


In which country? I see you're from Germany, but Germany's limited liability partnership (LLP) legislation is different from e.g. the UK's of the USA's legislation. In fact, I don't even think one can speak of "USA" in this regard because the different states all have their own laws regarding LLPs.

If Wikipedia is to be trusted, in Germany an LLP (called an "PartG mbB") requires all partners to contribute capital to the partnership (I'm not sure how), and then their liability is limited to that capital amount only in cases of misconduct (in other cases not involving misconduct, all partners remain fully liable). From my perspective, this would mean that a German limited liability partnership is identical to a normal partnership in all aspects that matter. In addition, German LLPs can only be "engineers, lawyers, patent attorneys, tax consultants and auditors" (Google Translate).

From what I can see, a private limited liability company may be a more suitable option in many countries for groups of translators who want to work together. In some countries (e.g. my own country of residence), this requires almost no start-up capital. The only downside is higher taxes on profits.

Benefits
Company structure unlocks B2B
Formalise training, qualification and experience, style expectations
Partners share profits
Pool resources (knowledge, also technical resources such as dictionaries, termbases)
Pool liability
Charge wholesale fees
Redress power imbalance


Even if translators band together into LLPs or PLLCs, it will unlikely involve more than 10 of them per partnership, which does not improve their collective power by much.

>> Even if translators band together into LLPs or PLLCs, it will unlikely involve more than 10 of them per partnership, which does not improve their collective power by much.
why 10?

I know the UK LLP model and that was what I was referring to.
One does not need to set up a company in ones country of residence. In fact it is often better not to.


 
DZiW (X)
DZiW (X)
Ukraine
English to Russian
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business-wise Nov 27, 2018

Dan, you're right--most even top-notch translators are but poor as businessmen for oft they are just neither educated, nor have hands-on exp in biz. Actually it's a big problem doing business--with clients, colleagues, and agencies--without required and relevant skills, indeed.

However, teaming up mixed specialists with different background and education may help the group meet the competition adequately. For instance, in our group of some 30 translators there were lawyers, a
... See more
Dan, you're right--most even top-notch translators are but poor as businessmen for oft they are just neither educated, nor have hands-on exp in biz. Actually it's a big problem doing business--with clients, colleagues, and agencies--without required and relevant skills, indeed.

However, teaming up mixed specialists with different background and education may help the group meet the competition adequately. For instance, in our group of some 30 translators there were lawyers, accountants, engineers, counsellors, interpreters, real biz owners, and others with useful exp and contacts, so we could easily overcome any issues, covering and supporting each other. Of course, I knew a few of them personally, so they accepted me as a trainee and we had almost ten years of rather intense time and [occasionally] overdrive projects, till our people started leaving for their own reasons and purposes--mostly not connected with translation... Yet 'any project has a start, an end, and a purpose.'

Why, I know many translators and agency owners working both as legal entities and freelancers, diversifying the market share. Thus, providing having good intentions, I see nothing wrong in a 'just course' of translators for their own sake
Collapse


sdvplatt
Gareth Callagy
 
gayd (X)
gayd (X)
survivorship bias Nov 27, 2018

Dan Lucas wrote:

David GAY wrote:
HL TRAD (12 years), OT Translation, Technicis (20 years), Tradonline (10 years), Datawords,
Amplexor (1995), Talk Finance …
In fact, if you take the league, there are very few companies older than 20
years.

I agree that, if you want to make big bucks, a successful agency has far more potential than working as a freelancer. The issue is that your original post rather implies that one just had to start a translation company in order to get rich. Until we can work out how many companies failed, we cannot really comment about the likelihood of success or failure. I suspect that thousands or tens of thousands of would-be agencies have failed during that time, and would argue that the ones we see represent a highly atypical group.

The question is, do most freelancers have what it takes? Going by comments here, on mailing lists and other forums, I would say that the typical freelancer is temperamentally unsuited to the rough-and-tumble of corporate life.

Regards,
Dan



I've mentioned only the agencies that have been very successful. But there are a lot of agencies
which survive without making big bucks and earn what freelancers earn. I think most translators here don't have a continuous flow of work even the most successful ones. However, I agree that a lot of freelancers don't have what it takes. However, you seem to forget that freelancers also have admin and marketing costs. Some freelancers here are members of a lot of associations and it must cost them a lot of money.

[Modifié le 2018-11- 27 09:15 GMT]

[Modifié le 2018-11-27 09:16 GMT]

[Modifié le 2018-11-27 09:19 GMT]

[Modifié le 2018-11-27 09:25 GMT]


 
Christopher Schröder
Christopher Schröder
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Swedish to English
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I don't see it Nov 27, 2018

I used to do work for a couple of translator co-operatives/partnerships. They were just agencies in a very slightly different form.

Remember that the reason why many of us work alone is that we want to work on our own terms. As soon as we start working with others, that changes.

I would agree that it's best for everyone when agencies are run by translators, but they all seem to be getting bought up by the big boys now.


sdvplatt
 
gayd (X)
gayd (X)
own terms Nov 27, 2018

Chris S wrote:

I used to do work for a couple of translator co-operatives/partnerships. They were just agencies in a very slightly different form.

Remember that the reason why many of us work alone is that we want to work on our own terms. As soon as we start working with others, that changes.

I would agree that it's best for everyone when agencies are run by translators, but they all seem to be getting bought up by the big boys now.


Do freelancers really work on their own terms or do they work on the terms imposed by the LSP they work for in terms of rates,
deadlines free tests, non payments etc...?

However, I must agree that now, it's more difficult to launch an agency than it used to.

[Modifié le 2018-11-27 09:48 GMT]


 
sdvplatt
sdvplatt
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You do not work on your own terms Nov 27, 2018

Chris S wrote:

I used to do work for a couple of translator co-operatives/partnerships. They were just agencies in a very slightly different form.

Remember that the reason why many of us work alone is that we want to work on our own terms. As soon as we start working with others, that changes.

I would agree that it's best for everyone when agencies are run by translators, but they all seem to be getting bought up by the big boys now.


and more an more the role of freelancer is morphing into one of zero hours employee


 
sdvplatt
sdvplatt
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agree to an extent Nov 27, 2018

Richard Purdom wrote:

It's about time that this dogma and attempts to create a cartel were left in the dustbin of history where they belong.
An LLP as proposed would only create new divisions between those jealously guarding their territory, and those they regard as 'bottom-feeders' who are not fit to join the gang.

It's the 21st century, the old conceptions of employer/employer, vertical hierarchies etc., are irrelevant, we've moved to a project-based system, often remote, where peer approval is more important than academic qualifications which are often outdated and not applicable to actual practice. We work with clients and agencies, nobody is obliged to accept anything they object to, and there's a scale of talent and rewards for customers to choose from. Just how it should be, and how e expect to buy everything else.

Besides, the only legal point of an LLP AFAIK is to limit liability! Who would advocate that?


What is peer approval? You dont mean this site do you?

Agree on academic qualifications in this field - especially translation degrees though to say you do not need a degree in the source language would be going too far.


 
Christopher Schröder
Christopher Schröder
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Yes, by definition Nov 27, 2018

David GAY wrote:
Do freelancers really work on their own terms or do they work on the terms imposed by the LSP they work for in terms of rates,
deadlines free tests, non payments etc...?


Of course we do. Because we can always turn work down.

OK, there's normally a bit of give and take. But ultimately we have the power because we're the ones who do the work. They need us more than we need them.

But I was actually referring more to the freedom to pick and choose jobs and hours and states of undress and so on. As soon as you become en employee/partner/employer these freedoms are curtailed.


Sheila Wilson
Maria Teresa Borges de Almeida
Gareth Callagy
 
Samuel Murray
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@Simon Nov 27, 2018

SD Platt wrote:
I know the UK LLP model and that was what I was referring to.


Well, if you had said so initially, we could have avoided all this hot air about nothing.

The UK LLP model is quite unique (very unique, in fact). There is practically no liability, and there is no upper limit to the number of partners. In addition, you don't have to be a UK resident to be in a UK LLP (and if all members of the LLP are non-UK resident, then the LLP pays no tax in the UK).

The LLP itself has to submit its accounts once a year in the UK and be audit-ready at all times. If you're a non-UK resident, you'd still have to pay income tax in your own country.

I'm not sure if, when working as part of an LLP, my own country's tax department will regard the LLP itself as the source of income (as opposed to the LLP's clients). If so, then, if I were to get most or all of your work via the LLP, I would lose my sole proprietor tax benefits and get taxed as a non-business at the highest income tax rate instead of the discounted rate I'm currently enjoying.


 
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