Ask HN: Pitfalls in jumping ship to a client company?

Perspective context: Am CTO who has converted consultants to staff before.

There is nothing stopping you personally from changing roles like everyone says and non competes are not enforceable in California.

However B2B contracts usually don't have any such limitations, so there might be a liability for damages between the client and your current company. This is the main reason you need to raise this up to people who has insight into the contracts between client and your current company ON THE CLIENT SIDE FIRST.

Then, and ONLY then imo should you bring it up with your current employer to try to do it in a way that steps on no toes. You need to make sure that the client is allowed to do it based on the contract frameworks AND that they want you before you open that can of worms. It might also be beneficial to have the client be the one to approach your current employer in a gentlemans approach, especially if your client has access to higher up decision makers than you naturally have in your current job.

Then it's up to your current employer how much hell they wanna raise and your political manouvering internally and how you break the news will probably be integral to that. However as long as there are no regulation of this between client and current employer the only thing you might be doing is burn a reference bridge.

great point on the contracts side, I will look into this

I haven't been in this situation, but I observed these situations where I worked at.

Make sure there are no clauses in your contract stipulating what they can hold you accountable for, if in doubt, consult somebody with a legal background. Consider that the relationship with the old company might be tarnished no matter how well you handle this.

In general, I would:

- Ask the client company directly, not by applying via posting, but by approaching somebody high-up who knows that you're consulting for them

- Disregard any HR rules or promises, the only things that bind you are the contract (where enforceable) and law (can't comment here)

- Make sure that the fact that you were a consultant (implied temporary relationship), doesn't put you to a bad start with the new company (ie. "we don't need this guy full time, he's only taking responsibility over something small")

- Carefully plan how and when are you quitting

> Ask the client company directly, not by applying via posting, but by approaching somebody high-up who knows that you're consulting for them

Yes, I second this.

I work for a consultancy in the UK. Occasionally someone leaves us to join a client. Our contracts with our clients prevent "solicitation" i.e. trying to encourage some to leave us to join them.

In practice we never use those clauses - it's almost always better to maintain good relationships and reputation with clients. Plus it's legal for our employees to move jobs to them, it's just the solicitation bit that's not allowed.

There was a case at my previous company (that happened before I was there) where a client that wasn't paying for work done, also tried to get the entire project team to leave and join them. They did this by emailing their work email address thereby handing us incontrovertible evidence of breach of contract. This was used as additional legal ammunition to force them to actually pay us. It never made it to court or anything.

> Our contracts with our clients prevent "solicitation" i.e. trying to encourage some to leave us to join them.

I have seen same thing, it is no solicitation but if someone joins on their own then it is not a breach of contract. In fact, I learned about this because once I asked one of our vendor (also friend) to apply for a job in our company, in front of my boss. My boss immediately corrected me that we cannot make such a comment.

Later she told me it is totally fine if he applied on his own but any hint of solicitation from us will disqualify him or get us in trouble.

Also with the same vendor, I had seen their people joining our company quite a bit. And they continued to do business with us.

Hey, I did this ~5 years ago! I was working as a consultant in client company's office (4 days a week) and they opened a position similar to mine there.

I contacted our legal team to ask about the no-compete cause but they told me that the client is not a competitor to my employer so no problem there. No mention about recruiting from supplier either.

Luckily all went well and the client company negotiated things with my employer. I have no idea what kind of compensatory deals they made behind my back as my employer was asking for an yearly fee for my service.

Getting the employers to negotiate about transferring a specialist worked for me, hope you find a solution too.

I've been really happy working for a client, handling multiple different clients was stressing me out.

In the old days accounting firms used to love it when their staff went to a client, they saw it as reinforcing the long-term relationship. I dont know if any of these terms have meaning in the modern era.

Came here to say this. When I was at PwC it seemed like the CFO at all of our clients came from PwC.

Just convince your manager that it was their idea, and it will benefit them and save the company money to let you escape and work for the client, like how Colonel Hogan manipulated Colonel Klink on Hogan's Heros. Maybe your manager will even follow you to the client's safe house!

Klink Encourages Stalag 13's POWs to Escape - Hogan's Heroes - 1970:

https://www.youtube.com/watch?v=WMh8fjO2R50

Convinced he's on the trail of a big-prisoner escape operation, the Kommandant tries to make Stalag 13's POWs feel comfortable escaping so he and Schultz can follow them to the operation's safe house. A witty episode.

You're correct in your intuition that this will affect the business relationship. Would your potential new employer prefer you over the business relationship with your current employer? If no, this is a risk for you which could potentially lose you both job opportunities. In any case you need to discuss this with your potential new employer as soon as you apply.

Some managers are empathic if you are open and honest and you might try disclosing your plans to your current employer somewhat early during the hiring process. This might it less likely for the business relationship with the client (your potential new employer) to sour. Of course, there is the possibility it backfires. Depends on the relationship between you and them.

I have seen this done a few times without consequences BUT always after a pretty strong informal expression of client's interest.

You will need support from client company anyway, so I would start with an informal conversation with your team there. If that team wants you they can cut most of the interview process, too.

But there may be pitfalls: they may be contractually restricted from hiring you (not legally prohibited, but enough to make it a pain not worth it), etc. An informal conversation can explore options without your intent to jump ship leaking to your current employer.

I'm trying to avoid triggering any sort of non-solicitation breaches by discussing this outside of the normal recruitment process, but I am confident that they would love to have me join them. You mentioned that if the team wants me it could cut out some of the interview process, any experience with this happening and how it could play out? At what point do I mention to the recruiters that I already have some relationships into the team?

The main thing to think about here is that your application is going to be back channelled to whoever manages the client account at your current firm. How will they react to this?

Other than the points already raised around the client's contract with your employer possibly containing clauses saying they can't hire you away without discussing it with your employer I would be worried about any NDAs you've signed.

You're going to be entering an environment where you're still talking about the project you were working on day to day, but now you'll be doing so with a client. If you can make it an amicable move by ensuring both sides are involved in the discussion you're probably fine, but if your current employer doesn't want you going I could see them making use of NDAs to severely restrict what you're able to do, even if just by forcing you to make sure everything you discuss in the new job is meticulously documented in order to cover yourself in the case of future legal actions.

As others have also said, get a lawyer (your lawyer - anyone hired by either your current or future employer isn't your lawyer, they are the employer's lawyer) to review everything before making a leap.

thanks, it did not occur to me that they might be able to make use of NDAs in this way (forcing me to document everything discussed in case of legal action), I guess this brings up a fundamental question on where the line is between company proprietary/protected knowledge, and then knowledge/expertise one builds up over many years working on and becoming an expert in a niche area?

It is common for consulting or professional services contracts to include non-solicitation clauses. In other words, the client company may have already committed to your employer that they would not hire any of its employees for the duration of the contract and for some time after.

If you were not involved in the negotiation and signing of the engagement agreement, then you probably don't have any way to find out if the contract contains a clause like this. If it does—and even if it doesn't—the leadership of the team at that company may feel an obligation to tell your employer that you have applied for a job with them.

Any agreement not to hire employees without including the employees in the negoation would be illegal therefore void in most countries. Including the US where Apple and Google (maybe someone else) were caught having agreements not to hire from each other. It removes the ability for the employee to find the best salary/option/etc for themselves.

There is a difference between overall no-hire agreements (which indeed won't stand in many places) and specific clauses covering only people involved in a common project (and that often don't strictly prevent hiring, but e.g. require compensation).

I would suspect the same thing applies. Two companies are making agreements that affect a third parties ability to freely market their services. Non-compete clauses in employee contracts are in many countries not legally binding because they affect the employees ability to freely market their services. And in some countries where they are valid, they're are often very strict requirements on what can be put in the clause. I've literally had multiple contracts with non-compete clauses, not a single one was valid.

Clauses such as "If you hire this person you owe us X for an introduction fee" however would be more likely to be valid.

I worked at a small company where a vendor poached the team member that worked closely with the vendor.

The company was pretty bitter about it and switched vendors, and the CEO would often bad-mouth the vendor at speaking events with other small company teams.

Nobody was really nasty to the former colleague, although there was some light shade thrown their way as well.

You don't mention company size but if these are boutique shops or startups with sub 20 employees, and you aren't a role they regularly hire for, expect reputational damage to your new employer, you, or both in whatever sphere of influence your former employer has.

yes this is certainly a concern - it's a 100 vs ~100K type situation , but the niche area is fairly small. based on observed behavior it's quite likely that I / new employer will be turned into a scapegoat, this worries me sometimes but then I also realize that I wouldn't be looking for something else if I was happy where I'm at

Consider whether you can do this move with everything above board. These two companies (and more importantly, the people working in them) have a business relationship to maintain. You want to be a positive part of that story, not the one creating problems for everyone.

Ideally, you'd want to be able to discuss this move openly with both the target company and your current employer and get everyone's blessing. If not, there's a risk that if the relationship between the two companies sours because of your attempt to move, you'll be the one thrown under the bus.

Your client may have a contract with your employer which would stop them from hiring you. I would ask around. In any case, you could always apply and they say no. Nothing ventured...nothing gained.

Contracts like that are frequently unenforceable in the US. A no-hire provision is not a provision you agreed to, and yet it binds you. Courts take a dim view of this sort of restraint on trade.

That's true, but it might still scare the client / new employer off.

This is right. Sure they can hire the new person but they are immediately in breach of the services contract. Sometimes the breach is with it.

The non solicitation clauses are not about stifling employee personal growth. They are about protecting the organization from having its resources pillaged. It’s a reasonable protective instrument in my view.

The two companies may have an mutual understanding whereby they do not take each others employees to maintain the peace. Even if not enforceable...it may create friction when trying to move over..

Depends on your reasons to be loyal to your current employer. Is it because they're really a great place to work at? Is it just to maintain some kind of arbitrary integrity? Is it the people, and if so, are they truly worth it and would they also choose to stay with you if presented with an attractive job offer? I think you might have encountered a pitfall already by believing you owe something to your employer.

this is what keeps me up at night, great loyalty to my team and not wanting to abandon them (but at the same time knowing on a personal level that I'd be supportive if one of them got a similar opportunity). Certainly for a long time I have felt like I owe something to my employer, and that loyalty will be rewarded, but recent months have taught me that the reverse does not apply, this has been a very hard lesson to learn

While there may not be a clause in your employment contract there may certainly be a clause in the contract between your employer and the client that could possibly be more hassle than it's worth for the client.

The only way to know is to go through the process with the client, declare the possible conflict early on and let them research it on their side to see if it's worth going through with. Best of luck.

thanks, since I'll be going in via the normal recruiting channel, I assume it's best to bring this up in the initial phone screening phase with the recruiter? or could this harm me if the recruiter decides to just back away without escalating it higher up the chain? it's big tech corporate, so not sure how much agency recruiters have, and how closely they work with the teams they are trying to recruit for?

The only one who can answer this reliable is yourself, but you do need to ask the right people, which in this case, is not us. Just ask around. Nothing wrong with letting people know you have eyes open for other opportunities. It's only healthy.

If both teams are very involved, the word will get out anyway, so just be open about it from the get-go.

Rule of life: always ask.

I’ve always said no is the second best answer and in most cases the sooner you get a definitive answer the better.

Not good advice.

This is not something you ask about.

Once you announce this intention you would become a danger to your employer and they would be best to let you go immediately rather than give you time to collect things to provide your future employer that would take away revenue from them.

If you don't have a job offer, you'd be playing with fire and will likely get burned.

Legal or not, it's possible current employer raises enough hell that the client says "not worth it." Now you've lost the new job and your current employer knows you're unhappy and less loyal than expected.

Maybe it doesn't go that sideways? But if it does, don't be surprised. Be prepared.

I did this and it was the best thing I ever did for my career. The contracting company was kinda neglecting the contract and the company I moved over was fed up. The company ended up agreeing to end the contract in exchange for my non-compete to be nullified.

I jumped ships to customer company and it proved great. That being said my non compete agreement didn't apply because there was 2 proxies in between so no direct competition. Better work agreement, also meant I could move countries, didn't regret it.

Contact a lawyer and / or the client company and ask about things. You - and the client company - can either just yolo and chance a lawsuit, or the client company can come to an agreement with your current employer and buy you out.

>> a role within that team which I would be absolutely ideal for

is the dual of that sentence true: is the position ideal for you?

yes, it's like it was made for me

Something I have not seen mentioned - just beware you might end up "stuck" at the new company doing nothing other than working with/on that very same piece of software you're currently working on.

They may never want to promote you or let you move to another team if you're "The Expert"(TM).

I’ve experience a sad opposite of this as well… it was a slightly different situation though. The consulting company was my own company, and a client convinced me to join their team as a T4 (Canada) employee and essentially drop the rest of my clients. At the time, things were slow and I loved the team I was working with, so I figured “why not?”

What ended up happening is that I got rolled into their (relatively broken) normal software development process. Advice and solutions that they would have previously asked for and let me solve turned into protracted internal meetings and discussions and seemed to carry a lot less weight than they did before. What would have been a simple meeting and SOW discussion and contract got turned into months of debate, meanwhile I was just helping random teams do bug fixes. The relationship completely changed and I ended up leaving about 6 months in when I started to feel like I was losing my edge and not being nearly as effective as I could be.

thanks for the insight, I'll keep this in mind

Were the people you know there in a position to recruit you?

If so, why didn’t they?

That’s where the footguns rest.

big corporate and no-solicitation policy I suspect, I'll need to work through the normal channels and eventually hopefully my application will make it to them