MBO Partners: A Business Platform for Independent Consultants & Freelancers

As part of our broader research looking at freelance and contingent work, I interviewed Gene Zaino, CEO of MBO Partners, last week. MBO offers a service providing a legal and financial infrastructure for independent consultants and freelancers.

Although not well known, MBO has assembled a large client base – they say they have over 15,000 independent consultants and freelancers using their service.

Their infrastructure service includes (from their website): ”group health benefits, retirement programs, a business and medical expense reimbursement program, billing and invoicing, and more.”

They provide these services, in part, by becoming the “employer of record” for their indenpendent consultant clients. This means, legally, the consultants and freelancers work for MBO.

But this employment relationship is for administrative, legal and back office purposes only. The independent consultants continue to run their own businesses as they see fit, and are fully responsible for almost all client-facing activities.

MBO’s service solves a number of business problems for the independent consultant:

1. Since MBO is the legal employer of the independent consultant, there is no compliance risk for clients. With worker classification becoming an increasingly problematic issue for large corporations, this is a real benefit for independent consultants and companies they serve.

2. MBO handles contracts, billing and collections. This cuts down on the administrative time and effort required by the consultant. MBO also has existing master agreements with several thousand client organizations. These existing contracts can be used by all MBO consultants, making contracting easier.

3. MBO offers group health and other benefits. And while the consultant has to pay extra for these, because they are group programs they will likely be cheaper than other options.

MBO charges a flat rate of 5% of billings for their services. The agreements are short-term and the independent consultant can opt out of their relationship with MBO at any time.

I talked to an independent consultant who uses MBO at last week’s Freelance Camp. He said MBO saved him a lot of administrative time and effort. He also said his accountant estimated he broke even on their service before accounting for health care costs. The estimated health care savings were $500 per month. He was very pleased with MBO.

MBO is targeted at high value knowledge workers who want to remain independent, but are also looking for administrative support and access to benefits. If you fit in this category, MBO is well worth taking a look at.

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