Posted by: patenttranslator | November 18, 2014

Advantages and Disadvantages of the Corporate Translation Agency Model

 

In an exchange of messages on LinkedIn in which several translators and owners of small agencies were expressing their opinions about why is it that low rates for translation seem to be more prevalent these days than just a few years ago, people mentioned factors including low barriers to entry both for translators and agencies, the fact that translators in Third World countries are happy to work for what would be considered starvation rates in countries with a high cost of living and high taxes in the Western world, negative influence of fraudulent concepts called “full matches” and “fuzzy matches” brought to us courtesy of greedy agencies wielding “indispensable tools” like Trados, etc.

Disadvantages of the Corporate Translation Agency Model

One owner of a small translation agency, who had many interesting contributions, said the following:

Steve – I’m guessing if you’re paying just over 10, let’s say 11, you’re then proofreading those translations yourself, right? I’m only asking, because proofreading usually costs at least an additional 3 euro cents per translated word, or is charged at a rate of at least 30 euros an hour (for German), so then you’re onto at least 14 as your variable cost. Now, I assume you don’t have a team of project managers to pay, plus rent, plus upkeep on dozens of machines, and software systems, plus electricity, telephone bills and – very significant – cost of sales (i.e. marketing-agency costs, website maintenance plus a business development manager’s salary to pay), not to mention a management team, because if you do, you will then need to charge the end client at least 25 euro cents per word (and more like 30 if you want to make a decent profit) – and, if you can charge that, and still get plenty of business, all I can say is “congrats”.

I believe that this particular participant in the discussion identified in her short contribution, (168 words if I don’t count my name), several of the main disadvantages of the large, corporate translation agency model, when we compare it to the traditionally small translation agency or to an individual translator who also frequently functions as an agency, which would be my case.

Of course I proofread myself translations that were done by other people for me. I don’t need to hire a proofreader because unlike most translation agencies, I only deal with languages and subjects that I understand, at least to some extent.

I mostly subcontract to other translators translations of patents in languages that I don’t translate myself. But even when a customer sends me a patent in a language that I don’t know myself, for example in Dutch, Italian, Spanish, Portuguese, or Chinese, I believe that I am a much more competent proofreader of translations of patents from these languages than a proofreader who would be paid 3 or 4 cents by a typical translation agency.

For one thing, I know a lot about patents because I translated my first Japanese patent more than 27 years ago, and in addition to thousands of Japanese patents, I translated over the years also many patents in different fields from other languages, including German, French, Russian, etc.

Anybody who knows several languages can understand to some extent text in a related language, which means that if you know French, you can follow a translation from Spanish or Italian if you already have an English translation, if you know German, you can do the same with Dutch, etc.

I can also read to some extent Chinese because I studied it, as well as classical Chinese, which is really how classical Japanese was written, when I was very young and thought in my youthful naïveté arrogance that I would be able to learn both Japanese and Chinese at the same (it took me a few months before I realized that I’d better concentrate on Japanese only if I really want to learn it), etc.

One of the advantages that multilingual translators who handle project in multiple languages have over non-multilingual translation agency owners and project managers is that they don’t have to rely on other people because they know exactly what they are doing. And when they do rely on other translators, they know ho to pick them.

It might be perceived as an unfair advantage from the viewpoint of a corporate translation agency that handles every language and every subject, as well as interpreting, subtitling, transcreation, sign language (maybe even exotic escorts if the price is right?) …. but, hey, nobody said that life was supposed to be fair!

As far as the other expensive items mentioned by this commenter in the discussion are concerned (a team of project managers to pay, plus rent, plus upkeep on dozens of machines, and software systems, plus electricity, telephone bills and – very significant – cost of sales (i.e. marketing-agency costs, website maintenance plus a business development manager’s salary to pay), not to mention a management team) – small agencies and translators such as myself are not burdened with a team of people who need to be paid, usually a pretty penny. They generally do not have a team of sales reps, management consultants, accountants, lawyers, business plan developers, marketing propaganda specialists and other necessary ingredients of what the corporate translation agency model is based on these days, as it is a business model that is based on everything else but knowledge of languages. People who run a small and highly specialized translation business only have to pay translators, albeit often before they get paid themselves, and sometime even if I they don’t get pay at all, for instance if a company goes bankrupt on them.

Careful as I try to be, it did happen to me a couple of times already.

I think that the biggest disadvantage of the corporate translation agency model, if we compare it to the traditionally small translation agency model, is that most of the money that clients pay for a translation project goes to completely monolingual people who do not in fact participate at all in the translating or proofreading work. It was also mentioned in the same online discussion that in the typical corporate translation agency model only about 25 percent of the cost of the translation in fact represents the remuneration of the translator, the rest of the cost is due to all of the extraneous expenses mentioned above. These unnecessary but extraneous costs are difficult to avoid in a translation agency model, in which the actual translator is considered to be so much less important than the other constituents of the business model, that the translator is paid in fact only a small fraction of the profit, all of which is generated by the work of this unimportant translator.

When an agency says on its website “We have 3,000 (5,000, 15,000, the numbers keep going up) translators in our database”, they are probably not lying. They really do have that many people captured in their database, although they probably have no idea how good these translators are – how could anybody possibly know that about so many  translators, some of whom may be already dead?

But the translation agencies usually do know which ones among the remaining living translators are willing to work for half of what other translators would charge because that is what people are willing to pay them in a different model in which the emphasis is on the translator who is perceived as the actual creator of the value.

In other words, in the corporate translation agency model, the ancillary, and in my opinion mostly parasitic occupations, parasitic because they were not needed until the emergency of the large, corporate translation agency model, do very well in this arrangement, while the compensation of translators is cut to a half or less.

Advantages of the Corporate Translation Agency Model

Just like McDonalds, Wendy’s or Ruby Tuesday restaurants have advantages over family restaurants, the corporate translation agency model also has some advantages over smaller enterprises. The main advantage of the corporate model is that it can tackle mammoth projects that must be translated within just a few days or weeks.

I described a project like that in this post a few months ago. This is probably not something that a small agency could do on its own, although many small agencies are often also drawn into these projects as I write in my post linked above. You do need a network of many project managers who can activate dozens of translators to start working immediately on these Kamikaze missions.

On the other hand, the quality of such translations will generally vary in the range from OK to really bad, and quite a few “translators” will just try to run everything through machine translation and then edit it so that it would look like human translation. In fact, one of the clauses in a contract related to the Kamikaze mission linked above, which was sent to me several times although I did not ask for it, prohibited the use of machine translations and stipulated that if such use is detected, no payment will be provided.

Large companies of course have a lot of advantages when it comes to financial resources available for things like advertising on Google, but that does not mean that a small, highly specialized service cannot compete in this area.

If you have a well chosen domain name and the content of your site is clearly relevant to a search on Google, your site will be probably listed among the first few hits on Google and other search engines even if you don’t advertise at all. Even a modern behemoth like Google must serve its customers relevant information instead of just advertising propaganda if it wants to survive.

The example often cited to buttress the alleged superiority of the corporate translation agency model is that of a manual that needs to be translated into 24 languages. This is something that is in fact suitable for the corporate translation model. But if a corporation needs to translate a lot of manuals into many languages, constantly and on an ongoing basis, would it not make more sense to create a specialized in-house translation department for that purpose?

Call me biased, but I can’t think of many advantages of the corporate translation model when it comes to the value that customers get for their money.

Nevertheless, some people working in a large corporation may be more comfortable working with a similar model also when it comes to translation. But not all, because I myself have been over the years and still am working also for several large corporations.

At least when it comes to technical and patent translation, I believe that working directly with translators and ignoring the large corporate translation model is a common occurrence, probably because the customer, usually a patent lawyer in my case, realizes that the success of his mission is quite heavily dependent on the quality of the translated materials.

The quality of translation has everything to do with how competent is the translator in a given language and field, while it has essentially nothing to do with any of the necessary elements of the corporate translation model such as a team of project managers, advertising managers, a team of sales people, marketing-agencies, website maintenance specialists and various other business development managers, which is where most of the budget is spent in the corporate translation model, instead of spending most of it, or at least half of it, on a highly educated, highly competent and highly experienced translator.

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Responses

  1. All this boils down to “what you pay for”; I had this discussion some years ago with Dell, that invented the “direct model”:
    – want a PC? You need a PC manufacturer that delivers what you want at your door
    – you do not want to pay a wholesaler, a retailer, TV ads to establish the brand, pricey downtown shops and salesmen bonuses, or you actually want luxury items (Apple does that with its Apple stores, this is a different business IMO)

    I failed to convince them (Dell is now a big customer of corporate translation, against its original direct model that they forgot also for their sales) but this “direct model revolution” is only slowly happening in translation.

    One could believe that everyhting is now set up for that: market places like Proz.com will let you find a translator with the specialties and language pair you need in a matter of minutes, SAP will let you add a vendor in a few clicks, the PO and invoice will be processed electronically in no time, but large companies still rely on corporate translation companies.

    This could be because the localization manager fears to lose his job of interface with the BDMs of the translation companies, but I believe this is mainly a matter of trust: you and I trust our translators and we know why, a large company trusts an other large company because it works the same.

    But I see more and more large company departments or divisions find their preferred supplier apart from the big machine of preferential suppliers; when they need a physician or a plumber, they may rely on word-of-mouth rather corporate policies.

    And this is where the corporate translation company model fails: they sell careful selection of the best person to do the job but they do not deliver on that and the best eveidence is they never tell you which human did your job; they sell lengthy and documented QA procedures that say nothing more than what a native reader could tell you in minutes, and customers pay a hefty premium for that.

    Translators or small translation companies that benefit from the word-of-mouth effect are like the first PCs sold direct by Dell decades ago: same quality without the cost of the middlemen, there is a market for that.

    But when all good translators are busy with this model, who will still work for large translation companies that pay translators half of what they are worth on an other market?

    Liked by 1 person

    • “And this is where the corporate translation company model fails: they sell careful selection of the best person to do the job but they do not deliver on that and the best eveidence is they never tell you which human did your job”

      They never tell you which human did your job! Hot, very hot! That’s actually the key to the problem solution.

      Like

  2. Many years ago, when I was an active translator (albeit part-time, my “day job” has never been translation), most of my work came through a small agency, Berkeley Scientific Translation Services. It was a really small shop then (late 1970s), though from its website it seems to have grown a bit: I don’t recall project managers when I worked for them, my contact was with the owner, who also did some translation himself. But the model looks to be still the same; not do too many things and do them well. They were a pleasure to work for back then, and probably still are, since it’s the same owner. I cannot imagine working for one of the huge LSPs, nor can I imagine buying translation services from one of them.

    Liked by 1 person

  3. “I cannot imagine working for one of the huge LSPs, nor can I imagine buying translation services from one of them.”

    I don’t know whether the big “LSPs” realize it or not, maybe they simply don’t give a damn at this point, but over time they made it basically impossible for highly experienced and highly qualified translators, for example for people who specialize in patents, to work for them.

    I used to work for a couple of them for quite a long time, but I have not touched anything from this source for well over a decade.

    Fortunately, there are other sources of work.

    Like

  4. “When an agency says on its website “We have 3,000 (5,000, 15,000, the numbers keep going up) translators in our database”, they are probably not lying. They really do have that many people captured in their database”

    Edited:
    “When an agency says on its website “We have 3,000 (5,000, 15,000, the numbers keep going up) translators in our database”, they ARE lying. All they really do have is many people captured in their database. What is a database, though? We decided to ask the International Labor Organization if a database of translators (or a team, or a network) is the same as a company’s staff (human resources, personnel), etc.

    I think claiming you HAVE the translators in your database is the same as claiming you HAVE, say, the mall or the supermarket in your area, or the service providers on your address book, or the names on the telephone directory, or whatever collection of names or services you may get hold of.

    I, for example, have a database of doctors, lawyers, plumbers, cable guys, tile-layers, brick-layers, masons, etc. who are always happy to work FOR me (to provide a service for me against payment), but I will never call them mine, nor will I advertise their services as mine.

    Like


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