Posted by: patenttranslator | December 14, 2015

What Is an Ethical Profit Margin for a Translation Agency?

A few years ago I saw Erin Burnett interviewing a young man on CNN. It looked like he was sitting on a bench in a park. She asked the young man who looked like one of the Occupy protesters, namely young, clean looking and intelligent, “Did you know that Wall Street banks paid all of the bailout money that they received from taxpayers back with interest?” The young man looked at her for a moment with a look of mild surprise and then said, “No, I did not know that”. This was followed by a short speech by Erin Burnett in which she suggested to the audience with her trademark acidic wit, combined with her good looks and keen intelligence, that the Occupy protesters may not have been very well informed about what it was that they were protesting against.

She may have caught somebody on camera who indeed was not very well informed, and I think that this was probably her intention. In any case, the short interview ended there and she didn’t give that person a chance to ask her, Erin Burnett, CNN’s star reporter, follow up questions. I read somewhere online that she is married to a Wall Street executive, so one can hardly expect from somebody who makes as much money as she does and who on top of that is literally married to Wall Street to engage in actual journalism when it comes to issues that involves her own husband’s business and the class of people that she identifies with. Her intention was to engage in propaganda on that CNN segment, not to engage in journalism. Otherwise, she would have tried to find a protester who was well informed—there was no shortage of such people among the Occupy protesters—and would have given that person a chance to ask her some questions. But we don’t get journalism from CNN anymore, we mostly get just propaganda, and lots of it.

When did the CNN (Cable News Network) become the CPN (Cable Propaganda Network)? And did anybody notice?

A good follow up question to ask Erin Burnett would be, “OK, so at what interest rate did the Wall Street banks borrow the money from the taxpayers, and at what interest did they then lend it back to the same taxpayers?” You don’t really have to be well informed about how our economic system works to know the answers to these questions. Even I know them. After the Wall Street bankers crashed the economy with their fraudulent financial schemes, criminal schemes for which they were never prosecuted, they were able to borrow money from taxpayers to save themselves at an interest rate close to zero and then they turned around and lent the same money that they borrowed at extremely low interest rates back to the generous taxpayers at extremely high interest rates.

Because I sometimes open credit card offers that come with junk mail just to see at what interest rates these credit cards are offered these days, I know that the average rate in these offers is 18 percent.

You don’t have to be very smart to make a killing when you sit on top of an economic system that is tailor-made for you and that readily overlooks your crimes, even if these crimes sink the world’s economy. In fact, you would have to be rather stupid not to make a killing from a system that is designed to make you rich at the expense of everybody else. And whatever one might say about the Wall Street banksters, they’re not stupid.

But the ethics of the Wall Street’s profit margins are not the subject of my post today. I am only using them as an introductory example illustrating an extremely unethical profit margin of a certain type of people, protected by our system, because it’s relevant to the real subject of the post, highlighted in the title.

There’s a lot of grumbling among translators on social media about the low rates that many translation agencies are offering to pay translators, and some translators argue that the main reason for the low rates is that the translation agencies are keeping an excessive amount of money for themselves instead of sharing it more equitably with the people who created the product called translation.

50/50 is the Typical Split Between a Brokerage House and an Agent in the Real Estate Industry

What then is a profit margin that would make sense from an economical viewpoint both for the translation agency and for the translator, a profit margin that would at the same time be practical and morally justifiable?

Let’s compare the typical profit margin of most translation agencies, which I believe is between 40 to 60 percent, to another industry that also uses a system of agencies employing large numbers of independent workers, for example, the real estate industry.

Here in the United States, most real estate agents work as independent contractors for real estate brokerages large and small and the typical commission paid to a real estate broker who finds a client willing and able to purchase a real estate property is generally 6 percent of the price of the property. If a house sells for 200,000 dollars, a commission of 12,000 dollars is paid by the seller to the real estate brokerage firm, which keeps 50 percent for itself, while the real estate agent keeps the remaining 50 percent. What does the real estate agent get from the brokerage firm in return for the 6,000 dollars in this case? I’m not an expert on real estate, but I assume that the agent must be getting a lot of support from the agency: access to information, a desk and a phone number at an office, a familiar company’s name on her business card, etc. Nobody is forcing real estate agents to work for a real estate brokerage firm, and I assume that the real estate brokerage firms compete among themselves to keep the best agents in their own stable of agents by offering them special perks.

If an agent is unhappy with a brokerage firm, she can dump the agency and join another one, she can work on her own, or she can start her own brokerage firm, all of which happens quite frequently.

There are also several other types of arrangements that are commonly used in the real estate business. New real estate brokerages are trying to figure out how to make profit by attracting new customers with a lower profit margin, for example with a type of brokerage called Sell By Owner, which offers only a minimum standard package of services in exchange for a low standard fee, and some home owners simply sell their houses directly to home buyers without going through a brokerage, etc.

But the six percent commission, split evenly between the real estate firm and the real estate agent, still seems to be the most common type of arrangement in the real estate business at this point.

And I think the reason for this is that, although the 50 percent that real estate agents have to pay to the brokerage firms is a lot of money, this profit margin is both practical and ethical, both from the viewpoint of the brokerages and of the real estate agents.

“I Don’t Care How Much I Pay the Translator as Long as I Can Keep My Profit Margin”

When I was just starting my illustrious career as an independent technical translator in the translation industry almost three decades ago, I often worked for a one-man translation agency in San Francisco. I liked working for his tiny agency mostly because I really like the guy, although he would often pay me late when his clients were late with payment. I would sometimes have to call, e-mail or fax him several times before he would finally call me to announce: “Your ship just came in, Steve, I am mailing the check, sorry for the wait”. I had to keep reminding him that I wanted my money because so many of his clients were paying late that he had to constantly “rob Peter to pay Paul” as he used to put it.

One pearl of wisdom that he shared with me almost three decades ago was this, “I don’t care how much I pay the translator, as long as I can keep my profit margin”. We never discussed any numbers, but I am assuming that his profit margin was typically between 40 to 60 percent. And here is another pearl of wisdom from this particular source that I would like to share with the readers of my silly blog: After Proz came online at the beginning of the new millennium, he told me that he likes to work with translators who are listed on Proz because “they have been trained by Proz to work for low rates”.

I don’t think the problem is the typical 50/50 split between a broker and a worker, especially since it also exists in other types of businesses and professions. Unlike the Wall Street type of profit margin, it’s not an excessive profit margin or an amoral arrangement.

I think that the 50/50 split between a translation agency and a translator makes sense. Translation agencies don’t provide a prestigious business name, or office space or any of the other accoutrements that real estate agencies provide for their agents. But they supply something that is even more important than the usual business infrastructure – they find a customer who needs a translation. That is why the agencies, the good ones, anyway, in my opinion deserve a healthy profit margin.

I think that at the core of the problem is the creation of the corporate business model of large translation agencies, which simply pay as little as possible because they don’t care whether translators can live on the rates they want to pay them. Just like the appearance of blind translation auction sites such as Proz, which definitely also helped to drive translation rates down (and there must be more than a dozen such sites in existence now), the application of the greed-driven corporate business model to a translation agency can be also traced back approximately to the year 2000, which is when I noticed that rates stopped going up commensurately with inflation.

I also think that translators who look for work on blind translation auction sites designed to keep the rates paid to to translators at a very low level because the translators must constantly compete with each other based on the rate, or who work for huge translation mega-agencies also offering mostly very low rates, should not be complaining about the sad status quo on social media, because they are the ones who willingly created a monster.

It would be much more constructive if instead of complaining about how unfair things are in “the translation industry”, the translators who are unhappy with what is going on started doing what real estate agents who get tired of being mistreated by a real estate brokerage often do.

At the very least, they need to stop working for the monster of their own creation, be it a mega-agency or a translation auction site, and try to find another brokerage that provides better working conditions for them.

They can also try to figure out how to find direct clients, in which case they will be able to keep 100 percent of the payment for their work.

Or they can try to start their own mini-agency and see how things look when you are on the other side of the brokerage business model.

But because something like that would involve a lot of work and creative thinking, and because something like that might also take them out of their precious comfort zone, they prefer to just waste their energy by venting their frustration on social media, where so many people will agree with them because misery loves company.

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Responses

  1. Interesting. I agree 50/50 sounds fair. But then if you need to pay a proofreader, an editor and a QA like some big agencies do, they would have nothing left… Are these steps really necessary and do they really improve the final “product”? Not sure. What I am pretty sure of is that they reduce the share of the translator…

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    • Patricia, I agree with your final sentence, but I have my doubts about whether the big agencies actually pay for proofreading, editing, AND QA. All three?!? My impression is that they do one and claim it covered all three. Actually, I’ve worked for a couple agencies (one small, one large) that didn’t even do that: my translations were sent straight to the client as soon as I submitted it. How did I find out? If I contacted the PM within 10 minutes after submission, with a question or concern (e.g., what did they think about my solution on p. X; what was their answer to my embedded question on p. Y; oops, I found a typo on p. Z), I was told that it was too late, they’d sent it off already. Pressing them about whether they saw the question or typo, they admitted no one read it before sending it off. (And no, I don’t flatter myself that it was because they had confidence in the quality of my work.)

      I call these “pseudo-agencies” because they are adding nothing of value; they are simply a go-between. This way of working is spreading as rates plunge, not only in the translation profession, but in other fields like publishing. Routledge, for instance, once a great academic publisher, now spews out books full of typos because it no longer uses any proofreaders. It has basically become a vanity press.

      Are pseudo-agencies justified in keeping 50% of what they charge the client? IMO, no.

      Liked by 2 people

      • FYO, Catherine-san, when I am the agency, I always proofread everything very carefully and I usually catch a few typos and make a few corrections, as I did just yesterday. But I never bother the translator with stupid questions because unlike a typical project manager of a generic agency, I know the answers.That is how I justify to myself my enormous margin of 50% (so that I could sleep at night).

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      • Catherine, re: ‘Are pseudo-agencies justified in keeping 50% of what they charge the client?,’ I would say that depends on the value of matchmaking as a service. If a client wanted to pay his broker 100% of my own rates, then who would I be to judge? Or if a colleague valued an intermediary’s services to the point of splitting the pay 50/50, who would I be to judge? Except clients don’t know, and that’s the problem. I feel a lot of things would need to change if clients had more access to information about the process.

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      • Steve, if you claim 50% for careful proofreading (with a non-negligible dose of editing and revising included, given that level of care) and management, then that’s a modest margin, I’d say. Suffice to say I’d prefer to keep on ‘just translating’, myself, by comparison.

        Interestingly, I think we’ve just hit what might very well be part of the crux of the problem: QA (to use a catch-all term) tends to be simultenously too expensive from the client’s perspective and too cheap from the QA’er’s perspective. I can tell you that as a translator I’m certainly not pleased with the proportion of time that goes into (multiple rounds of) self-revision before all of those very tiny issues get removed, which still doesn’t mean that a different linguist wouldn’t be able to find a basis, even a justified basis, for voicing a different opinion or even complaining.

        … A similar feeling must no doubt be experienced by businesspeople approving budgets originally featuring n rounds of editing. I have a hunch that’s an intrinsic part of the current shape of the client-agency-translator business model, even though many agencies would actually prefer to have budgets allowing for at least some QA/QC, especially as those same clients aren’t likely to just calmly say: ‘Well, okay, it’s true we cut QA/QC from the order to make a saving, so we created and accepted the risk.’ Or perhaps a decent businessperson would, but the shareholders, the lawyers and the whole rest of them not necessarily. (Down to court-appointed receivers/liquidators whose duty is pursue whatever monies may be owed on whatever ground.)

        If we could somehow validate QA/QC as an investment rather than an unwelcome cost, perhaps the problem would go away. We would need to demonstrate the madness in thinking that any job should be flawless or close to it without QA/QC being a standard procedure. We need to steer clients away from peeking at the partial cost of the pre-QA/QC product to try and grab the product before the QA/QC stage and still hope it’s going to be just as good (which is possible but unrealistic), with as just much guarantee (which is nonsense).

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  2. Good question, Patricia.

    And here is my answer: only the big corporate agencies and smaller agencies mimicking the corporate setup need to pay a proofreader, an editor, or a final QA super-master genius or whatever else these agencies use, or say they use.

    If you work with a small agency, only one person will be reading your translation and this person will be able to proofread and edit your translation because, unlike a generic project manager working for a mega agency, this person is actually qualified for the job at hand.

    Liked by 1 person

  3. All I can say is that once again, Patent Translator hits the mark with PRECISION! Many of us finally understand that by accepting work from the low-ballers/bottom-feeders, we perpetuate a corrupt system; but many of us then forget that the solution requires far more than venting with sympathetic co-professionals.

    My own approach has been to follow the advice, given here, along the lines of attempting to build a stable of direct clients. . .The challenge that remains, though, is that the longer the bottom-feeders are allowed to flourish, the more widespread the assumption, on the part of consumers of translation services, that agencies alone bring to bear the professionalism and credentials that make for good translations.

    In other words, clients today are so brainwashed by the agency model that they’ve suspended all usual critical/objective tests for determining where they can get the best product. Many are willing to pay MORE for junk produced through an agency than they will for excellent work prepared by a professional contracted directly, such that independents can no longer succeed even by undercutting agencies.

    I have actually seen this mechanism in action, when I’ve observed the U.S. government award translation contracts to agencies who will charge the government more (while paying their translators next to nothing) than would individual/independent bidders who have superb translation credentials.

    Could it be that it is actually too late, now, for independents who never attained a stable of direct clients to expect ever to do so?

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  4. I don’t think it’s too late, Lucille.

    Just like Amazon made it more difficult for small operators to compete with the corporate behemoth, mega-agencies made it more difficult for individual translators and small agencies to make the connection with direct clients, among other things by saturating search engines with their advertisements.

    The trick and the challenge is figuring out how to outsmart the mostly crap-producing outfits. Different people will find different solutions, but the solutions are there. Mom-and-pop stores are still surviving, and individual translators are still working for direct clients.

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  5. Perhaps it’s time for us (professional translators) to consider the ethics of working for brokers (rather than professional practices, i.e. agencies owned and managed by a professional translator who is able and willing to accept responsibility for the quality of the work delivered). Anonymously providing a professional service through a non-professional intermediary where our work can be altered by people are not qualified, is highly questionable to say the least, which is why it is largely illegal in other professions.

    I usually respond to the ‘opportunities’ offered by pointing out that there must be some mistake: “I am an independent, professional translator in private practice; I am not looking for casual employment”.

    I know, it solves nothing; I do it because it makes me feel good 🙂

    The point I want to make though, is that corporate agencies will soon start considering other parasitic opportunities when properly qualified professionals stop doing their work for pocket money.

    BTW, the example of the real estate broker/agent and their 50/50 split has a couple of honest commercial aspects that are lacking in the translation ‘industry’.

    The arrangement is clear and transparent from the start (50/50 split of a known fee) and the salesman usually knows the client and deals with him/her directly. The broker also has a clear incentive to charge the seller as high a fee as possible, thereby indirectly ensuring that the return to the salesperson is the best that can be achieved.

    This is not the case with translation agencies. The arrangement between translator and agency/broker is kept completely opaque: no client contact and no pricing knowledge. The agency will quote as low a fee as possible in order to win the project, which in turn justifies driving down the rates paid to translators to as low a level as possible.

    For translators, this ‘business’ relationship, is about as functional as a fly-wire door on a submarine.

    Liked by 5 people

    • Yeah, it’s probably rarely 50/50 any more anywhere, with them competing on the price and then putting pressure on us to fit within what remains. But there are exceptions. The largest corporate agencies can still charge 40 cents per word and pay 7.

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      • In my case it’s (approximately) 50/50. I would feel like a Wall Street criminal if I were to charge 40 cents and pay only 7 to translators.

        Liked by 2 people

      • Actually, 50/50 is a modest take if you do proofreading with some editing and revising included, as well as management, administration, client service etc.

        This said, would your view on this change if you were, for the sake of argument, to look at it from the perspective of *adding* something to the price of translation (e.g. translation + editing + management + service) as opposed to the perspective of *splitting* the fee?

        Sometimes I think agencies would be more comfortable charging more (and thus having more money for translators, among other things) if they started adding rather than splitting. (Value adding vs value sharing.)

        Liked by 1 person

  6. Excellent points, Louis and all of them are very true.

    I have to admit, I used the comparison to the relationship between real estate brokerage firms and real estate agents because the only other comparison I could think of was the relationship between pimps and working girls.

    So I went with the lesser of two evils so to speak, much lesser in this case.

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    • Your kindness got in the way of a more apposite analogy 🙂

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    • You know what, Steve? I enjoy the conversation between you and Louise. However, I would like to let you know what I got when I used the same anology in the agency where I worked for a while when I came back to my homeland and when I was at the auction site, which you mentioned in this blog post of yours, for observation of the trend of our profession: I got sneers from dear colleagues, whom they call peers.

      You see, nobody ever forced us go streetwalking. Those who stay at streetwalking sites or go with mega-établissement must have their reasons to take what the pimps leave them.

      When I was a kid, my father told me that “business” is in fact a legal fraud and a pimp is to a streetwalker a kind of symbiosis. Well, I did not quite understand him until I grew up to his age by then, that was, some 40 years later when I had seen enough the injustice on the globe.

      What would Lao Zi say about the injustice (or about “ethical profit margins”) we encounter throughout our lifes?

      “Heaven and earth do not act from (the impulse of) any wish to be benevolent; they deal with all things as the dogs of grass are dealt with. The sages do not act from (any wish to be) benevolent; they deal with the people as the dogs of grass are dealt with. May not the space between heaven and earth be compared to a bellows?
      ‘Tis emptied, yet it loses not its power;
      ‘Tis moved again, and sends forth air the more.
      Much speech to swift exhaustion lead we see;
      Your inner being guard, and keep it free.”

      Pearls of wisdom can be different from “I don’t care how much I pay the translator, as long as I can keep my profit margin” or “they have been trained by streetwalking sites to work for low rates.” Your advice in this blog is an example. Ponzi scheme worked well because most people believe that they are Peters and they will never be one of the Pauls while they know exactly that it is a fraud. So long the fraud is not blasted, it is the game people play.

      What can we do for our professional colleagues?

      Zi-xia said, “Allow me to ask what you call the Three Impartialities.
      Confucius answered, ‘Heaven overspreads all without partiality; Earth sustains and contains all without partiality; the Sun and Moon shine on all without partiality. Reverently displaying these three characteristics and thereby comforting all under heaven under the toils which they imposed, is what is called the Three Impartialities…

      So, keep on writing what you think right, Steve. We learn and the younger generations learn, as much as we can while there is always the syncronicity.

      And to you, Louis, salute! And to all the people I know during these years’ toil of being a translator!

      Liked by 2 people

  7. I find it difficult to asess what a fair share would be. Looking at them as resellers, cost + 10-20% markup would be okay, I guess; meaning 20% of all costs, not just whatever they pay the translator. Essentially 10-20% net income.

    But if you look at them as transaction owners and us as mere subcontractors, then things get more complicated, and it’s hard to put a cap on them other than robbing the client blind or trying to pay us below our own cost plus some healthy profit (against, cost+). Otherwise it would be hard to set a lower limit. On the other hand, it would be equally difficult to set an upper limit on our own demands.

    Regarding their having found the client, I think it’s not so simple. Yes, they own the ‘account’. On the other hand, they compete with us translators to later outsource the same work for us, often without much added value; that’s not necessarily a good reason to concede them a large share.

    Anyway, it’s really difficult to talk about percentages without looking at absolute nubers or the purchasing power.

    I also suspect we need a different kind of answer to the practice of agencies relentlessly putting pressure on our rates, trying to deskill and depreciate our work. Without that, it would be quite fair that they could demand anything they wanted and so could we, with both of the parties having to meet somewhere in the middle in order to be able to work together.

    Liked by 2 people

  8. Good points, all of them, Lukasz.

    I believe that translation agencies deserve their margin of 50 percent for a number of reasons, but the most important one is that they find the clients and match them with suitable translators. This is very important in particular for translators who are not able to do that by themselves.

    Plus I am also an agency myself, as well as a translator, right? So don’t ask me to believe that I don’t deserve my own profit margin.

    It is not true that they are able to add value to the translations and that is why they deserve a large profit margin. In my experience, they have no idea what is in the translation, most of the time they are unable to tell a good translation from a bad one, and if they were to try to do anything with the translation other than fix obvious typos, they would be likely to majorly screw things up.

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  9. What is a ‘fair share’ is not relevant in these circumstances. It is simply a flawed business model, because the translation ‘business’ simply seeks to exploit the work of translation professionals.

    Working as a professional and charging a fee-for-service is completely different from operating a business for profit. Different skill sets, different ethical issues, etc.

    There is no natural fit between the two; the ‘industry’ is simply parasitic and exploits the host. That’s why it does not work and why professionals generally work directly with the client.

    Trying to fix the unfixable is not going to be successful.
    The only thing that works is the way Steve works, i.e. a professional practice that also uses qualified colleagues, but remains responsible for the outcome.

    Liked by 1 person

  10. Well, Steve, I think the perspective changes everything here. If we see finding a client as a service or benefit done to ourselves, then the worth of that is difficult to assess, but we are the ‘owners’. But if it’s clients they honed and bred, then they are the ‘owners’ and to start assessing how much they should have or keep of that gets too close to distributivism and, ultimately, theft. Not in the simplest sense of stealth or robbery, but in the sense of usurping the reins of another man’s property (not in the same sense as a piece of equipment or a house, not even as intellectual property, but still somehow a proprietary sort of right). As someone who believes in an afterlifre, I would be quite afraid to do that.

    On the other hand, if we see them as mere resellers or brokers, we can certainly escape that charge, but the acquittal is not fully convincing, especially not when they accept and warrant the responsibility and liability an individual translator can’t hope to shoulder.

    Ownership rights versus payment for benefits make a world of difference here. And I would often question the benefits where I would be reluctant to question ownership.

    For example, agencies compete directly against us, and we would still exist and be necessary as a profession even if agencies didn’t exist, it’s hard to see agencies as a proper systemic source of work. Rather, they are a form of organization. This doesn’t unmake the ‘ownership’ that deserves protection (pretty much simply because it’s ownership), but it puts in a challenging light if one wants to stay on the right side of ethics and stay clear of usurping the reins of another’s property.

    We’re left a bit in the grey by how agencies have taken hostile steps against us and ventured into unfair advertising, as well as a campaign of systematic depreciation and pauperization (a peculiar of less than fully conscious systemacity, but this is possible, in a loose analogy to the collective intelligences of beehives, wasp hives and ants nest, all critters of little individual intelligence, my point here being that creatures of high intelligence could still have their conscious wits bypassed in this), which may in many cases be nothing more than a thoughtless pressure put on the prices in order to enable the cheap consumer product that’s easy to sell. And not to proper consumers but first of all to large corporations, acting as though consumers in abandoning the use of business reason and expecting to be wooed with small prices and big promises, ‘lies all of them, but pretty lies,’ as Conn Iggulden’s Louis XI of France would refer to Edward IV’s diplomatic overtures in Bloodline.

    This is difficult to wrap in legalistic terms. I’m a jurist, I’m used to it, I read mediaeval scholastic dissections of ethical issues in the original Latin as little more than a kid — and yet I would struggle to find ‘juridical content’ in that sort of thing. It’s more like war, which does know some laws but not too many.

    Luckily, we have the liberty of contracting in order to assuage men’s qualms about fairness. But then the agreement of two men must stand, there is no other way, particularly as there is no other basis for the justice of their mutual arrangements. It comes down to consent. This said, the consent is rarely full or fully informed or willing, and it can be called into question, especially wherever we are effectively having force used against us on a massive scale. Nothing as dramatic as a knife poking on the ribs… or is it? For some folks I know, ’tis little better, as children cry and bailiffs call, and bills remain unpaid. This all is difficult to tell apart from the pure operation of the inherently amoral free market (not immoral but not guided by morality, either), for which it would actually be hard to blame at least those agencies which are themselves feeling the pressure and cracking under it and trying to pull hard the plough over what’s left of the field.

    Next, we still have the freedom to say no to offers we don’t sufficient, and there’s little way of blaming us for it, ethically speaking. It’s as difficult to put a cap on our demands as on theirs; more difficult, in fact. It’s just that, in reality, they are not likely to meet with a uniform wall of refusal. And if they did, there would be anti-trust lawfare and lawshed against ringleaders, not necessarily even from agencies themselves, as opposed to governments and corporate clients. But yes, we can say no, and there’s little in the way of ethical cap on that. But it’s simply based on our freedom to contract, not on a notion of however much anyone deserves and what for.

    I think we’re left with a staunch defence of our rates, an undeniable right to disagree with unsatisfactory proposals — off of the sheer freedom of contracting — and make counteroffers. This could even be based on the knowledge of however much agencies are charging their own clients, although with the caveat that we can’t lay any direct claim to a share without being proper partners, even though we can propose just about any form and amount of remuneration as contractual counterparties.

    This reminds me of a conversation I once had with an agency owner. I was appalled at finding out about his rates after reading his vocal pleas for lower rates, right in the agency’s sign-up form. I wrote to cancel my offer of a fixed rate and said only a percentile deal would be possible. He found it unacceptable that a ‘subcontractor’ would claim a share, which, in his opinion, was reserved to partners. On the other hand, I reminded him that it was very much the broker’s fate to live off of a commission fee added on top of the fees of the people who really did the work.

    The bottom line, I think, is that both parties are free to make their own proposals, it’s claiming a right to dictate how much the other party should charge or pay where problems start.

    On a personal note, I’m fine with agencies adding a high markup on my translations, though they’re not usually able to. In fact, the more the better. I certainly don’t begrudge them the profit, in fact I wish they could make more of it than they do. At the same time, I don’t want them putting pressure on my own end-client fees by competing against translators in the same price range. Which is the real problem. They moment they stop doing that, things are going to get much healthier, with much less incentive to consider issues like these here.

    Sorry for turning a bit wordy, but condensing this without losing the content would probably cost me more time than I could afford.

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  11. One final remark that I would like to make is that it is important to remember that there are no general rules that would be applicable to “translation”. Everything depends on what kind of translation it is, from what language, to what language, who the client is, what is the deadline, who is the audience, etc.

    Although for example we both do “legal translation”, patents are very different from translating newly published laws into another language, very different rates are generally paid for different languages, and while some clients would think nothing of paying a lot for the same, others would go ballistic if I asked them to pay the same rate for Japanese and for Russian, etc.

    So the way I see it, the only rule when it comes to “translation” is that there are no general rules, and that everything depends.

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  12. Hi Steve, Just a quick correction. Real estate brokers in the U.S. must be licensed (take an accredited course and pass an exam). However, as a newly licensed real estate broker, you MUST work under another broker/agency for TWO years before you can take the real estate broker exam to work independently or open your own real estate agency. So you see, anyone can be a translator and translate a billion-dollar contract or patent, but the ability to sell a house is tightly regulated.

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    • I know that. I probably should have worded the sentence differently.

      The same is true also about hairdressers. Both professions are tightly controlled, while anybody can translate a billion dollar contract as you say.

      I just use real estate agents as a comparison to an occupation that also pays a commission to a brokerage firm, which is what translation agencies are.

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  13. The problem was that when it became easier for freelance translators to find direct clients, they did not charge direct clients twice their agency rate (because they felt “guilty” charging so much), but rather the same rate to the agency, leading to a circular decline in rates.

    Liked by 1 person

  14. Exactly. Excellent insight.

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  15. […] https://www.youtube.com/watch?v=CcflwUYYoXk A few years ago I saw Erin Burnett interviewing a young man on CNN. It looked like he was sitting on a bench in a park. She asked the young man who looked like one of the Occupy protesters, namely young, clean looking and intelligent, “Did you know that Wall Street banks paid all…  […]

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