The use of freelance resources in the marketing world is a time-honored business practice. Sometimes you need freelancers for a specific client, for specific expertise, or to meet a crazy deadline. And increasingly, the industry is seeing the rise of business models like the virtual agency or strategic alliance models – giving creative services firms the flexibility to staff up, staff down, or add very specific skills and talent without the permanent headcount. Whichever your situation, at some point the likelihood is high that you will have a freelance, or independent contractor, relationship to manage.

First, a disclaimer: There are certainly a lot of IRS requirements that surround the independent contractor relationship so that the parties avoid the freelancer being treated like an employee for tax (and other legal) purposes. While you absolutely need to know about those, we won’t focus on them here, but instead on some legal tools that relate to freelancing in the creative services industry.

The Agency-Freelancer Agreement. No Agency should start a freelance resource on a project, and they certainly should not be exposed to any client information (nor should the Agency get the benefit of the freelancer’s ideas or services), without a written agency-independent contractor agreement in place. A description of the work and compensation are important, but equally so are these provisions:

– A work for hire and assignment of intellectual property rights (or at minimum a license to use) for original creative work developed by the freelancer to the Agency, or, sometimes, directly to the end Client. The ownership clause may be handled project by project if the freelance relationship is long term or covers multiple clients; sometimes a blanket clause for all freelancer contributions is appropriate.

– Confidentiality and other restrictive covenants. I take the position that confidentiality is an essential provision – about the nature of the work performed, the Client’s information (and sometimes identity), and, where appropriate, about the freelancer’s contributions. Additional provisions that are sometimes relevant and appropriate are a nonsolicitation clause (the freelancer and Agency’s Client won’t work directly together, and/or the freelancer won’t directly solicit the Agency’s clients), or, in more rare circumstances, a noncompetition clause (the freelancer will not work for a competitor of the Agency, or in Client’s industry).

– Liability protection for the Agency in the event of any intellectual property infringement by the freelancer, and for both parties in the event of negligent damaging behavior by the other, such as an unverified product claim in ad copy. (Also a great reason to insist on Insurance – see below).

Agency-Freelancer Intellectual Property Assignment. If you haven’t documented the intellectual property ownership issues up-front (see, above), an assignment of intellectual property rights in the work done by the freelancer to either the Agency or its Client is essential. In the world of U.S. copyright law, the Agency cannot transfer rights to the work to its Client if the freelancer hasn’t given those rights to the Agency. Secure a written assignment before the freelancer has moved on to other projects or pursuits.

Freelancer Errors and Omissions Insurance. I have seen enough legal issues arise in freelance situations to make this one of my top 3 recommendations. If the freelancer serves a lot of different agencies or Clients, it’s reasonable to expect them to acquire their own E&O coverage. In other situations, the Agency can sometimes add the freelancer to the Agency’s policy (you do have one, right?) for a modest cost.

Agency leaders and frequent-freelancers can save time and expense by having these tools as part of their standard onboarding practices for any independent contractors, and Clients will appreciate the proactive way the freelance relationships are managed to deliver excellent work and results.