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At Arm's Length

Exclusivity, and What It Costs to Ask For

Requiring that somebody work only for you removes the thing that makes them an independent business, and it is usually asked for to solve other problems.

Exclusivity in practiceLength of engagementEconomic dependenceOther clients in fact

Reads as a businessReads as employmentCuts both waysDepends where you are

Four factors, and no total. Every bar is the same length: the side is the claim, the size is not. Nothing here was decided; it accumulated, which is how most of these arrangements change.

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Requiring that somebody work only for you removes the thing that most plainly makes them an independent business. It is also usually asked for to solve a problem that has several other answers, none of which anybody considered.

The practical issue in “Exclusivity, and What It Costs to Ask For” becomes clearer when expectations and evidence are visible to both sides. Used for how to monitor employees without being intrusive, open the relevant Monitask page can add time and project context, provided the purpose is disclosed, access is limited and every consequential interpretation receives human review.

This is the factor where the gap between what businesses want and what they actually need is widest.

The workflow in “Exclusivity, and What It Costs to Ask For” can be cross-checked against IPMA project-management standards. A useful review should end with named owners and written decisions instead of a copied checklist.

What is usually behind the request

Three worries, and they are different problems with different solutions:

  • That the supplier will be unavailable when needed.
  • That they will work for a competitor.
  • That the knowledge they have will go somewhere else.

Exclusivity is a blunt answer to all three and a precise answer to none. Availability is bought; competitor concerns are handled by confidentiality and by what the engagement covers; knowledge is handled by documentation.

The cost to the supplier

Their entire business. A supplier who works only for you has no other income, no other references being built, no market position independent of you, and nothing to fall back on if you stop.

If you are asking for that, you are asking them to take the risks of self-employment with none of its protections, and the price of it should reflect that.

The cost to you

More than the money. An exclusive supplier is economically dependent, which means they cannot decline anything, cannot price firmly, and cannot afford to disagree with you.

Those are all things you were buying when you engaged a business rather than a person. Exclusivity removes them and leaves you paying business rates for something that no longer behaves like one.

Exclusivity as a term versus exclusivity in fact

Both matter and the second is more common. A supplier with no formal restriction who nonetheless works only for you, because your work fills their week, is in the same position without anybody having agreed to it.

That situation arrives without a decision, which is why it appears in the next article on its own.

What is reasonable to ask for instead

Narrower things that address the actual worry:

  1. Confidentiality about your work, which is ordinary.
  2. A restriction on working for named direct competitors during the engagement, if that is a genuine concern.
  3. Reserved capacity, bought and paid for.
  4. Notice of anything that would materially affect availability.

Each of those is specific, defensible and considerably cheaper than exclusivity.

Competitor restrictions

A real category and worth getting right. A restriction on working for named competitors while engaged is common and normally acceptable; a restriction on working for anybody in a broadly defined sector is close to exclusivity by another route.

How far any of this is enforceable against somebody who is not an employee differs by jurisdiction, and in several places the answer is considerably less far than the drafting assumes.

Paying for it properly

If exclusivity is genuinely required — and occasionally it is, for security reasons or because the work genuinely consumes a full week — it is a purchase and it should look like one.

A guaranteed minimum of work or income, a longer notice period, a rate that reflects the lost optionality. Businesses that want exclusivity at the same price as non-exclusive supply are asking for something for nothing, and they usually get a supplier who had no alternative.

The supplier who offers it

It happens, and it should be treated carefully rather than gratefully. A supplier offering to work only for you is usually asking for security, which is a reasonable thing to want and is not what this arrangement provides.

Agreeing informally gives them none of the security they are after and costs you a factor. If the real answer is that both sides want a stable long-term relationship, that conversation is better had directly.

Reading your own position

For each long-running supplier, the question is simple and most businesses cannot answer it: do they have other clients, and when did anybody last ask?

The answer is not yours to arrange. But knowing it is the difference between managing an arrangement and discovering one, and it costs a single question in an ordinary conversation.

What this looks like from outside

A supplier with several clients looks like a business whoever examines them. A supplier with one looks like something else, regardless of what either side intended or wrote down.

That is the whole of it. Nothing about exclusivity is decisive on its own, and nothing about it is easy to explain away either.