Technical Writing Agencies
Most contract technical writers work through agencies. If you know anything about relational databases, you'll understand why this is so: just as the way to solve the problems of "many-to-many" relationships between two tables is to create a third table, routing the relationships through it so that they become manageable, so, too, with tech writers and customers. Like middlemen everywhere, agencies serve the customer, who needs writers for a project but doesn't have access to a whole stable full of writing talent. Contracts typically last from several weeks up to a year, so when the work is done, the contractors move on to another customer and another project. And agencies serve the writers, because the writers can focus on doing their jobs - writing - while the agency goes out and finds the work, bills the customer, and provides benefits in various forms to the writers.
Agencies and the IRS: whose employee are you?
There's more to the function of agencies than that. In the United States, tax laws are such that customers need to be able to prove that contract writers are not in fact their employees. If they were, the customers would be liable to the IRS for nonpayment of withholding taxes. It's a complex issue, with many different considerations used to determine whether someone is a contractor or employee, such as who determines work hours and location, etc. As a result of this complexity, and the natural desire of customers to avoid trouble with the IRS, the agencies offer a solution: they make the writers the employees of the agency, so there is little doubt as to their status. In other words, if you're an employee of the agency, it's harder for the authorities to claim that you're really an employee of the customer.
The agency business model
For this peace of mind, customers are willing to pay. Let's say you tell the agency you're willing to work for $50 per hour. The agency will then turn around and bill you to the customer at something like $75 to $100 per hour. Now, not all of that is the customer's peace-of-mind-from-the-IRS price premium. If you are the agency's employee, they have to do all the withholding and deducting that employers are required to do. They also bear the entrepreneurial risk of the arrangement: perhaps the customer won't pay the invoice on time or at all, or perhaps the writer won't work out. They buy insurance, they advertise, they have an office with a receptionist and computers and a bookkeeper and a coffee machine, and all these things cost money.
Some agencies take on the entire writing project. What they offer the customer is a turnkey operation; they run the whole thing and actively manage the output of the writers. More commonly, agencies do nothing of the sort: all they do is bring you to the customer and handle the billing. Around holiday time, they send around little gifts to the relevant people in the customer's organization to thank them. And the writers do the writing.
Partly because of the whole IRS scare, which makes customer companies want to use agencies, and partly because the nature of the relationship rather lends itself to abuse, many customers will only work with designated "preferred vendors" - agencies that they have established a long-term relationship with. This is money in the bank for those agencies: the marketing is done, and from that point on, it's a gravy train. If you want to work for the customer as a contractor, you'll have to go through that agency.
Alternative agencies
The agency business model described above is by far the most common. It works for all parties: the customers get their protection from the IRS (though perhaps this perception is a bit exaggerated), the writers get their contract work, and the agencies get a nice reward for their risks.
But there are also alternatives to this arrangement. Some contractors don't need a typical agency to find customers for them, because they either already have them or know how to find them on their own. Still, the customers feel they need the legal protection of an agency, and do not want to engage the writer's services directly on a 1099 (independent contractor) basis. Enter the model of agencies serving as employers of record. In this model, the contractor and the customer find each other on their own. Then they select an agency for the contractor to work through for the purposes of the project. The agency does not market the writer's services. And most of the entrepreneurial risk is removed as well. This allows the agency to significantly reduce the fee it takes for providing a service. Of course, writers never pay fees to an agency out of pocket. What this means is that the agency adds a smaller premium to the writer's bill rate in the invoice to the customer.
Choosing an agency
First consider what kind of agency you need. If you're like most writers, you need an agency to do all that icky marketing stuff and line up the jobs. What they make on top of your rate is of no concern to you - and indeed, they will not disclose it to you. If you go through what we'll call these full-service agencies, all you need to do is pick a good one.
In some cases, this could mean answering an ad in the paper or on the net. You'll see agencies with ads proclaiming how they need writers with these and those skills for a variety of projects. Often what that means is that they don't have anything right now, but want to build up their resume files, which is what they use to sell to customers. When they actually get a job req (requisition), then they'll start making calls to find the warm body to fill it.
Probably a better way to choose an agency is to network with local tech writers in your area who work with agencies. Find out who has a reputation for integrity - some do, some don't - who pays on time, who offers what services and benefits. Then approach the agencies yourself and make clear what your ground rules are. Common issues include writer approval before the agency submits the writer's resume anywhere, timely payment, and bench time.
Of course, it also happens - and we speak from experience - that agency recruiters call you if you have your resume posted on job sites. In that case, try to evaluate the position and the agency as fast as you can. If the offer is a good one, go for it. Contract work isn't indefinite, anyway, so how bad can it be?
You might also consider a consulting company, which typically takes on entire projects. If you're willing to travel relentlessly (typically every week), this can be a great way to gain experience fast.
Finally, if you can find your own clients, but need an agency to be employer of record, you can either set up this sort of relationship with a full-service agency - something they're not often set up to do well - or go with an alternative agency.