Unless you want to burn the bridge of the client who you are working thru, I wouldn't do it. Going behind someone's back is...well...not good business. If you want to remain in business with that client.
I'm looking to subcontract freelance directors to help with overflow, and to expand my business. It's the ethics thing I constantly fear. Let's say I send a freelance director out to do a shoot. What's to stop him from chatting with the client and stealing that client from me? Obviously I'm marking him up, so he can offer a lower rate to the client and I'm out of luck. How do you folks handle this?
That is an excellent question. I personally would never have done that, but good editor does not automatically equal ethical giant, so... First of all it is a conversation you can have with the editor in advance.
You can make it known that a career is not a single job and if s/he wants continued work from you (as all freelancers must constantly look to the next job), they are better off to continue to work thru you. Back when I was free-lance, I knew where my bread was buttered.
You can also make an editor sign a non-compete document. There were times when I had to do that. This just basically said that I wouldn't steal a company's clients. Usually there was an expiry date that said the editor could do business outside the company after they hadn't worked with the company for after a certain period of time. I would usually modify that to include that I could continue to do business with clients I knew prior to working for this company.
In the end, the market isn't so big that a single client is gonna keep an editor working full time, so their best bet is to work thru you if you can keep them busy...
...Let's say I send a freelance director out to do a shoot. What's to stop him from chatting with the client and stealing that client from me?...
Well, having a written agreement with someone who is such a substantial contributor to the success of your project is probably a good idea, and could include a non-compete of some sort.
However, there is no substitute for you. I've had some hard lessons on that (lost a key client) when we hired a great freelance producer/director then sent him out of state with the client. At the end of the day the product wasn't what the client needed, and we weren't around to watch and apply some course corrections in the process. I'll never do that again - If I'm ultimately responsible for the client's satisfaction I will be there at every shoot.
Back to the topic, if you're not there, the client may perceive that the director is creating the solution and you're just a source of markups. If you were the client, wouldn't you want to jump to another credible supplier?
We tend not to mark up - possibly because the industry here is small and people always discuss rates. Having said that we do charge for pre-prod. I agree the loyalty factor does work but, we've had situations where working for the same client has required us to outsource - i.e. we're in one location and the client wants something covered the same day in another. So it's a case of 'my secretary will tell him what to shoot' - So to cover yourself you send someone who will take the initiative and do a good job. Most often will secretary/colleague will ask about rates and so on. Very tricky!