Freelance consultant - what is it?

By “freelance consultant” it is common to mean self-employed consultant. Therefore, in this article, I will define the three different concepts of freelancing, consulting and being self-employed and how they relate to each other. It sounds a little bit like the start of a bad joke: “A consultant, a freelancer and a self-employed person walk into a bar…” In fact, they are quite intertwined in one way, but could also be seen as completely stand alone concepts as well. Hence, the meme, but let us now dig into them one by one.

freelancer, consultant, self-employed meme spiderman anna leijon

The classical meme with spidermen pointing at each other but in the context of consulting, freelancing and self-employment.

What is a consultant?

First of all, “a consultant” is a very vague term, as demonstrated by these two rather knowledgeable sources on the topic:

According to Harvard Business School, it is “someone who advises on how to modify, proceed in, or streamline a given process within a specialized field".
According to Alan Weiss in his book “The consulting bible”, he claims that "when consultants walk away from a client, the client's conditions should be better than it was before they arrived or they have failed." Furthermore, he also states that “there is no legal protection given to the job title 'consultant'”.

Thus, I believe that I can state that it is a rather fluffy concept, but there is one important part of the definition that I believe is key and which Alan also points out. That is the fact that a consultant is an external resource. Meaning that they are not hired by the company that is buying their services in question (unless they are internal consultants, which I will go through in a bit). I agree with Alan’s definition and would state that “consultants are external human resources brought in to help in exchange for money” (help in any way, shape or form). It is simply “a human resource as a service”.

There was a rather funny TV commercial on Swedish television when I was little for a consultancy firm called “Poolia”. In the commercial, ordinary people simply asked people in desperate situations if they needed help to which they answered “yes” and they then said “call Poolia” and walked away. Here are two examples of one being stuck with their tongue on an icy lamp post on a snowy evening and another one being stuck with their beard in a machine. The point of the story I want to highlight is that the consultancy company probably can help out with literally anything.

poolia do you need help consultant anna leijon stuck machine

poolia do you need help consultant anna leijon stuck lamp post

Thus, given Alan Weiss’ and my definitions, the character of the help itself is not specified. However, I would argue that the word “consultant” often is used in business and tech, but also in design, marketing, sustainability and recruiting, among other sectors (looka.com). Interestingly enough, consulting within the doctor’s profession is becoming more common in Sweden as well, but they have come up with their own name for it. Namely, “stafettläkare” or “relay doctor” (freely translated from Swedish) (dagensmedicin.se). My point being that one can bring in external help (i.e. use consultants) in a lot of different sectors, but not necessarily calling it “consultants”.

The difference between internal and external consultants:

An internal consultant is someone who is hired at the company who needs the help. However, the person is still brought in externally to help out with a particular project or in a particular area that is new to them. This is more common in really large organizations in which they have their own department consisting of internal consultants. (hbr.org)
An external consultant is someone who is not hired at the company who needs the help.

Synonyms for “consultant”:

Expert
Advisor
Specialist
Guide
Professional
Counsel
Pro
Coach
Instructor
... and more

What is a freelancer?

A freelancer is someone who is not hired as an employee, but rather takes on assignments independently and charges a fee (investopedia.com). The word “freelance” comes from the word “free-lance”, which means mercenary soldier (chambersharrap.co.uk and search for "freelance"). A mercenary soldier is a form of freelancing military resource who takes part in war on behalf of any country in exchange for payment. An interesting parallel to the modern day freelancers is that neither them nor the mercenaries necessarily sympathize with the country or organization they are working for. With freelancing, it is foremost a transactional relationship and exchange of money and services than anything else.

Synonyms for “freelancer”:

Gigger
Independent contractor
Expert
Consultant
Advisor
Specialist
Entrepreneur
Independent worker
Mercenary
Free agent
Non-staff
Self-employed
Working for yourself
Partner
... and more

With that said, now that we have already defined what a consultant is, it becomes easier to define what a “freelance consultant” is. This is due to the reason that as a consultant you can either take on assignments as an employee (as a part of a bigger company) or independently (via an own company). Thus, a freelance consultant is the latter setup of the two - one that takes on assignments independently. Consulting defines what you do - i.e you give help - and freelancing defines how you do it - i.e on your own or, if you are an employee, as a part of a bigger company. It is really that simple. It is more common in some sectors than others to call the “external help” consulting, but it can be freelancing nevertheless. For example, freelancing within photography is quite common but that is not usually called “consulting”.

What is self-employment?

Self-employment in its strict legal definition, and what I mean when I say it, is to be hired by oneself in one’s own limited company (investopedia.com). However, you do not have to be self-employed in order to work as a freelancer these days. In different countries there are different opportunities and legal requirements but in Sweden you can for example have different forms of companies that are not limited ones (so called enskild firma or handelsbolag and which are not own companies in the full legal definition). You can also invoice your clients without having your own company if you outsource that part to a third party. Some might find that convenient since you do not have to do as much bookkeeping. Thus, you can be a freelancer without having your own company. Due to this reason I believe it makes more sense to define a general freelancer as an independent consultant or contractor and not necessarily as self-employed. This Venn diagram describes it better.

self-employed freelance consultant diagram anna leijon

I am not one who makes beautiful illustrations, but I hope at least that they are intuitive.

You can be a freelancer without being self-employed and you can be self-employed without being a freelancer. That is why I always say both “self-employed” and “freelancer” when I write and speak about these topics. Furthermore, as I pointed out earlier, consulting is a word which describes the practice of taking in external help which is more common to use in certain sectors than others.

Synonyms for “self-employment”:

Freelance
Independent
One’s own boss
Working for oneself
External
Small business owner
... and more

How do the three concepts relate to each other?

Since I have been both an employed consultant and a self-employed consultant and a freelancer I would like to take this opportunity and recommend the setup whereby you are a self-employed freelancer. I recommend it since it is the setup with the most freedom and independence and also the most financially efficient one. You can read more about this in my other articles on my site.

In summary, a consultant is just an external human resource brought in to help in exchange for money (however, the term consulting is more commonly used in some sectors than others). A freelancer is someone who is not hired as an employee, but rather takes on assignments independently and charges a fee. A self-employed consultant is a freelancer, but a freelancer does not necessarily have to be self-employed and have their own limited company. There are other setups and third party services available on the market via which you can also freelance.

If we simplify it, here is a summary based on the pyramid below:

Consulting - what you do - i.e. come in externally and give help or advice etc.

The opposite of consulting would be to be part of the internal and continuous workforce

Freelancing - how you do it - i.e. through assignments that you take on independently

The opposite setup of freelancing would be to be employed

Self-employment - how you are getting paid - i.e. directly to your own limited company

The opposite setup of self-employment could be to be employed but also to not be employed but also not have a limited company, i.e. invoice via some third party service provider or the like and without having an own company as such

self-employed freelance consultant pyramid anna leijon

The aim of this picture is to illustrate the three levels which explain how consulting, freelancing and self-employment relate to one another. The further up in the pyramid, the more specific. The opposites of the concepts are explained in the text.

By now I hope that I have answered the question in the title of this article. What a freelance consultant is is just someone who offers their help independently and externally for a fee. The setup through which you can do it is either by being self-employed and taking on assignments in your own limited company or through other setups which also let you take on assignments independently and charge for it.

Why did I write this article?

My name is Anna Leijon and I wrote this because I want to fuel or accelerate the freelance revolution. I want everyone in the jobs market to be aware that there is an alternative to the traditional employment and corporate career ladder. Even if freelancing and self-employment is not for everyone, I want everyone to decide for themselves if it is something for them or not. Nobody else should make that decision for you. Corporations and consultancy firms benefit from the thresholds that exist to freelancing and self-employment since many employees are “locked in” and do not dare to break free. I want to minimize these thresholds as much as possible. One of those thresholds is the information gap among individuals concerning self-employment and freelance. A lot of people do not know what it is and how to do it. With articles such as these I hope to close that information gap.

I hope that I have debunked some myths and clearly explained how it works. I am engaged and invested in these topics and love to help others aspiring freelancers towards becoming independent just as I received help on my own path. Check out my other articles on these topics, such as "Frilansarguiden" or the Freelance guide, "Anställd vs frilanskonult" or Hired vs freelance consultant and "Konsultmäklarlistan" or The broker list (though in Swedish, but you could use your browser's translation help). I am super happy if you have any feedback to me so please e-mail me if you want to discuss this further, have input or questions: anna@annaleijon.com. Do not miss my next article by signing up to my newsletter (available in the footer)!

Good luck whichever path you take and if you have any questions, you can always ask them in my forum Freelance & Tech.

Please reach out to me if you have questions, find errors in the article or anything else: anna@annaleijon.com :)

/Anna Leijon

If you have any questions regarding freelance, self-employment or tech, please ask them in my open forum: Freelance & Tech