Land of the Free

Law 1: Independence is the best hedge against a downturn.

In this post-paternalistic age, we're all on our own. That means that when the economy plunges, free agents will suffer the most, right?

Not necessarily.

In fact, free agents are safer in an economic storm than their job-holding counterparts. The reason: They're diversified. Whether you're in the stock market, the farmer's market, or the talent market, the principle is the same: Don't put all of your eggs in one basket.

The dotcom debacle only deepened this lesson. Many people went to startups hoping to hit it big in the game of stock-option roulette. They put all of their work chips on job number 35 -- but when the wheel stopped spinning, someone else's number came up.

In a world of churn and heightened risk, smart people are realizing that they're safer spreading their human capital across a portfolio of projects, clients, skills, and customers -- rather than investing the entire chunk in a single employer. "If one of my clients disappears, I'll survive because I've got several more," said Seattle's Nancy White, 43, formerly COO of BullsEye Internet News Service, a failed technology startup, and now president of Full Circle Associates, a one-woman microbusiness.

Let go of the idea that free agency is only for wild and woolly risk seekers. When you think about it, it's the only sensible strategy for playing the talent market.

Law 2: When times get tougher, quality counts.

It's long been a law of investing; now it's a law of the workplace. When a bull market stumbles, investors make what's called a "flight to quality," redirecting their money toward more-stable, secure investments. The same approach now applies to the world of work, as skilled workers make their own flight to quality -- quality of life, quality of execution, and quality of purpose.

In the Pleistocene era (circa 1998 and 1999), we truly believed in the promise of risk-free instawealth. With visions of Mark Cuban dancing in our heads, platoons of new-economy warriors marched to startups. Some were looking for work that mattered, but as the Gold Rush escalated into Gold Fever, more and more were looking for their big score. Nothing wrong with that.

Today, the fever has broken, and most of us are back to reality: We're not going to become insanely rich . . . but we're not going to be desperately poor either. And, goes the thinking, if we still have to work, we might as well do something that satisfies some deeper yearning. That's why we'll see this new flight to quality -- this broader quest for meaning -- with more people going solo, more people working in the third sector, and more people starting and running microbusinesses that aim to make a difference rather than just make a killing. It's no longer "all about the Benjamins," to borrow the title of hip-hop bad boy Sean "Puffy" Combs's 1997 hit, which could have been the anthem of IPO-dazed America.

Take Liz Tobiason, a thirtysomething marketing consultant who lives outside of San Francisco. California-born and the youngest of seven children, she began her career by selling advertising, and then moved to doing market research for Bay Area newspapers. In the mid-1990s, she landed a job at a Wells Fargo bank, where she was a high achiever. But after five years, she decided to go solo.

"The lightbulb really went on during bonus and salary-increase time," she told me. "I got the biggest bonus by far that I'd ever gotten -- triple the one from the year before. I was totally disappointed."

"Disappointed that it was less than you expected?" I asked her.

"No," she said. "I was disappointed that I didn't care. I realized that it wasn't the money that would make me happy, because I didn't like the job."

Two weeks later, her bank account flush but her soul depleted, Tobiason became a free agent. She worked on her own for a few years, and then last year began an assignment at Pagoo Inc., an Internet-telephony startup. After a few months, the company offered her a "permanent" job. Although she was hesitant (in part because she was pregnant with her first child), she accepted. After all, the people were great, the technology was promising, and the company let her work from home. Tobiason did her job, had her baby -- and in January, the company downsized her. "Am I glad to be a free agent again? Yes, thrilled," she says. "Will I ever take another real job? Probably not."