After 5 or so years with the same clients, something's in the wind that I should start expanding my client base.

So I'm wondering about current practices out there in the IT consulting world regarding the form of contracting.

My preferred working arrangement is as independent consulting firm. That is, I am a company that sells a service. I am ABC Perl Programmers, Inc. You tell me what you want, I quote you a contractual price and a timeline, I worry about resources, work schedule, etc., and I bill you. I get paid if I deliver. You worry about nothing - whether I'm one or ten, whether I work in my underwear or a suit...you hire my firm based on projects I can demonstrate online, proving my/our capabilities. Because we develop a long-term relationship, subsequent successes for you build up your confidence in me/us. This is how I've always worked so far.

Next to that would be as a job-based individual consultant. That is, I'm Fred Jones Consulting, Inc. You know it's just me, and you get to review my personal resumé in detail and test me if you like. But I still give you a firm quote for a job spec, work on my own terms and get paid if I deliver to spec.

Finally, and of least attractiveness, is the hourly contractor. I'm just Fred the programmer, hired at an hourly rate for a specified time period and expected to produce at a certain level. You probably determine my work hours and require me to work in your office.

Question is, what do companies think of these arrangements these days?

Are companies still hiring small IT firms, outsourcing their development? Or have they internalized everything and want only contract programmers?

Thanks.