There are two situations when a freelancer hires another freelancer:
The First Option - The Good One
If you have so much work to do that you need help, then this is a justified situation for a freelancer to hire another freelancer. Very often, this is a good sign for every freelancer. I have seen that some freelancers have developed small companies this way.
The Second Option - The Bad One
If you are hiring a fellow freelancer, so you can have someone else to do your work while you’re making money on the price difference, then this is a huge disappointment. In this case, you are working against the basic freelance principles. Just to clarify, this isn’t prohibited to do, but it’s deeply wrong and unethical.
How to know that the time is right to hire another freelancer?
If you are doing so good that you wish you could clone yourself to finish all projects, you are ready to hire other freelancers. When a freelancer goes “corporate” on a small scale that’s always the good news. When a freelancer takes advantage of his fellow freelancer that’s a heartbreaking situation. Why?
It may seem that you're doing some other freelancer a favor, while trying to make money, but the truth is - you are just a middle-man, an unethical one.
How to avoid a freelance middle-man trap?
Before I decided to join goLance, I've received more than one "indecent proposal." In freelance theory, it doesn't matter who are you working for. Right? A client is a client. It doesn't matter if this client of yours is a genuine client, so to speak, or a freelancer just like you.
However, when you're dealing with the middle-men in the freelance industry, you're actually exposing yourself to additional and unnecessary risks. Your "client" gives you a job to do, but he or she isn't the one who's supposed to pay. What happens very often is that your payment gets stuck somewhere along the way because the real client isn't happy with the work or your "secondary" client wants to take advantage of the situation.
Am I working for you or someone else?
You don't have to be a rocket scientist to identify a freelance middle-man. All you have to check your potential client's profile. If he or she has been quite active as both a client and a freelancer, this should be a red flag for you. Pay attention to the ratio of projects your potential client has either posted as a client or delivered as a freelancer. If someone hires a fellow freelancer every now and then to do some small and "legit" work, such as logo design or web design, then you shouldn't worry.
On the other hand, if a freelancer keeps hiring freelancers in his field of work, for example a freelance writer hires other writers, then you have every right to ask a question: Who are you really working for?
If you are a successful freelancer then you should become a small freelance company. There's nothing wrong about it. Just don't get down the middle-man road because sooner or later both parties will hit the freelance dead-end.