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The Fordyce Letter

Straight Talk for the Recruiting Profession

Articles tagged 'contracts'

Fees, Jeff's On Call!

Think You’ve Got A Case? Here’s How We Decide

Placements and the law logo

Proving you earned your fee is far different from earning it. Since we accept collections on a contingency fee basis, we become your partner in the investment. For this reason, we have developed guidelines to decide whether to invest our time and money. Using them has enabled us to attain a 93% collection rate. Here they are:

1. Is The Recruiter Being Realistic?

It’s natural for unpaid recruiters to be angry. Some say they’d rather see us get the money than let the employer get away with not paying. Others insist they want far more than the full amount as compensation for their pain and suffering. We admire them, but suggest they call their local bar association for a referral.


How Well Do You Know the Basics? Take Jeff’s Quiz and See


Do you know the laws relating to placement?  Take this quiz and find out!  The correct answers are at the end.

Need help? Check out Jeff’s previous columns here.  You can also consult his extensive collection of tips and information on his website www.placementlaw.com.

A. The offer in the contract between the recruiter and client is:

Fees, Jeff's On Call!

Even With a Week One Falloff, Your Fee Is Still Due


Hi Jeff

I enjoy reading your posts and replies on The Fordyce Letter. All of us in the recruiting industry appreciate your insight and thoughts along with a forum to discuss here on The Fordyce Letter.

Here is our firm’s dilemma:

A long-time client that we have been working with to help build their growing organization asked us to find a HR talent acquisition recruiter.

I have a duly signed and executed search agreement signed by the director of Human Resources. We identified, screened, presented several candidates for the position. A strong candidate was identified and pre-screened for the role by us. We presented the candidate, and were asked to set up an interview with the HR director. The candidate interviewed and received/accepted a written offer, which I negotiated. The candidate passed reference, background, drug tests and started the position. Unfortunately the candidate resigned after two days due to a family situation. Below is an excerpt of our search agreement paragraph 2:

Fees, Jeff's On Call!

Can You Get Paid Even When You Don’t Make A Placement? Yes, Says Jeff


Dear Jeff,

Thank you for the excellent advice that you give all of us recruiters. Your column, along with The Fordyce Letter, have guided me through many sticky situations that have come up throughout the years. You folks are the greatest!

I have been working on a contingency basis with a company that wanted to use the same recruitment agreement as a company that they had acquired. They gave me six sales jobs to work on.

I identified good candidates for three of the six territories and was starting to submit more applicants for the other three territories. I then received an email from the sales director that the company had just entered into an exclusive agreement with another recruiter, and I can only work on the three of the six territories that I have been working with. After all of this, only one of my applicants will be getting a job offer. Do you believe that I have any remedies? (They also suddenly want me to sign a new contract with the main company, although, the contract will be canceled immediately.) 

The Business of Recruiting

Everything That’s Wrong with Contingency Contracts and Some Ways To Fix It

Signing Contract

I imagine at some point back in the 60’s and 70’s the concept of providing recruiting services under a contingency arrangement made sense. Back then many “employment agencies,” as they were known, were exactly that: clearing houses for local companies they held established relationships with. As such, the fees — usually 10% of the employee’s first year’s salary — were paid by none other than the employee.

I ought to know, since as late as 1985, I obtained two interviews in Southern California through this arrangement. I still remember the companies: Roadway Express and Gallo Wine. At the end I did not accept either job. In my mind, any company that feels their job is so precious that I’m expected to “pay for it” is setting the stage for the wrong career path for me.

Jeff's On Call!

Protecting Your Full Fee In Sales Placements

Jeff Allen COllection Tip

Editor’s Note: Every Monday, Jeff Allen offers you a tip about what you should do to ensure you never miss out — or get beat out — of your well-earned fee.

Meet Jeff at the upcoming Fordyce Forum in June. Register now  to become eligible for a free, private, confidential one-on-one consultation with Jeff at the conference. Consultations are limited, and will be scheduled on a first-come, first-served basis, with Jeff arranging the time directly with you.

What Client Says:

“We hired the candidate at a lower starting salary.”

How Client Pays:

Business, Fees, Jeff's On Call!

Collection Tip: Be Careful of the Words You Use

Jeff Allen COllection Tip

Editor’s Note: Every Monday, Jeff Allen offers you a tip about what you should do to ensure you never miss out — or get beat out — of your well-earned fee. And FYI: Meet Jeff at the upcoming Fordyce Forum in June. Register now, save $200, and become eligible for a free, private, confidential one-om-one consultation with Jeff at the conference.

What Client Says:

We hired the candidate as a consultant.

 How Client Pays:

Over the past decade, employers have been cashing in on the consulting boom.  Unfortunately, contingency-fee recruiters have been the paymasters.

When you send a fee schedule that contains any of these 10 words, you’re aiming your recruiting revolver at your fee-free foot:

Jeff's On Call!

My Fee Is Due, But I’m Still Negotiating. What Do I Do?



Thanks for taking my question. I’m a huge fan of the column and enjoy reading your articles both in the print version of Fordyce and on fordyceletter.com. Also, although a bit unrelated, Placement Management is one of only 4 books I keep handy next to my desk. So suffice it to say I’ve been a fan of your advice and the straightforward manner in which you give it for some time. Wrote today because I have a Jeff’s On Call! question for you.

I have a company I’ve started doing business with. Sent the company my fee letter at the onset of the search, now a candidate has been hired and will begin in 4 weeks. The company HR & purchasing departments got involved toward the end of the interview process.

Jeff's On Call!

Jeff’s On Call!: Wrongly Classified as “Adverse”


This week’s inquiry comes from Mary Anderson:

Jeff, I have been an avid reader of The Fordyce Letter and your “Jeff’s On Call!” column for over 10 years. Reading your column has helped me to avoid a number of pitfalls that you never think will happen to you. Your insight and legal knowledge has been very helpful in running my business. I’ve run into a situation that I don’t recall having been addressed in your column before, but I know you’ll have the answer.

I’ve had a signed contract and have made placements with a firm since 2006. I have not made any placements with them for the last few years due to the economy, ever-changing HR personnel and hiring managers, etc.  However, I have always stayed in touch with them throughout these years and sent them candidates for positions that never went anywhere.

A couple years ago, this firm was bought by another firm, but remains a separate entity in name.

About six months ago, I started working very closely with two new HR people and several hiring managers in different locations. I sent them resumes, they interviewed my candidates, etc. etc. During this process, I was informed by one of the HR contacts that the new company had implemented a new HR system that requires all recruiting vendors to use this system for applicant tracking and client management. I was emailed an RFI to complete and return. The RFI was made up of questions only related to my company’s ethics program. Did I have a formal ethics program? Did we do an ethics audit once a year? Did we regularly train our employees on ethics issues. etc. I am a sole proprietor and do not have a formal ethics program, so I had to answer each of these questions “no.” However I added an addendum stating how long I had worked with the company, the names of the employees I placed with them, the hiring managers I worked with closely, and offered additional references.

I received a call from my HR contact and was told that they could no longer work with me because I was determined to be “adverse.” I asked what that meant and the HR person told me she was only the messenger and did not have any further information. I asked for the name of the person in compliance that made this decision and she wouldn’t give it to me. I told her I had an existing contract and reminded her that the firm has continued to accept and interview candidates from me. I told her my reputation was on the line and that it was very important to me to be able to discuss this further. She said she’d do what she could and call me back. She did call me back and said she was told by compliance that even if I talked to them directly, I would get the same answer. This time the HR person used the words “background check.” Well at that point I could hardly talk because I know for a fact that I have a completely clean background whether it be credit, criminal, or otherwise. She also said that the contract I had with them originally was no longer valid because the new firm was using this new system. I proceeded to tell her that the very last statement on the original contract is in regards to Termination Notice, and it states that either party can cancel the contract with prior written notice. I informed HR that I never received written notice.

At that point the HR person asked me to fax her a copy of the original contract and she would send it over to the compliance department. I did that, but have not heard anything back.

Jeff, can a company do this without informing me as to the reason WHY I have been found to be adverse? Although I don’t want to lose this company as a client, I am more concerned about my reputation. I have strong relationships with hiring managers in this company and I don’t know what I’ll have to tell them when they are ready to hire again. This could really damage my reputation. Also, if I knew for a fact that this was based on the RFI responses, I would research to see if there was some kind of ethics program for a sole proprietor, just so I could fulfill their requirements.

Please Help!


Fees, Jeff's On Call!

Jeff’s On Call!: Enforcing Old Fee Agreements


This week’s inquiry comes from Tarin Yankovich:

Hello Jeff,

First off, I have been a fan of you and the Fordyce articles you write for years, thank you for all your great advice! Your experience and wisdom have giving me the foresight on numerous occasions to avoid situations that would have otherwise cost my firm valuable business. Here is a recent question that came up; I thought you’d be the perfect person to shed some light on it for me and possibly your readers.

I run a search firm in Los Angeles and run a national practice within the Finance space. We work with many of the largest finance companies in the world. As most, our business goes in cycles with clients, meaning we’ll do many searches with a client one year and the next we won’t. As a result, sometimes a couple years go by during which time we won’t work with a client but still have contracts with them.

I have one particular client I worked with in 2007; we did many VP level searches for them and they were happy with our results. At the time I had several contacts at various levels within the organization in Chicago, Boston, and New York.  Since the 2009 recession and with a myriad of internal changes at the company literally all of my original contacts both in HR and management have moved on, their assistants have moved on, and even the President of the firm has moved on. Additionally, the firm changed their name a couple years ago using hyphenated name, and recently the firm has dropped the old name altogether and only uses the new one.

Here is my dilemma, I have continued to call on the firm and know who most of the new players are.  Recently I found an open door and am trying to rekindle this relationship with a new search assignment. I don’t want to lose momentum with a new contract if I don’t have to. I have a signed contract, my contract (not theirs), from several years ago, at a percentage I really like. I don’t want to haggle with a new HR person, renegotiate a good contract, and possibly lose the search or get a lower fee than I negotiated pre-recession. However I’m smart enough to see a couple possible issues. I have a contract, with no expiration date, which is signed by a signatory who is no longer there, under a name that the firm no longer uses. I do have some wording that says should the signatory leave his position the contract is still valid, but I fear I’m facing a few issues and want to make sure I’m covered. So, is my contract still valid?

Any guidance would be much appreciated.  Thank you Jeff!