WHAT IS HYPE vs. WHAT IS HIP

This is the time of year when recruiters ask me about which industry conference to attend. More specifically, “WHY THE FORDYCE FORUM?”

It’s a really good question. If you’re going to take time from your desk and money from your bank, you deserve to return home able to make more placements than when you left.

I’ve attended over a hundred conferences over four decades. Every size and shape of industry confab you can imagine. National, regional and state associations, chapters, societies, franchises, networks, retreats, boot camps, cruises, sleepovers, whatever. Among the few people who have attended more is Fordyce founding father Paul Hawkinson. We’ve done every kind of presentation from “marquee” to “just you and me.” Paul and I would return from one shindig after another marveling at what is hype and the lack of hipness thereof.

The Fordyce Forum is the realization of Paul’s dream to combine the benefits of a convention with the benefits of a more personal learning experience. When ERE Media acquired The Fordyce Letter in 2006, its expertise at hosting conferences made the event possible.

Unlike the one-large-size-fits-all staffing conventions, you won’t be hobnobbing with nurses registry or temp service folks. You won’t be taking precious placement time talking with spouses who don’t know a job order from a fee schedule. You won’t be crunched in a folding chair in a huge meeting room trying to take notes from an enter-trainer. You won’t be deluged with vendors selling things you can’t use.

The small niche recruiter enclaves have the right idea. There, you can really learn from high billers who fight their way through placement after placement every day like you. The problem there is that smaller conferences can’t attract enough professional trainers. The trainers don’t charge, don’t sell much product, and don’t generate consulting gigs because there aren’t enough people. So they pass on the smaller groups.

I’m like you – I’m too busy for small talk. I’m into efficiency. Results. Now.

When you sign up for the Fordyce Forum, you’re getting:

1. The best real-world training on the placement planet.

Amybeth Hale, the TFL Editor, invites everyone to submit proposals for sessions – megabillers, trainers, or anyone else with a solid background and idea. Since the other hosts of conferences don’t have the reach of TFL, they can’t start the selection process from a universe like that. Then Amybeth works with the conference chair to select the best and brightest to present the most practical sessions.

Amybeth knows what’s happening and listens to the buzz. A few knowledgeable people make the selection, so the roster of speakers is balanced. Their message is consistent, and the presentations complement each other.

2. An optimum learning environment.

Even the best trainer can’t train the acrobats while the circus is going on.

The large associations don’t hold “conferences,” they hold conventions. People don’t “confer,” they “convene.” Raffles, door prizes, awards, junkets, backslapping speeches, and an amorphous mass of people milling around. Distractions everywhere.

But at the Fordyce Forum, you see recruiters staying after the sessions to talk to the speakers about something that really matters to them. It usually centers around bill paying.

3. A “mastermind group” of sophisticated peers.

There’s a high degree of interaction among the participants. The quality of the participants is also high. Since virtually everyone there makes management or professional placements every day, there’s an instant identification.

From the halls around the meeting area, through the bars and up the elevators, recruiters share problems and solutions informally. Sourcing, presenting, closing, collecting.

There’s no pretentiousness.

4. Much Fordyce family fun.

You look around and so many people are enjoying themselves. Talking about what they love most. They’re smiling!

They feel right at home, and they really are.

5. Flawless execution.

Kate Wilson and her conference team are simply amazing. I need to tell you this because they make it look so easy.

Everything goes smoothly because they’re professionals at what they do. You don’t waste time waiting for a session to start, trying to get something resolved with some well-intentioned volunteer, or losing your way in some cavernous maze.

The team’s attention to detail, warmth, and genuine caring make the event a pleasure to attend.

6. Jeff’s On Site!

Once a year I meet with recruiters personally, confidentially, and for free. Only once; only there. We’ll pump my 45 years of experience into whatever placement or law things your heart desires.

I put my money where my mouthpiece is because you’re a cut above. How do I know? You showed up.

If you schedule a session, I look forward to helping you with whatever placement law issues you’d like to discuss.

Giving back to you is my way of thanking you for investing in yourself.

No lip … take the trip, and you’ll see WHAT IS HIP.

. . . and that’s WHY THE FORDYCE FORUM!

This week’s inquiry comes from Brigitte Welters:

Dear Jeff,

First of all, I really appreciate your advice and expertise concerning placement very much. I hope you can advice me on following subject matter:

A short introduction:  I manage a headhunting agency which is specialized in placement of professionals. This company is based in the Netherlands and we place mid-level to high-level professionals in the legal and financial field in the Netherlands. We work mainly for international firms. These clients are very appealing to our candidates since they offer interesting career opportunities and development for them.
Our clients set very high standards; multiple in-depth interviews and tough assessments are the rule. Working in this field of placement is very interesting and challenging; not one day is the same.

We now work for the largest part on contingency basis. Yes our clients are happy with our services, however, we now want to work for the largest part on retained fee basis. The reason we want to convert is that contingency poses many risks for us.

My question is how to convert contingency-based services to a retained fee business?

Thanks so much for your advice,

Kind regards,

Brigitte

Hi Brigitte,

Greetings to the Netherlands!

We’re anywhere on the placement planet, and on this JOC we’ve really got a lot of ground to cover. I’m delighted to help.

But before we go any further, close this screen.

Then:

1. Go to www.placementlaw.com.
2. Click the Placement Manager’s Law Quiz button in the middle of the bottom row.
3. Take the PMLQ.
4. Click the Answers to Placement Quizzes button at the end of the bottom row.
5. Grade yourself.
6. Get back to this screen.

If you’ve only done contingency-fee search, retained search looks like the ultimate way to make placements. You think you’ll feel more wanted, more secure, and more professional. Then you snag your first retained search. You’re delirious. But soon you think, “Am I retained or chained?”

I’ve done contingency-fee and retained search myself in addition to working with hundreds of recruiters in making the transition.

Let’s look behind the myth:

Contingency-fee recruiters may not have the marketing prestige of retained search, but they make far more money. (That’s why “b” is the answer to Question 39 of the PMLQ.)

This should come as no surprise, since the flexibility frees them from exclusivity, reporting requirements, and unrealistic demands from a front-fee client.

From the client’s standpoint, there are only four reasons to pay in advance:

1. The search is extremely sensitive and confidential.
2. The client really wants you to work the search on an exclusive basis.
3. The search is too difficult for a recruiter to take on a contingency-fee basis.
4. It’s cheaper than paying a percentage contingency fee.

For these reasons, only about 20% of the recruiters who say they do retained search actually do. Of these, only about half receive anything but expense reimbursement.

So basically it’s a marketing device strictly for image.

Let’s look at the five ways retained search has you chained:

1. It defies human nature. Would you pay a recruiter in advance? Is the client bargaining for the smoke or the hire?
2. It makes you feel either guilty or angry as you exceed your break-even point and are then working for nothing, with negative thoughts about the client and search at the very time you need to be positive.
3. The recordkeeping, reports, and justification required from the larger companies that tend to pay retainers can waste time and drive you crazy.
4. You lose the one thing that all truly successful professionals have in common: The ability to choose what you want to do.
5. Recovering retainer balances is a major challenge if the position hasn’t been filled directly by you. In fact, the client can be expected to demand return of the retainer.

Add to this that retainer clients are very fussy and capricious. Generally they wouldn’t be in the position of having to pay retainers if they didn’t keep changing the specs or even the positions!

He-l-l-l-o Brigitte! Are you still there? Okay. Now if you still want to try retained search, fine. Just avoid these four things:

1. Being limited to only one position. Searches invariably yield candidates in related disciplines who can be placed with the client.
2. No payment for hiring through other sources. This includes internal referrals, direct candidate solicitations, Internet responses, and advertising replies. All candidates should be interviewed by you, then referred if qualified.
3. Being solely responsible for reference checking. It’s fine if you care to check references on behalf of the client. But checking references that way has you guaranteeing their veracity. Include language in your retainer agreement that the client will not rely on the results in its hiring decision, or will check references independently.
4. Guarantees on performance. You’re being paid (at least partially) for effort rather than results. So a court will look to see your activity when the client demands a refund (and you’ve probably lost a lot of time). If you want to avoid returning the retainer, protect yourself by calling the partial payments “non-refundable progress payments.”

There you have it Brigitte. Start out with one retained search for a known, liked client. See how it works out. If positively, try another . . . then another. Make the transition slowly. If it’s not fun, stop doing it. Fun makes placements. Actually, fun makes everything!

Best worldwide!

Jeff

If you have a legal question you’d like to have Jeff answer here on The Fordyce Letter, check out Jeff’s On Call! and submit your question.

This week’s inquiry comes from Christine Hoffman-Hicks:

Hi Jeff,

I am a regular subscriber and reader of your insightful and informative column.  My question pertains to background checks for permanent (direct hire) placements: If our client is performing a background check on our candidate, should we still run of our own as well or is our firm protected from liability if something were to happen with this candidate down the road?  Our practice has been to always perform a background check if our client does not, but if they do we’ve deemed that acceptable. I can’t help but wonder if something were to happen, could we be held liable?

Thank you!

Christine

Hi Christine,

I’m so glad you’re benefiting from our assistance. That’s our goal!

Since you’re a loyal Fordyce fan, I have a gift for you – and all the other fans out there — that may well save your business.

But first, let’s answer your question:

Yes – I highly recommend reference checking when you’re actively working a candidate. That’s why I wrote the only book of its kind, The Perfect Job Reference. That’s also why it was a bestseller and remains one of the most requested library references on the shelves.

The failure to check references before a sendout – or not do it thoroughly enough – results in some very nasty disputes. Legally they include placement malpractice (negligence), breach of fiduciary duty (failure to protect the “client”), fraud (intentional misrepresentation) and even conspiracy to defraud (with the candidate) alleged by damaged “clients.” Please don’t rely on their reference checking. You can be sure they won’t when they come after you – big time.

Your E&O (errors and omissions) insurance may cover “errors” and “omissions”, but there’s no money in those allegations. The money is in the allegations of intentional wrongdoing. “Terrors” and “commissions” aren’t covered.

So count on that being the focus of any threat or actual lawsuit. Also count on punitive (to punish) and exemplary (to set an example) damages (in an unlimited amount in the discretion of the judge or jury) being alleged.

Then count on any E&O carrier writing you a “reservation of rights” letter telling you to forget about any coverage for intentional acts. What’s intentional? Deciding to send someone out without checking his representations? Of course! “Deciding” is intentional!

Fortunately, a majority of states have recognized a privilege to protect those who obtain information about a prospective employee on behalf of a client. This was acknowledged in a typical case involving a nurse’s registry. Judge v. Rockford Memorial Hospital, 17 IllApp2d 161, 217 P2d 687)

But you absolutely must have the consent of the candidate in writing before checking any references! Not just any consent. It must be carefully drafted, current, and air-tight. Otherwise, you will run into invasion of privacy allegations (punitive and exemplary damages stuff) if you pass any of the information along to a client.

So as my gift to you and the rest of the Fordyce fans looking to protect themselves, I’m going to send you our candidate Reference Check Authorization and Release. Keep in mind that the statutes, cases, and administrative rulings at the federal level and in each of the states change. Ergo always check with your lawyer (Ahem!) for updates.

It’s too long to include in a JOC column, so to open the gift:

1. Go to www.placementlaw.com;
2. Click the red JEFF’S ON CALL! button; and
3. Type Candidate Reference Check Authorization and Release in the Subject field.
4. Click Send.

I’ll reply with the Authorization and Release.

Now CHECK WELL!

Thanks for subscribing, fanning, and asking,

Jeff

If you have a legal question you’d like to have Jeff answer here on The Fordyce Letter, check out Jeff’s On Call! and submit your question.

This week’s inquiry comes from Rhonda Miller:

Hi Jeff,

I really appreciate your contribution of time and expertise in the Jeff’s On Call! column. Since I started reading it, I find that I have broader thinking on day-to-day scenarios and give more thought to the legalities of potential pitfalls. It is a much more enlightened perspective than before.

I have a placement in Illinois where the client has offered a 5K fee rather than the 25K required on my fee schedule because supposedly an in-house contract recruiter had the candidate in the pipeline (unbeknownst to the candidate) and had referred the candidate to some manager six months earlier – although not for any particular job.

This company is looking for employees with my candidate’s experience all the time. The manager didn’t act on the referral and then left the company. Therefore, nobody acted on the referral at all. (Since the candidate worked for a subsidiary of the client, it is possible that is how the contract recruiter got the resume. She is very aggressive, so it may have been on LinkedIn also.)

My fee schedule was signed before the client started using contract recruiters, and there is nothing about them in it. It provides that I have a 12-month referral period, but they say they had the candidate’s name in their system before my referral. There is no doubt that “but for” my efforts for four months, the candidate would not have been hired.

The internal recruiter explained the situation to the RVP for this division and came back with 5K in recognition of my efforts. She maintains that had this gone to her boss (who doesn’t want to pay outside recruiters) there would be no fee at all. I really worked long and hard on this deal.

What should I do? I don’t want to lose the 5K, but I also don’t want to give up half the fee in attorney’s fees and possibly even lose the 5K offered.

Okay, Rhonda.

Before we begin, I’d like you to lead our recruiter rooters in Rhonda’s Rah Rah. Help me Rhonda.

Ready? One — Two — Three:

I DID WHAT I DO;

THE DEAL IS DONE;

THE DUES ARE DUE.

Yay for Rhonda!

Now let’s get down to business:

First — sincere appreciation for expressing yours! I do what I do because it helps so many. Hearing “Go Jeff!” along the way let’s me know I’m doing my destiny.

Now about what you do – or rather — did.

Your inquiry is exceptionally valuable to our recruiter readers for several reasons:

1. It articulately lays out facts to warrant a full fee. You’re a pro and it shows.
2. It expresses the way so many contingency-fee recruiters are bullied by so many so-called “clients.”
3. It gives insight into why those recruiters willingly forego well-earned fees.

Your inquiry is also exceptionally valuable because it shows two things not to do:

• Don’t use the “but for” rule.
  It’s not a “rule,” it’s an exception. You’re inviting the reply that “but for” something else (anything you didn’t do), the hire wouldn’t have occurred. “But for” is the fastest way to “unpayment” of a placement fee ever devised.

Here’s the exception: “But for” walking away with 20% of what you’re owed, you could be paid in full (maybe even more).

• Don’t accept a 20% tip for great service while the patron slips past the cashier without paying the bill.

$5,000? I don’t think so!

Would this “client” have hired 20% of this candidate’s self? Would it accept 20% of his or her performance? Is it profiting only 20% of what it expected? Did you bring the buyer and seller together? Did it take four months? Did you “cause” the hire to occur? Did you cause 20% of the hire or 100%? Don’t get me started.

Compromising this fully earned placement fee not only compromises you – it compromises every recruiter. The dues are due when you do what you do. You did what you do. Diligently.

Because of what you did, that candidate is working at that “client.” As you’re reading this, that “client” is increasing its profit as a result of your efforts.

When I read an employer’s PSA (placement service agreement), I see an entirely different set of rights and liabilities than I did when I took Contracts 101 in law school. That’s because the courts (and even the state statutes) apply rules of construction to “construe” contract terms in accordance with “public policy,” equity (fairness), or consistency within the terms themselves.

Employer lawyers draft draconian, one-sided PSA’s to impress company management. Few even know the difference between a job order and a fee schedule. So PSA’s often read like an eye chart to someone with a good eye.

Of course, thorough legal analysis would include a review of the facts, the fee agreement (apparently employer-generated – ve-r-r-ry good for you – they’re construed against the employer), and the law in all jurisdictions involved. Until this is done by a competent attorney, you shouldn’t make any moves.

I mean that literally – do nothing more until you know the rules, the plays, and the end-game. I don’t, so I’m not predicting the outcome – but you deserve more than a 20% tip. Try to find a way to properly file the action in Texas. You’re there, so it makes sense for at least five reasons:

1. Home field advantage.
2. Convenience.
3. Cost-effectiveness, and
4. Much better control over your lawyer.

. . . and the BIG TEXAS BONUS:

5. Texas is one of the few enlightened states that will award you attorney’s fees if you prevail. You’ll get your court costs back too.

So many thanks for a great JOC inquiry, for letting me be myself (again), and for a reply that I hope will convince every recruiter reading it to pursue their well-earned fees.

Placements are tough to make. That’s why I got into something easy.

Oh, yes. Ready recrooters? Let’s hear it for Rhonda!

YOU DID WHAT YOU DO;

THE DEAL IS DONE;

THE DUES ARE DUE.

Best wishes for success!

Jeff

If you have a legal question you’d like to have Jeff answer here on The Fordyce Letter, check out Jeff’s On Call! and submit your question.

This week’s inquiry comes from Sue Yager:

Jeff, I really need your help. As an avid reader of The Fordyce Letter for 10 years now, I have always appreciated your insight and knowledge of the recruiting industry, and find myself needing your help for the first time.

I believe I have more of a moral dilemma than a legal dilemma. Here’s the story: 4 years ago I worked with another recruiter, who was with another agency, and we sometimes did splits. This other recruiter emailed a resume to me and told me this candidate was fantastic, and asked whether she would be a good fit with any of my clients. I called the candidate and did a full interview with her even though I didn’t have any job opportunities for her at the time. I kept in touch with this candidate over the past 4 years, and she is now actively interviewing with one of my clients. I have not spoken to the recruiter who sent me her resume for about 2 years, and the candidate hasn’t spoken to her for several years.

Here’s my dilemma: Do I still owe that recruiter part of the fee? I want to do the right thing, but I don’t want to give away money unnecessarily either. (P.S., there was never a formal split fee agreement in place between us.)

Thank you for all of your help.

Respectfully,

Sue

Hi Sue,

I haven’t heard from you for a while, so it was nice to receive the JOC inquiry. So glad you’ve been benefiting from The Fordyce Letter — for ten years!

Yours is both a moral and a legal question. Moral because four years have passed. Legal because it was an oral agreement – an enforceable contract with your associate four years ago.

For analysis purposes, the contact information on the candidate was a trade secret. This was part of your associate’s proprietary database, and it was given to you with the agreement that you would split the fee if you placed the candidate. Knowing you, there was no moral or legal challenge with this four years ago.

Technically, information doesn’t lose its trade secrets status with the passage of time. But it can lose its protection.

Here’s my trick to “objectifying” this dilemma, so you have (1) peace of mind, and (2) legal cover:

Google the statute of limitations (SOL) in your state. Since I know you’re in Nebraska, I just Googled “Nebraska statute of limitations oral contract.”… and Poof! There it is! Four years. Fair enough. This means that once the statutory period has elapsed, the contract can no longer be enforced. “It’s legally “old and cold.”

If you had a written split-fee agreement (which you should), you’d Google “Nebraska statute of limitations written contract.” That would pop up as five years.

So if it’s been four years since that oral split-fee deal with the other recruiter, I’d say that candidate is yours.

Why did I pick your state? Why not? There’s no federal SOL on an oral contract. With no written contract containing a jurisdiction clause, the other recruiter would probably need to file a lawsuit in Nebraska. Unless she’s a Nebraskan, that’s unlikely because of the cost, your home-field advantage, and the difficulty of finding, using, and enthusing a lawyer near you.

Just for fun, Google her state’s SOL. Four years is a long SOL for an oral contract, so it’s likely the one in her state is even shorter.

Only ethical recruiters ask ethical questions, and I’m delighted to answer yours with a “Yes!”

Now I have a question. Did that help every split-fee’er out there to resolve these everyday disputes fairly? If your answer is “Yes!” too, we’ve done our job.

So happily place, and best wishes for continued success!

Jeff

If you have a legal question you’d like to have Jeff answer here on The Fordyce Letter, check out Jeff’s On Call! and submit your question.

This week’s inquiry comes from Tom Skobel:

Hello Jeff Allen!

I have read and found to be very interesting the article you wrote April 15, 2009, entitled, “Jeff On Call: What Internet Job Postings Are Illegal?” I happen to be a college student studying Human Resources Management and find labor practice laws to be interesting, and I enjoy seeing them in play in real life….After reading what are considered to be illegal job postings, I discovered, what I believe, may be an illegal job posting. I discovered the job posting in question on a reputable job search website. The title reads: “Seeking Full Time FEMALE PERSONAL ASSISTANT for Busy Executive, ready to train and start very soon. ” In addition, one of the traits reads, “Recent college graduate – no more than 5 years out of college.”

From studying Labor Law at college and reading what you have listed in your well-thought out article, I believe this job excludes males from applying for this position — gender discrimination, which is prohibited by Title VII of the Civil Rights Act of 1964. I would like to get your expert opinion on this matter.

Once again, I enjoyed reading your article. I found your article to be both enlightening and easily understandable. I look forward to read more of your work.

Sincerely,

Tom

Hi Tom,

I’m delighted that you’ve benefited so much from our JOC information.

Surely you must have seen that “FEMALE PERSONAL ASSISTANT” ad in an online dating service.

The ad you found is more than awful – it looks unlawful. If Fordyce founding father Paul Hawkinson were writing this reply, he’d have two words in one for this clueless “employer” — “Hooboy!”

I’d suggest you let that “Busy Executive” know, because he doesn’t know what “busy” really means until he’s hit with an EEOC Notice of Charge of Discrimination. It’s nasty news indeed.

The gender discrimination is only part of the problem. The other prima facie (on its face) violation is “Recent college graduate – no more than 5 years out of college.”

Fortunately no recruiter appears to be involved. How could one be? But this is a great example of what not to do – or even think!

Thanks for sharing it with our JOC readers. It keeps them sharp!

Best regards,

Jeff

If you have a legal question you’d like to have Jeff answer here on The Fordyce Letter, check out Jeff’s On Call! and submit your question.

Editor’s Note: Jeff has covered this topic for us in the past, but as he has said, it needs to be addressed again, and more thoroughly. You can read his original post here for further information.

In the United States, a “draw” (technically known as a non-recoverable draw against commission) is the most common, yet the most misunderstood way of paying a recruiter.

I’ll show you how to get back most of that draw in a minute.  But first, let’s see how the draw arrangement works legally:

A draw is either a loan (temporarily given) or wages (mandatory “can’t-get-it-back” pay for work) depending on whether the recruiter (employee) is still employed at the end of the pay period (a loan) or not (wages).  This “disappearing salary” feature is designed to comply with the minimum wage laws.

The recruiter is given a fixed amount of money at scheduled intervals (the pay period).  Usually all payroll deductions are taken out, so it’s a net amount. 

If the recruiter remains employed for any reason:

The draw is a loan, so when any commissions are due (for however long you agree), the disbursement is made by (1) taking all payroll deductions out of the amount, (2) deducting (subtracting) the amount of all draws paid, then (3) paying the balance to the recruiter.

The legal reason for this arrangement is that you’ve complied with the minimum wage laws by sequentially paying for the work (recruiting, research, etc.) performed.  The physiological reason for this arrangement is that the recruiter must eat regularly to survive.

So if the recruiter stays, you just “disappear” that draw and get it back – just as though you had loaned it to the recruiter.

If the recruiter does not remain employed for any reason:

If the recruiter bails after receiving the draw, it becomes a salary.

It’s a non-recoverable draw.  That’s because once you pay wages, you can’t get them back.  They vest.

Again, you’ve complied with the minimum wage laws.

The best way to legally get a draw back is to actually treat it as a loan.  That means separating the wage portion of the payment from the loan portion by writing separate checks.  You can even charge interest on the loan!

You simply (1) execute (sign) a promissory note (contract to pay the money back), (2) indicate on every separate check that it is a loan, (3) give the recruiter a statement for the amount borrowed at each pay period, and (4) give a separate mandatory minimum wage check for the work (recruiting, research, etc.) performed.

The loan is treated as a totally separate transaction from the pay-for-work wage, so it’s always a gross amount.  However, you then deduct the net amount of the wages already paid from the loan balance.  The recruiter is just giving you his or her paycheck to repay the loan.  It’s legally the same as the recruiter paying his credit card bill.

That’s how to get the draw back in the U.S., and most other countries.  However, the wage laws vary in each country.  Be sure you’re complying with all your state and local laws as well.

May this and my other replies help recruiters around the world to make more placements!

It was introduced in the March 1982 TFL like this:

NEW FEATURE STARTING

Much of our mail confirms the fact that the field of battle upon which we toil is fraught with legal landmines. And who of us hasn’t experienced the frustrations of having to teach our attorneys the basics of our business before they take up the sword in our behalf? Unfortunately, bad advice is the rule rather than the exception when dealing with attorneys who are unfamiliar with the unique character of our business.

With the April issue, we will begin a regular feature entitled “Placements and The Law” authored by Jeffrey G. Allen, B.A., J.D., C.P.C. Jeff, a nationally renowned attorney specializing in placement law, is the senior associate of the offices that bear his name in Beverly Hills and Newport Beach, California. Jeff brings a unique combination of experience to our business, having established, operated, and been a consultant with a number of executive search organizations and general employment agencies. In addition, he has held progressively responsible positions in the personnel and industrial relations field with many major employers.

His columns will bring us a practical and useful approach rather than simply reciting abstract principles of law. As the author of “Placements and The Law Reference Guide,” as a regularly sought-after speaker for all types of groups within our industry, and as one of the recognized authorities in his field, his columns will be as interesting as they are educational.

The body of work that has evolved month after month since then is truly staggering. Through over 300 PTL’s, Jeff’s legal news updates, and his special legal supplements to TFL, our subscribers have learned everything there is to know about placement law.

Today, Jeff is the preeminent attorney in our industry. He has also written more best-selling career books than anyone else in the history of publishing. From Oprah to CNBC, Jeff has appeared in every major media at one time or another.

His credentials, experience and track record transcend his winning legal representation.

Yet he remains our very own accessible, approachable Jeff Allen. A good friend, a trusted advisor, always there, and the ultimate authority on “placements and the law.”

In order to introduce those of you who don’t know Jeff to his work, I decided to do an interview with him and have him share a little about himself.

AH: Is there anything you’d like to say before we start the interview?

JGA: Yes – I’d like to welcome you to the Fordyce family! And I’d like to let our subscribers know how impressed I’ve been with your commitment and desire to keep TFL positioned at the leading edge of the search business. You’ve got the goods to do it. Why don’t you tell the TFL readers why?

AH: Okay. Well, I started off in this industry back in 2002 working in Jon Bartos’ office for about four years as an Internet researcher. When I was hired, one of the first things Jon did was to give me some old issues of The Fordyce Letter from which to learn. So being offered the opportunity to now be the Editor for Fordyce is like everything coming full circle. I am excited to continue on with its rich tradition in the print publication as well as add some new and exciting components, including some neat new stuff to the website. And it’s always a pleasure to meet people in person at the Fordyce Forums. We’re having the next one in Las Vegas next June!

JGA: In working with you, I can already see that you’ll do a terrific job. Again, welcome!

AH: You started writing for TFL shortly after Paul Hawkinson became the publisher. Why do you think the newsletter has been so successful?

JGA: I continued with cutting-edge legal writing, fueled by what we were accomplishing in the success of our subscribers. My friendship with Paul grew along with TFL. We talked by phone almost every day during those early years. He was in St. Louis and I was in LA, but through our business partnership, Search Research Institute, and in our personal dealings, there has never been anything but this great, unbreakable friendship. Anyone who knows Paul understands how flattered I am to call him my best friend.

Now – about TFL.

Paul took Thorne Fordyce III’s little letter and built the publication with three things: rock-solid integrity, unflinching courage, and his amazing desk-up knowledge of contingency-fee recruiting. Every year, he’d go back “in the trenches” and report on his placement travails. It kept him sharp and grounded on what was really happening on Planet Placement.

Commentary, surveys, creative ideas. There were many competitors through the years, but none could match TFL’s investigative reporting, practical training information, and futuristic legal analysis.

AH: So, what exactly is placement law?

JGA: It’s a hybrid between employment, contract and intellectual property law as it relates to the recruiting and hiring process.

As you can see, it’s a function of my background that has formed the discipline.

When a client calls about hiring and firing issues, it’s an employment law matter specific to a placement. If the call is about a collection case, we have a contract/fraud/conspiracy thing going on specific to a placement. If an ex-recruiter uses his or her candidate contact information wrongfully, it’s an intellectual property/trade secrets/unfair competition/fraud/conspiracy/etc. issue specific to a placement.

Analyzing and advising about these things successfully requires a complete understanding of what recruiters do and how they do it. That’s easier said than done, which leads to recruiters paying the law school tuition to the College of Placement Knowledge.

I did placement, I do law. Placement law is what I do because a placement lawyer is who I am.

AH: How did you become a placement attorney?

JGA: I really didn’t plan it that way – it’s what comes from putting one foot in front of another, then looking down and realizing you went from walking to climbing a ladder.

In 1966, we were in the middle of a major recession. I’d just graduated from college in June, and found myself walking the streets of the LA inferno known as the San Fernando Valley, trying to sell klunky, heavy, overpriced Kirby vacuums to whoever had a door. If the soles of my shoes didn’t stick to the welcome mat, I’d enter and start vacuuming the closest mattress.

Then I answered a deceptive ad for a “management consultant trainee”. I had no idea what that was, but it didn’t sound much like vacuum sales. The callback was from an industrial psychologist that did “management consulting.” (Back then, recruiting was considered one step above bank robbing, so “management consulting” was the tag.)

I became a high-biller, then set up and managed a ten-desk office for my boss. I was making technical engineering placements like crazy, but hadn’t a clue what I was jivin’ about. So I interviewed with a high-tech division of Emerson Electric, was hired as an HR rep, caught the eye of corporate, and was on my way. Over the next decade, I became an HR manager with RCA, Whirlpool, Cutler-Hammer, and other major corporations.

As my career progressed, I was fortunate to have great management above me. These international corporations even paid for my night law school education.

Then when I graduated in 1975 and passed the bar exam, the hundreds of recruiters I’d worked with all those years started following me around.

There was some magic back then too. Between HR jobs, I worked a desk for a brilliant fellow who built a large recruiting franchise organization. He had problems with recruiters leaving and unfairly competing.

So I worked closely with his lawyers – teaching them the business as they taught me the law. We won, and won, and won. Then he asked me to write a trade secrets law for our industry. As the president of a trade association, he lobbied for it, and it was passed by the California legislature. Through the years it became known as “The Allen Law”.

Shortly after I started practicing law, my ex-boss came to me with a massive trade secrets case, and we won big. Then Management Recruiters International heard about all of this commotion in Beverly Hills and retained our office to handle a major defection from one of its offices. And we won bigger.

So it went. One success building on the other. One client at a time. Always striving for excellence. A lot like building a recruiting practice – only easier. I call it the “go for what you know” theory of success.

That’s how I became – and how I am – a placement attorney.

AH: What do you mean by the “go for what you know” theory of success?

JGA: My absolute belief is that leveraging some strength is the key to unlimited success. Recruit for jobs that you know and that will become your niche. Find candidates jobs like they had and you’ll place them until they retire.

Look at my background. It’s vertical (except for the vacuum sales). Recruiting, HR managing, more recruiting, writing placement law articles, authoring career books. All traced back to that summer “management consultant” search gig in 1966.

Life’s too short for do-overs. Tomorrow is promised to no one.

AH: You’ve written 24 books for major publishers. How did you become a best-selling author?

JGA: It all started in 1983 when Simon & Schuster asked me to write How to Turn an Interview into a Job.

That was another major recession time, and I was having fun going to TV and radio stations explaining how to nail job interviews. It was helping a lot of people, and I just did it because it worked for them.

I was always fascinated with the sendout-to-offer ratio when I worked a desk. It was always my measure of success. How many sendouts do you need to shake loose one job offer for a candidate. Learn how to lower it, and – Poof! – you’re a search superstar.

So I just converted that into the “interview-to-offer ratio,” and showed the audience what to do in the interview: what to wear, what to eat before arriving, when to arrive, how to greet, what to say, where to sit, how to rap, when to close. I flooded the phone lines on the talk shows and caught the eye of the ABC network. That got me on a national feed across the country and many calls to come back into the studios for more interviewing tips. Listeners were getting offers and calling the station with their success stories.

Then one day, I received a call from the Vice President and Senior Editor of Simon & Schuster. He offered a huge advance (I didn’t even know what an “advance” was), and wanted me on a month-long book tour to kick off How to Turn an Interview into a Job. We wrote the book from my notes. It was an “A” title (meaning S&S put all of its muscle behind it), flew off the shelves, and shot up the charts. I hadn’t even returned from my book tour when my editor approached me with an offer from Parade magazine to write another book, Finding the Right Job at Midlife.

Then a Senior Editor from John Wiley & Sons called me to edit The Employee Termination Handbook. Its success led to many more popular books at the request of Wiley and AMACOM. The three-volume Jeff Allen’s Best series came later as my career books started to become classics.

So when someone asks, “How do you get a book published?,” I answer, “I don’t know.” When he or she asks, “Who’s your agent?,” I answer, “I don’t have one.”

Our industry also knows me by our Search Research Institute references, The Placement Strategy Handbook, Placement Management, The National Placement Law Center Fee Collection Guide (with Case Citations), and The Best of Jeff Allen. (The “BOJA” was a 12-pound present from Paul that arrived on our doorstep one day. I had no idea he’d taken all of my writing for decades and turned it into a two-volume, 1,587-page looseleaf encyclopedia of placement law for the world to have.)

AH: Going back to the beginning of our chat, what do you mean by “the Fordyce family’?

JGA: TFL is much more than a newsletter. It’s a friendship – even with new subscribers – that Paul developed and I share.

I’ll pick up the phone and answer an e-mail after hours. All calls and e-mails are returned the same day. Sometimes late.

I don’t apologize for calling late or early if they don’t apologize for sleeping.

AH: How do you have the time to do everything?

JGA: My personal and professional lives merged the day I took that first JO.

I have a wonderful family who puts up with me, clients who have been with my office since they started recruiting, and jobseekers the world over who benefit from my books.

Some day someone will call for me and my assistant will say, “I’m sorry, Jeff has died.” The reply will be, “That’s okay, but I need him to call me as soon as the funeral’s over!”

It’s just how things work in this crisis law practice.

AH: How do you win cases?

JGA: That’s easy. It’s because psychologically I’m still working a desk.

Of course, knowing the law and having the credentials and a reputation don’t hurt.

I know what it’s like to get stiffed by some employer on a placement fee. Or have some bandit rip off my candidate and client files. Or have some candidate try to ensnare me in a discrimination case.

I get calls from people who are often desperate. Helping them is a calling. Nobody else has the experience and the drive to help them. This isn’t my ego talking. That’s just the way it is. I get in there and get the job done.

I talk to employer lawyers with passion. That’s right – I’m passionate about the case. Very visceral about it. I tear into them if necessary because they have no appreciation for the difficulty and skill required to make placements. No frame of reference.

It’s the same with judges and arbitrators. I explain what the fight’s about, and leave opposing counsel with nothing but hollow legal arguments. I “say and convey” an appreciation for what placers do.

Judges and arbitrators listen, then understand, then rule. It’s all about absolute belief transferred from one human being to another.

I was born and raised around the practice of law. My father was a tough New York street fighter, a hard-as-nails negotiator, and a take-no-prisoners litigator. Later in life, he became an ethics law professor. He taught me a lot of big words too.

Lawyers live in an adversary world, but somehow my love for our people has been returned. Go figure. It’s just so amazing.

“Making a placement” sounds so easy. I’ll tell you what’s easy. Criticizing it.

Don’t get me started – you don’t have enough ink.

AH: What are the big legal issues these days?

JGA: We’re handling more fee collection cases lately.

A contingency-fee recruiter is a “spent check” once the placement is made. Then many don’t know how to collect properly, wait too long, and polarize the dispute. So we jump in and get their money.

Trade secrets cases keep us busy too. I’m asked to serve as the attorney, a consultant or an expert witness.

But the big legal issue today is employer-generated placement fee agreements (PSA’s) . We’ll be covering this in the November TFL. I’ll dissect a model PSA, and show subscribers how to negotiate them effectively. It should be very helpful.

AH: What do you see as the future of placement?

Unlike many others, I don’t see any change from the past. Oh, there may be some new computer-matching software or some short-lived burst of hiring in some field. But there’s a reason it’s called “making a placement.”

Recruiters must make it happen every day – finessing one placement after another. In every discipline. At every age, stage, and wage.

It’s really not a business with trends regardless of the unemployment rate. People will always pay for someone to find them a person who’ll do what they can’t, won’t, or don’t want to do themselves.

The basics of making a placement don’t change either. Cold-calling, a positive approach, consistently doing the basics. A sixth-sense about what clients really want, not just what they say they want. If they even know. And they can’t get it without a recruiter.

That’s why the most effective trainers build from the rudiments: How to take a JO (job order), How to recruit MPC’s (most placeable candidates), How to close a deal.

Those aren’t trends either.

The internet is overrated – both as making recruiting easier and as making it more difficult. It’s just a humungous, inefficient, impersonal matchmaker. A recruiter can never harness it, but can only use it. Possibly effectively, but never as a replacement for the incredible intuition and timing needed to close deals.

So the future of placement is bright. Making placements is the future.

AH: Thanks for sharing so much about yourself today, Jeff. We sure covered a lot of ground. Best wishes for 28 more years with TFL!

JGA: Thanks and thanks too for your graciousness. I know you’ll carry on Paul’s tradition of delivering what recruiters need to know!

Q: This question relates to your October 26 post on Cold Calls & Defining Harassment. Are the rights of companies the same as the individual candidate you mention in this post? I ask in the context of an outside search firm marketing into, or attempting to recruit from, a corporation. Can the company claim they are damaged by receiving a recruiter’s phone calls (i.e., disruption/interference of normal business suffered as a result of calls into the company)?

A: Yes, the rights are basically the same. However, the intensity and the danger is much higher.

These days, it’s tempting for failing businesses to blame anyone they can. Regardless of the real reason (mismanagement, the economy, competition, etc.), losing key employees tends to trip lawsuits against those involved.

Moreover, the massive damages alleged by an employer can be expected to include reduced market share, loss of investor confidence, inability to attract talent, loss of present and future profits, etc. There’s virtually no limit on the amount of a judgment (judge-decided) or verdict (jury-decided) award, since we’re talking about compensatory (to compensate), punitive (to punish), and exemplary (to set an example) damages.

Aside from the invasion of privacy issues (which are personal to a candidate), the inducing breach of contract, interference with contractual relations, and interference with prospective economic advantage intentional tort theories are the same.

This is because the third-party (recruiter) interference allegedly disrupted the bilateral contract between the employer (source) and the employee (candidate). So each party has rights against the interference.

Of course, employers usually have more money, more lawyers, and more politics. So the likelihood of major litigation is higher and so are the stakes.

Many of these lawsuits are filed to simply give nervous management types job security. With litigation pending, they have “cover,” since their claims have credibility. And who’d terminate a key witness? I was fascinated by this move when I was in HR, since we’d have totally useless, highly paid employees doing absolutely nothing for years. They just kept the discovery pot boiling in protracted lawsuits against totally innocent recruiters and competitors. Always talking about terrible misdeeds and huge awards that they never could prove. The lawsuits took on a life of their own and reached old age.

***

To participate in future Q&As, email jeff@placementlaw.com. Keep in mind you should always consult with your own attorney. Nothing
contained herein should be construed as legal advice. It is for your information only.

Q: Given the ease at which recruiters can now find passive candidate information online, when does a cold-call to a candidate at their place of work constitute either harassment or an invasion of privacy (or something else)? Must the candidate declare the solicitation unwanted (as in sexual harassment) for the recruiter to become liable for something? What if the candidate has posted their employment details in the public domain as in Linkedin or Facebook, for example? Do they somehow legally waive the right to be contacted at their place of employment if they upload this information themselves (without a phone number)?

A: “Harassment” is a word used frequently by people who are hassled about anything, at any place, and at any time. But it’s difficult to imagine how a professional contact — or even a series of them by phone, email, express mail, or regular mail — could be deemed so annoying as to rise to that level.

There are no reported cases in the history of American Jurisprudence where a recruiter was even accused of harassment. Who’d bother? If there’s anything a contingency-fee recruiter doesn’t do, it’s waste time with contrary candidates. So if someone stalks an LPC (least placeable candidate), he deserves what he gets.

Now, on to the tort (non-contractual civil wrong) of invasion of privacy.

Liability has developed through case law (court decisions that set precedents) rather than statutory law (legislative enactments). Since each “fact pattern” in each case is different, it’s unclear as to what “invading” someone’s “privacy” really means. So one person’s “invasion” is another’s opportunity. Or both, depending on the whim of the victim.

In attempting to decide objectively whether someone’s privacy was invaded, there are three probes to use:

1. There must be an “unreasonable” interference with the “right to be left alone.”
2. Only an unreasonable interference is “actionable.”
3. What is “unreasonable” depends upon the circumstances (including the express or implied consent of the victim).

You’ve asked about the candidate declaring the solicitation unwanted. This has a tendency to happen only when the source employer finds out. So the appropriate legal defense is some poly-syllabic variation of “Gimme a break!”

The way to get around all of this nonsense is to simply make that cold call, and ask immediately for an after-hours phone number. Home, cell, parole officers’, whatever. If you get one (or even a personal email address), the candidate is estopped (stopped) from asserting that you violated her rights. She impliedly waived them. (A “waiver” is the voluntary relinquishment of a known right. Once waived, you’re estopped from asserting it. Pretty nifty, eh?)

While there are an endless number of ways candidates can impliedly consent to being contacted — from showing their bodies on billboards to stuffing photo-reduced resumes into fortune cookies — these things are not necessary to show consent. Of course, anyone on Linkedin or Facebook wants publicity. Gimme-a-break for sure.

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To participate in future Q&As, email jeff@placementlaw.com. Keep in mind you should always consult with your own attorney. Nothing contained herein should be construed as legal advice. It is for your information only.