Welcome to our ongoing series of blog posts in the Top Echelon Recruiter Training Center: “Jeff Allen’s Collection Tip of the Week.” Each week, we’ll highlight one collection tip from Allen, JD/CPC, the world’s leading placement lawyer.
Since 1975, Allen has collected more placement fees, litigated more trade secret cases, and assisted more placement practitioners than anyone else. He’s also the author of 24 books and a regular columnist for The Fordyce Letter, one of the leading publications in the recruiting industry.
Below is this week’s collection tip for recruiters, courtesy of Jeff Allen.
What the Client Says:
“We’ll pay you that percentage of the candidate’s first monthly paycheck.”
How the Client Pays:
Check your fee schedule or the client’s PSA (placement service agreement). Watch for references to the following:
1. A 30-day guarantee. Even a clearly-stated replacement guarantee can backfire if the fee is not unequivocally based on projected first-year compensation.
2. Re-billing after a month. Anticipating an additional fee based on actual compensation after the candidate is employed for 30 days is inviting a 30-day period for computation.
3. Jobs where fees are customarily charged on a monthly basis. Office support, industrial, and other support occupations shouldn’t be identified on the fee schedule.
4. A temporary fee tied to the first 30 days. That will likely be all you’ll receive.
5. Invoices being payable within 30 days. Payment terms don’t belong on a fee schedule. They belong on an invoice after a placement is made. Even “Net 30 Days,” discount terms, or monthly service charges should be carefully separated from the fee schedule terms.
When there’s an ambiguity in a document, it’s construed (interpreted) against the party who created it. As if that weren’t enough, you have “the burden of proof by a preponderance of the evidence.”
Annualized fees will be due if you just remove anything 30-days or monthly from your documents!
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(Know how to collect your well-earned fees? Test yourself! Visit Jeff Allen’s Placement Law website and click the “Placement Fee Collection Quiz” button. Allen can be reached via telephone at 310.559.6000 or via email at jeff@placementlaw.com.)