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How to Collect Your Fee: Battling the ‘Employee Referral’ Claim

by | Feb 20, 2012 | Recruiter Training, Top Echelon Blog

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:

“The hire was through an employee referral.”

How the Client Pays:

Employee referrals are among the easiest and most common fee-avoidance moves.

Here’s the safest way that companies do it:

1. Select the candidate they want to hire.

2. Introduce them to an employee (preferably someone they could have known).

3. Ask the employee to “recommend” them.

4. Tell the candidate that the employee’s recommendation was the reason for the offer.

5. Tell the candidate that they shouldn’t be talking to that haunting headhunter.

If the client is just a little unsavory, the employee file can be filled with the following:

1. A back-dated reference letter from the cooperative co-worker.

2. A back-dated, back-datestamped, back-stabbing application with the co-worker’s name as the source of the contact.

3. A thank-you letter and copy of an employee referral check (“bounty”).

What can you do about it?  Haunt that candidate like you hunted them.  Write confirming letters about the results of interviews to the hiring authority.

You’re on the outside looking in.  Make monster faces in the window.  Force your way into the process to make that hire a placement.

Clients get spooked.  They p-a-y!

(Know how to collect your well-earned fees?  Test yourself!  Visit 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

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