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What to Do When Companies Claim ‘We Don’t Pay Fees’

by | Nov 17, 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 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 don’t pay fees.”

How the Client Pays:

Sometimes it’s for “certain positions,” sometimes it’s not.  Sometimes it’s “company policy,” sometimes it’s personal preference.  Sometimes it’s in writing, sometimes it’s not.  Sometimes it’s a low-fee ceiling, sometimes it’s a no-fee floor.

But always, any such notice must be communicated in advance.  That means prior to the referral.

How can you be bound by a policy you don’t know?  A sign that wasn’t there?  This is called the objective theory of contracts.

What would a reasonable recruiter in your position think if the fee was “cleared” (whatever that means)?  The client’s undisclosed intent is irrelevant.

You must be prepared to show when and how you cleared that fee.  You must be able to rap nonstop for 10 minutes about it, and back up your words with business records written at or near the time.

Anything showing receipt of the fee schedule is good.  Anything showing acceptance of it is great.

These things meet your burden of proof as the plaintiff.  Then the burden shifts to the client as the defendant.  Can it prove that a written, rigid, no-fee policy has been communicated?

Of course not!  That means a full five-figure fee—forthwith!

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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

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