Q: I’m trying to collect a placement fee using the “but for rule”, and the client is just coming up with more excuses to avoid payment. Would you please explain what the rule is, and how it works?
A: So sorry you’re getting ensnared in this “but for rule” business. It’s really the “but for EXCEPTION,” and just educates fee-avoiding clients so they get better at their game. This polarizes the dispute and translates into “No Sale.”
So I’m going to take longer than usual with the answer. Hopefully, for once and for all, we’ll lay this “rule” to rest.
The “rule” itself is easy to state: “But for your referral, would the candidate have been hired?”
If you’ve never made a placement, this sounds reasonable enough. You think making placements is like bowling. You pick up the ball (candidate), roll it down the alley, and make a strike (a hire). Nobody argues with that.
But if you’ve ever worked a desk, you know that making placements is far more like pinball. You pull the plunger, shoot the ball, work the flippers, watch as it rolls around and hits the big bumper (and lights up – an interview!), rolls, spins, ricochets, delays, slides, and takes twists and turns like no other play you’ve ever made.
You watch from the outside-in as these events take place, and eventually the ball reaches the jackpot (a hire).
Legally, each one of those bumps, rolls, spins, ricochets, delays, slides, twists, and turns is called an intervening act. Simple enough. Something that happens after you shoot the ball.
Not so fast. There are two types of intervening acts.
A dependent intervening act is one caused by you. Pulling the plunger or working the flippers. Everything between that and the jackpot is a causation question. Was hitting the big bumper (an interview) caused by you? If it was caused by a ricochet (let’s say an employee referral), the client’s argument is that it was an independent intervening act; it had nothing to do with you. The turncoat candidate and client agree. There may even be a document trail that “substantiates” this.
No sale. So someone tells you about the “but for rule.” Yeah, that’s it!
You say, “But for me pulling the plunger, the ball would have never been on the playing field.”
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It’s an open invitation for a fee-avoiding client to set up a variety of factual defenses. “But for” the candidate meeting someone from the client at a trade show, “but for” the resume already in the client’s data base, “but for” your failure to obtain the candidate’s consent to the referral, “but for” the employee referrer convincing the candidate to interview, and an infinite number of other ” but-for bumpers” that will have you flipping your five-figure fee into the forest.
If you haven’t already blown this fee, you absolutely must not use the linear “but for rule!” Placements in the real world (unlike bowling) don’t occur in a straight line. Just think of all the intervening acts that occurred after your sendout that an employer lawyer will say were independent of that referral!
I cover this in detail in Chapter 23 of The National Placement Law Center Fee Collection Guide, entitled “But For, But If, What Then?” It is followed by Chapter 24, entitled “The ‘Substantial Cause’ Test.
Even though you’ve been giving away your fee, try using my fee-getting, legal-sounding, poly-syllabic phrase: substantial cause.
Just say, “My referral was a substantial cause of the hire!”
It gets recruiters paid like crazy, because it’s impossible to argue that you didn’t plunge and flip.
Pinball, not bowling.
Best of luck to you!