Avoid the Fight and Get Your Fee When You Reorder Your Sendout Process

Hi Jeff,

You are such a great help to us in figuring out what to do! Thank you for sharing your wisdom and experience.

I just placed a candidate with a large software company. I sent my standard placement agreement (25% fee) to HR but they did not sign it.

The HR person told me that we would get something processed if the candidate proceeded into the interview process.

The candidate then proceeded all the way through the process (in spite of HR stalling the paperwork), and just accepted the company’s offer of a base salary of $160k (plus another $40k in bonuses). At our standard fee of 25% of first year salary, it would be $50k.

They are offering a $10k finder’s fee. Do I have a case, since no agreement was signed?

Thanks,

Michael R. Porter
President
CNNI
 

Agree First, Then Send Candidate Info

Hi Michael,

Great hearing from you and to learn that you’re learning from us!

Unsigned fee schedules are perfectly legal, but don’t use a signature line for the employer. If you do, the employer lawyer’s rap will be, “If we’d agreed, we would have signed.” Translation: “No sale.”

The big issue with an unsigned fee schedule isn’t its efficacy (validity), it’s proving it was received. Anything can be in that envelope, and email delivery can fail. Then you still have to prove it was accepted.

Verbally? Translation: “No sale.”

The technique you’re describing is called “running with an MPC” (cold-calling or emailing with a most placeable candidate). As you just discovered, it’s risky. But it’s rewardy if you know how to protect yourself. In fact, it’s how I became a high-biller when I was still a rookie.

For more on this subject,

  • Go to www.placementlaw.com.Jeff allen ribbon
  • Click the red JEFF’S ON CALL! button.
  • Type “Reprint of Why Biller Article” in the subject field.
  • Click send.

I’ll send you the “Why High Billers Are Why Billers” article that originally appeared on the front page of the August 2011 issue of The Fordyce Letter. Since its publication, more copies have been requested and posted in offices worldwide than any other non-legal article I’ve ever written.

If sending a resume alone could get you paid, I’d still be working a desk. I would have spent my 39 placement lawyer years perfecting the ultimate electronic resume delivery system.

No More Open Resumes

As you pointed out, sending an “open” resume (with contact information) these days invites fee avoidance. An unsigned fee schedule isn’t much help unless receipt and acceptance can be established. In writing.

Far too many recruiters send these “runaway resumes” that give away their candidate inventory. That should stop today.

In the situation you described, acting on essentially unsolicited resumes can be an implied acceptance of liability for a placement fee. Even if the human resourcer had said the employer wouldn’t pay a fee, the employer can be deemed to waive (relinquish) its known right to accept this valuable gift from you. The law reflects the reality that “Actions speak louder than words.”

But that usually means a feefight (as you’re now facing), and the outcome is far from certain. Who needs that when I’m about to show you how to avoid it?

Before I do, let’s get smart:

  • Go to www.placementlaw.com.
  • Click the Placement Fee Collection Quiz button on the bottom row.
  • Take the PFCQ.
  • Click the Placement Law Language Quiz button on the bottom row.
  • Take the PLLQ.
  • Click the Answers to Placement Law Quizzes button on the bottom row.
  • Grade yourself on the PFCQ and PLLQ.

The Typical Sendout Chronology

Chronologically, the typical sendout process looks like this:

  1. Take job order
  2. Send fee schedule
  3. Recruit candidate
  4. Present candidate
  5. Identify candidate
  6. Get client response

That’s why so many recruiters don’t get their well-earned fees. They (5) “Identify candidate” before they (6) “Get client response.” It’s “Ready, Fire, Aim,” so they shoot their five-figure fee foot.

By simply reversing items 5 and 6, “Present candidate” is followed by “Get client response” (always positive, or you never get to) “Identify candidate”.

Paid recruiters use our client clincher as a wedge when they have the highest leverage. That is, after you have a positive response, but before you’ve identified a candidate. You obtain interest and then write (by e-mail or fax) the client clincher. More on this after we set up the sendout process properly.

Your question concerns a referral by resume. Legally, it’s the same as calling the client. In either case, a presentation. Fine. But you absolutely do not identify the candidate at that time.

Let’s do each type of presentation the right way.

Emailing A Resume

You always send a “blind” resume by email, fax or regular mail. That means on every resume, you delete the name, address, phone, fax and email address of the candidate. You also delete the current employer and any other identifying items on the resume. Then code the resume with a reference number.

Include the following statement at the top of the resume:

This candidate is being presented by (name of your business) for a suitable job opening with your company. Please contact (your name) at (your phone numbers or your email address) should you wish to discuss the candidate further or arrange an interview. Thank you.

Then when the client calls back, the conversation goes like this:

Hirem: Hi, Michael! What’s the name of candidate CR-2304?

Michael: Hi, Hirem! I’m going to email you his name along with his contact information as soon as we’re through discussing his background.

Hirem: Okay, but what if we’re already considering him?

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Michael: If you are, he doesn’t know it. But why don’t we agree that you’ll email me the date of any prior contact, and with whom within one business day from receipt of the resume? Fair enough?

Hirem: Don’t you trust me?

Michael: Absolutely! That’s why I’ll reveal the identity and contact information so you can verify he’s not in the pipeline.

Hirem: Fine. What’s his background?

When you’re presenting a candidate by phone, the conversation is almost the same:

Calling A Client

Michael: Hi, Hirem! I’d like to discuss the background of a candidate we just recruited for the (name of position) opening.

Hirem: Hi, Paul! Great – what’s his name?

Michael: I’m going to email you his name along with his contact information on his resume as soon as we’ve established mutual interest.

Hirem: Okay, but what if we’re already considering him?

Michael: If you are, he doesn’t know it. But why don’t we agree that you’ll email me the date of any prior contact and with whom within one business day from receipt of the resume? Fair enough?

Hirem: Don’t you trust me?

Michael: Absolutely! That’s why I’ll reveal the identity and contact information so you can verify he’s not in the pipeline.

Hirem: Fine. What’s his background?

The Client Clincher

Then you send the “open” resume as an email (or fax) attachment. In the body of the email (or fax cover sheet), you include the client clincher:

As we agreed by phone today, the attached resume is being sent to you with the understanding that you will notify me by a return e-mail within one business day from today if (name of candidate) has already been contacted by (name of client) about the (name of position) opening. This will include the date of any prior contact, and the name and title of the (name of client) employee who contacted him.

If I don’t receive the notification, a placement fee will be due to (name of your business) in the event (name of client) hires (name of candidate) within one year from the date of our last communication regarding him.

I know this sounds tough, but truly you’re not dealing with a “client.” You’re dealing with a complete stranger – particularly if you’re “running with an MPC.” If it’s an employer that you trust, you can soften the wording.

The important thing is that you don’t reveal identity and contact information on a candidate until you have the prior contact promise in writing. That will be fulfilling your promise to yourself:

No more runaway resumes.

Thanks again for this important inquiry, Michael.

May you client clinch every candidate presentation that results in a hire!

Best always,

Jeff

 

More than thirty-five years ago, Jeffrey G. Allen, J.D., C.P.C. turned a decade of recruiting and human resources management into the legal specialty of placement law. Since 1975, Jeff has collected more placement fees, litigated more trade secrets cases, and assisted more placement practitioners than anyone else. From individuals to multinational corporations in every phase of staffing, his name is synonymous with competent legal representation. Jeff holds four certifications in placement and is the author of 24 popular books in the career field, including bestsellers How to Turn an Interview into a Job, The Complete Q&A Job Interview Book and the revolutionary Instant Interviews. As the world?s leading placement lawyer, Jeff?s experience includes: Thirty-five years of law practice specializing in representation of staffing businesses and practitioners; Author of ?The Allen Law?--the only placement information trade secrets law in the United States; Expert witness on employment and placement matters; Recruiter and staffing service office manager; Human resources manager for major employers; Certified Personnel Consultant, Certified Placement Counselor, Certified Employment Specialist and Certified Search Specialist designations; Cofounder of the national Certified Search Specialist program; Special Advisor to the American Employment Association; General Counsel to the California Association of Personnel Consultants (honorary lifetime membership conferred); Founder and Director of the National Placement Law Center; Recipient of the Staffing Industry Lifetime Achievement Award; Advisor to national, regional and state trade associations on legal, ethics and legislative matters; Author of The Placement Strategy Handbook, Placement Management, The National Placement Law Center Fee Collection Guide and The Best of Jeff Allen, published by Search Research Institute exclusively for the staffing industry; and Producer of the EMPLAW Audio Series on employment law matters. Email him at jeff@placementlaw.com.

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1 Comment on “Avoid the Fight and Get Your Fee When You Reorder Your Sendout Process

  1. Personally, Jeff’s comments above sound like a lot of guff.

    Obviously, there was a “working relationship” with HR (in the case cited above in the article) if the Client accepted the resume and then said that they would ‘process something’ if the candidate proceeded to interview. Not processing ‘something’ in this situation would be defalcation on a verbal commitment… evidence of ‘bad faith’.

    Signing of a contract is not the only crucial factor. Similarly, demonstration of a ‘working relationship’ is also important. Also, verbal agreements must be considered as relevant to the case. If Kim Basinger lost $8 million dollars for violating a verbal contract, then why aren’t recruiters with more intelligence and rectitude than her accorded with similar respect by the law?

    I remember a case Jeff Allen worked on for my firm, which was a $60K fee that the client balked at paying. We asked Jeff to intermediate the case, and he charged a 40% fee for his ‘services’, while settling the case (without our permission).

    My CEO and President (at the time) both expressed that they had never heard of any attorney doing such a thing, without clients’ permission…. then Jeff sent us the check for $8000, leaving $12,000 (one-fifth the fee) for my reward. We were not pleased.

    I was not the only disappointed person. The client’s CEO (who refused to sign the contract) was fired by his Board of Directors within a year (for malfeasance), and the candidate I placed, (whom I had placed twice previously, for much larger fees) came back to me a decade later, saying he couldn’t believe what poor work Jeff had done to fail to achieve a fair settlement.

    Then, my candidate gave me two retainers to fill, and a $4000 ‘tip’ for services I had not yet provided, in an effort to compensate for Jeff’s apparently lazy work.
    So… I am one of those people who definitely is impressed with Jeff’s literary talent, and the fact that he is a prolific author, but I am still unconvinced with his work as an attorney in the world of ‘placement law’.

    I wish I could say otherwise, but I can’t. I personally have had better results with other attorneys who aren’t specialists in ‘placement law’, so I remain skeptical, even though I have read some of Jeff’s published writing, and found it quite thoughtful.

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