Jeff On Call: Does Arranging Interview = Placement Fee?

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Q: Does arranging the interview mean I am entitled to the placement fee?

A: It’s usually better than just sending a resume.

Legally, it’s the same (a “referral”), but factually it’s better because there’s often some evidence that you were involved. Proof that you did something to actually cause the hire can be used to budge a judge.

This is probably a good time for us to dissect the placement process.

When is your fee earned?

Cold Call – Solicit Job Order – Verbally Confirm Fee – Send Fee Schedule –
Receive Written Confirmation of Receipt of Fee Schedule – Receive Verbal
Agreement to Written Fee Schedule – Receive Signed Fee Schedule – Present Candidate – Arrange Interview – Request to Check References – Assist with Offer – Receive Offer Letter – Receive Notification of Acceptance – Candidate Starts – Invoice Sent – Guarantee Period Expires

You can see that “Arrange Interview” is still very far behind the finish line. All of the steps are really links in the causal chain — the chain of causation — starting with the presentation and ending with the start date.

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Let me share the ultimate contingency-fee secret with you: There’s only one thing necessary for you to be entitled to a full fee. It is “identify,” but be sure you can prove it in writing.

In its most rudimentary form, a placement fee is simply a “finder’s fee.” An agreement to pay and communication of a name and contact information are legally sufficient.

They can scream about “a five-figure fee for a phone call” until the bailiff escorts them out the courtroom door.

Judgment for the Plaintiff. Plus interest, attorney’s fee, and costs.

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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2 Comments on “Jeff On Call: Does Arranging Interview = Placement Fee?

  1. Jeff, great post; however, as is so often the case with law, it’s not whether you are right or wrong, but if you can afford to prove it. While you may ultimately be entitled to the fee, the organization is probably betting on the fact that the costs associated with collection will be too much for you to bear – even if you win. Or, they’ll offer to negotiate a reduced fee. In either case, it’s an uphill battle.

  2. Brenden,

    The way to eliminate ALL these worries is to write a strong contract and never lift a finger for a company until they sign it. Put a “loser pays legal fees and expenses” clause into the contract. That way a company can’t run up your legal bills but rather will run up their own legal bills by double. Obviously, you will only want to file a legal action if you’re pretty certain you’re going to win. So write tight contract and as a matter of practice always maintain strong documentation.

    Your contact should be a “living document”. Anytime that it gets tested or you notice a hole in it you should tweak it so that over time it will become impenetrable. When I hear the excuse “my clients won’t sign a contract”; the first thing that comes to mind is that you were too timid to ask. Also, if they won’t sign your contract then they aren’t your client. You’re going to be busting your hump for them and without a contract you’ve left it up to them whether to pay you or not. Without a contract, you might be able to win a difficult and expensive legal case but things are very hard to prove in a “he said she said and when” especially when one of the parties might be prone to lying.

    As for PSA’s, I used to just walk away from them but over the years I’ve learned that companies are often willing to alter them even to a great degree. I’ve had a few companies even agree to cut and paste my entire contract into PSA.

    The bottom line is that to do our work you need a strong contract which is mutually protective of both the client and the recruiter. If a company is unwilling to work with that than alarm bells should be going off in your head. Your time is far better spent finding another “client” to work with. Let the next guy leave himself open to “taking it in the shorts”.

    Tom Keoughan
    http://www.toyjobs.com

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