Fee Leverage

August 28, 2009

A guy named Douglas in another forum brings up the argument that we sometimes hear from clients that they should pay less for a candidate we already have.

Douglas, you only lose fee leverage when you give it away. There are those who would and even should castigate my firm for doing work at 25% and only 25%. It’s a fair price and we just decided to live with it even years before I started this firm in 2002. Our reasoning goes like this. It is 25% or it is free. It is not 30 it is not 20, it is not 24… it is 25% period. If I do a search it is 25% with an engagement fee. I don’t do heavy lifting unless I am paid to.

If I have the candidate it is 25% and you don’t get contact info on the candidate until /unless we sign our separate contingent agreement which is ONLY for that single person.

Sure…the search is done. If this is someone your company needs then you should consider it a bargain that it is already done and you can hire the candidate now.

Their spurious argument that you evidently buy into that it is worth less because you already have it is one I am happy to walk away from.

Just keep doing this over and over in the same space with good candidates every time and you’ll be come known as the people who won’t mess with them on pricing or be messed with on pricing. They all end up appreciating that once they’re a client no one else gets a better deal than they do.

No, this isn’t the only way that works but I think it is the only way I’ll ever do it anymore.

The truth works so well that I am going to copy this to the blog my clients sometimes read as well. Thanks for bringing it up!

P.S. Our engaged clients sometimes do get candidates for free that others would charge for. I hope that’s one of the things that helps us keep them for years once we get together.

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