This is not uncommon. Just make sure that you let him know that you will
issue him a 1099 for his finder's fees.
[mailto:consult400-bounces@xxxxxxxxxxxx] On Behalf Of Brian
Sent: Wednesday, November 28, 2007 11:58 AM
To: Consulting on the iSeries / AS400
Subject: [Consult400] Compensation for Referrals
I would like to hear some opinions regarding compensation for referrals.
A former IBM Business Partner I used to occasionally work with on a 1099
basis has contacted me with an immediate opportunity to provide services to
one of his clients. He wants to turn over complete control of the account to
me and in exchange he wants me to pay him a flat rate for each hour I bill
to the client. This flat rate equates to about 12% of the hourly rate that
will be billed to the client and stays the same regardless of the number of
hours billed. He's also offered to do this with his other clients when/if
they have a need for services. I can accept these terms but I have no
experience with an arrangement of this nature so my first question is does
this seem fair to both parties? Is this the customary way for handling this
type of referral or are there better alternatives?
Feel free to contact me off-list.
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