Brian,

I have done some of that through the years. Although I doubt that there is a set standard for this type of thing, various people that I talked with early on felt that ten percent of the billings was fair but only for the first year. After one year, no more "commisions" were paid. I have used that approach on more than one occasion.

Rusty Jackson
Rusty Jackson & Associates
Knoxville, TN

-------------- Original message --------------
From: Brian <system.i.lists@xxxxxxxxx>

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.

Regards,

BJ
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