I have been watching the responses. I do have to be honest that some people simply don't understand the consulting business. I make these deals all the time and they are wonderful to me and to the referrer.
I will pay for as long as the person is on billing but only upon collection of funds and will pay for every billable hour. When I write the check to the referrer I put a big smiley face on it.
I will also pay him for additional business resulting from the original placement. If not for the referral I would never have done any business with this client. I win no matter what.
Insofar as what is fair and what is appropriate depends on how you value referrals. To me referrals are golden so I always encourage continuous involvement with me and gladly pay for the referral fee.
Commissions are like a vegematic, you can slice 'em and dice 'em every which way as long as they are fair to both parties.
By all means REFER!!!
ProStar Partners, Inc.
Executive Search and Consulting
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----- Original Message -----
To: Consulting on the iSeries / AS400
Sent: Wednesday, November 28, 2007 12:57 PM
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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