Hi Jeff,
You are such a great help to us in figuring out what to do! Thank you for sharing your wisdom and experience.
I just placed a candidate with a large software company. I sent my standard placement agreement (25% fee) to HR but they did not sign it.
The HR person told me that we would get something processed if the candidate proceeded into the interview process.
The candidate then proceeded all the way through the process (in spite of HR stalling the paperwork), and just accepted the company’s offer of a base salary of $160k (plus another $40k in bonuses). At our standard fee of 25% of first year salary, it would be $50k.
They are offering a $10k finder’s fee. Do I have a case, since no agreement was signed?
Thanks,
Michael R. Porter President CNNIHi Michael,
Great hearing from you and to learn that you’re learning from us!
Unsigned fee schedules are perfectly legal, but don’t use a signature line for the employer. If you do, the employer lawyer’s rap will be, “If we’d agreed, we would have signed.” Translation: “No sale.”
The big issue with an unsigned fee schedule isn’t its efficacy (validity), it’s proving it was received. Anything can be in that envelope, and email delivery can fail. Then you still have to prove it was accepted.
Verbally? Translation: “No sale.”
The technique you’re describing is called “running with an MPC” (cold-calling or emailing with a most placeable candidate). As you just discovered, it’s risky. But it’s rewardy if you know how to protect yourself. In fact, it’s how I became a high-biller when I was still a rookie.
For more on this subject,
I’ll send you the “Why High Billers Are Why Billers” article that originally appeared on the front page of the August 2011 issue of The Fordyce Letter. Since its publication, more copies have been requested and posted in offices worldwide than any other non-legal article I’ve ever written.
If sending a resume alone could get you paid, I’d still be working a desk. I would have spent my 39 placement lawyer years perfecting the ultimate electronic resume delivery system.
As you pointed out, sending an “open” resume (with contact information) these days invites fee avoidance. An unsigned fee schedule isn’t much help unless receipt and acceptance can be established. In writing.
Far too many recruiters send these “runaway resumes” that give away their candidate inventory. That should stop today.
In the situation you described, acting on essentially unsolicited resumes can be an implied acceptance of liability for a placement fee. Even if the human resourcer had said the employer wouldn’t pay a fee, the employer can be deemed to waive (relinquish) its known right to accept this valuable gift from you. The law reflects the reality that “Actions speak louder than words.”
But that usually means a feefight (as you’re now facing), and the outcome is far from certain. Who needs that when I’m about to show you how to avoid it?
Before I do, let’s get smart:
Chronologically, the typical sendout process looks like this:
That’s why so many recruiters don’t get their well-earned fees. They (5) “Identify candidate” before they (6) “Get client response.” It’s “Ready, Fire, Aim,” so they shoot their five-figure fee foot.
By simply reversing items 5 and 6, “Present candidate” is followed by “Get client response” (always positive, or you never get to) “Identify candidate”.
Paid recruiters use our client clincher as a wedge when they have the highest leverage. That is, after you have a positive response, but before you’ve identified a candidate. You obtain interest and then write (by e-mail or fax) the client clincher. More on this after we set up the sendout process properly.
Your question concerns a referral by resume. Legally, it’s the same as calling the client. In either case, a presentation. Fine. But you absolutely do not identify the candidate at that time.
Let’s do each type of presentation the right way.
You always send a “blind” resume by email, fax or regular mail. That means on every resume, you delete the name, address, phone, fax and email address of the candidate. You also delete the current employer and any other identifying items on the resume. Then code the resume with a reference number.
Include the following statement at the top of the resume:
This candidate is being presented by (name of your business) for a suitable job opening with your company. Please contact (your name) at (your phone numbers or your email address) should you wish to discuss the candidate further or arrange an interview. Thank you.
Then when the client calls back, the conversation goes like this:
Hirem: Hi, Michael! What’s the name of candidate CR-2304?
Michael: Hi, Hirem! I’m going to email you his name along with his contact information as soon as we’re through discussing his background.
Hirem: Okay, but what if we’re already considering him?
Michael: If you are, he doesn’t know it. But why don’t we agree that you’ll email me the date of any prior contact, and with whom within one business day from receipt of the resume? Fair enough?
Hirem: Don’t you trust me?
Michael: Absolutely! That’s why I’ll reveal the identity and contact information so you can verify he’s not in the pipeline.
Hirem: Fine. What’s his background?
When you’re presenting a candidate by phone, the conversation is almost the same:
Michael: Hi, Hirem! I’d like to discuss the background of a candidate we just recruited for the (name of position) opening.
Hirem: Hi, Paul! Great – what’s his name?
Michael: I’m going to email you his name along with his contact information on his resume as soon as we’ve established mutual interest.
Hirem: Okay, but what if we’re already considering him?
Michael: If you are, he doesn’t know it. But why don’t we agree that you’ll email me the date of any prior contact and with whom within one business day from receipt of the resume? Fair enough?
Hirem: Don’t you trust me?
Michael: Absolutely! That’s why I’ll reveal the identity and contact information so you can verify he’s not in the pipeline.
Hirem: Fine. What’s his background?
Then you send the “open” resume as an email (or fax) attachment. In the body of the email (or fax cover sheet), you include the client clincher:
As we agreed by phone today, the attached resume is being sent to you with the understanding that you will notify me by a return e-mail within one business day from today if (name of candidate) has already been contacted by (name of client) about the (name of position) opening. This will include the date of any prior contact, and the name and title of the (name of client) employee who contacted him.
If I don’t receive the notification, a placement fee will be due to (name of your business) in the event (name of client) hires (name of candidate) within one year from the date of our last communication regarding him.
I know this sounds tough, but truly you’re not dealing with a “client.” You’re dealing with a complete stranger – particularly if you’re “running with an MPC.” If it’s an employer that you trust, you can soften the wording.
The important thing is that you don’t reveal identity and contact information on a candidate until you have the prior contact promise in writing. That will be fulfilling your promise to yourself:
Thanks again for this important inquiry, Michael.
May you client clinch every candidate presentation that results in a hire!
Best always,
Jeff
