Anyone have any suggestions on collecting from an unruly client who signed an "exclusive" agreement but then hired on their own and refuses to pay? Any thoughts and comments? Ken

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Have you tried calling their legal dept? If not you may want to. I have had things like this happen before. The clients legal dept took one look at the contract and cut me my check. Just a thought.

Also, this may not matter but what position was this person for? COO, CFO, software programmer etc? There may ab a strategy you can use depending
if the contract specifically states you earn a fee when the position is filled - regardless of who fills it then you have a good case- exclusivity is a good contract word to ensure you and only you are working on it - but does not necessarily mean they have to pay you- rework your contract if it doesnt discuss how they need to pay you- if in fact it does describe how they need to pay you- send them an attorneys letter putting them on notice and see what happens- often when they see you are serious and that you refuse to negate your own contract ,they will pay or offer a deal. that letter should not be expensive to have written by your atty-- i can say it has worked for me - but my contract is very solid- another option is get the directory and raid the place and be sure to call his/ her assistant every few weeks to remind him of what a low life he is- what goes around...,
Ken- I am assuming you are working with the Managing Partner of the firm? If not go to the top person and suggest a confernce call to work out the proper resolution. If they have a BOD consider this outlet. As a fall back if you have a blog in your space you might describe the problem and suggest the improper behavior in such a fashion that who ever reads can figure out who the offending party is. The negative press might make them realize that this info could harm their reputation. In addition it could spring a competitor to want to use you going forward knowing you know their people.

The over riding issue is that you want them to realize they can't win in the long rujn to allienate a top producing professional in their space! Good Luck going forward.
Your contract is your 'letter of marque and reprisal'. It says what you can and can't do, as well as what support, if any you will get from the king/the country/ the company that agrees to it and signs it.

If your the one who wrote the damned thing, why is it you don't know whats in it? If it says that all people hired from this date forward are to be vetted by your company, even if they are directly hired by the client and/or that your firm is the exclusive recruiting firm it's your contact and that regardless of how that individual was brought into the company...you get paid.

It doesn't matter if your a retained recruitment agency, retained placement agency, retained outplacement agency, contingency agency, you have to know what is in your contact because it spells out how you can operate.

The amount of the 'retainer' is insignificant, everyone requires a retainer. What is a 1 million dollar retainer to the likes of Microsoft, Ford, BMW, British Petroleum? Nothing. The vast majority of businesses globally are SME's and of course they aren't going to pay out that much for a retainer and obviously retainer agencies aren't going to be interested in those businesses. When they reach the right size, then they are 'of interest'.

Retainer and contingency agencies are the same. Its just that retainer agencies have more pirate ships in more seas than contingency agencies. Boutique retainer agencies are specialized thieves like art thieves and corporate raiders. They are only going to go after specific targets of opportunity, but then again if you chase after every ship......
Once you have had time to realize that your not getting paid then you need to decide if you still want to do business with them. If so you need to make the best of a bad situation.

I would then talk to my top contact at the firm and explain how you have been beat out of your commision
but that you still want to do business them and your not going to make an issue out of it. I'd also ask him to arrange a meeting with the person who decided you shouldn't be paid.

Then I would meet the person who caused the problem and before they open their mouth tell them you don't want to be paid BUT that you want future exclusives based on terms that everyone understands and agrees with.

I know it hurts BUT finding customers who are hiring these days is probably harder then turning this account
around.
Putting it on this blog is a great Idea, it will and has made you feel better. You have been given some good advice, know exactly what your contract says, if your not happy with it, change it but you wont get what you want and thats the money. Your bound by the contract as much as they are. You know that complaining about not getting paid will make you look bad, going over they contacts head will mean when the contract is up, your out.

So put on a happy face, visit your candidates, get their internal phone lists, develop your spy in the company, rewrite your contract for next time, fill as many posts as you can during your contract. If there is no new contract, pick them clean.

Never, Ever, eVeR put anything like this on your or your company's blog. You NEVER have clients like this. Putting it here is fine, we never have clients like this either (BS!!!).

It wont do you any good to whine about not getting paid. The one thing you might try is to meet with the powers that be over a couple of drinks, just to check up with them on how your doing. In an informal way of course. During your chat over your second or third single malt, you can dance around the issue and find out why they didn't pay. Don't argue and whine, just keep it light. Remember if your not the one who is taking their money....one of us will gladly be there. With a tighter contract of course.
This is an awesome discussion! I will get paid, but at the cost of a client....BUT I decided not to work with them the moment they emailed me and told me the role they hired me to fill was filled on their own, after blowing me off and lying to me about why for two weeks. This is one of those instances where if I had followed my own rules; 1 - not working with CPA firms, 2 - not working until they pay the retainer, and 3 - recognizing a bad search for what it was and accepting it and moving on. The discussion here was not only for my benefit, but for the benefit of others who have not encountered this scenario (I have been doing this for 12+ years, but all that says is I should have known better).

Bottom line, my contract says I will get paid, regardless of the source of the hired candidate. BUT......the legal costs would far outpace the fee fairly quickly. 1 - they are an out of state client, most likely jurisdiction would fall in their state, Hunt Valley, MD; 2 - the Partner heading up HR is a former attorney, and 3 - the Managing Partner is a former Partner at Arthur Anderson (fight for every stingy penny and even half a penny). So the gold I am taking away from this discussion here is one of being creative (BOD discussions, etc.), being a pirate (cleaning house for them), and sticking by my guns on collecting the retainer up front regardless of how strong the contract language is. Maybe I will file in small claims court and get at least the $5k max limit (less a third of the fee of $16.5k but probably more than if I took it to Superior Civil Court, small based on our averages, another red flag I should have listened to). Any more thoughts?
Don't bother with all that. Take your money and move on. Going to small claims court will take time away from making real money and give them opportunity to smear your reputation to their friends and contacts for being a greedy pirate.

Your job is to find decent clients and work with them for their benefit. When you run into cheats, liars, vampires and slavers make contact with some of the primary candidates you typically place for future postings and move on.

Ken DeWitt said:
This is an awesome discussion! I will get paid, but at the cost of a client....BUT I decided not to work with them the moment they emailed me and told me the role they hired me to fill was filled on their own, after blowing me off and lying to me about why for two weeks. This is one of those instances where if I had followed my own rules; 1 - not working with CPA firms, 2 - not working until they pay the retainer, and 3 - recognizing a bad search for what it was and accepting it and moving on. The discussion here was not only for my benefit, but for the benefit of others who have not encountered this scenario (I have been doing this for 12+ years, but all that says is I should have known better).

Bottom line, my contract says I will get paid, regardless of the source of the hired candidate. BUT......the legal costs would far outpace the fee fairly quickly. 1 - they are an out of state client, most likely jurisdiction would fall in their state, Hunt Valley, MD; 2 - the Partner heading up HR is a former attorney, and 3 - the Managing Partner is a former Partner at Arthur Anderson (fight for every stingy penny and even half a penny). So the gold I am taking away from this discussion here is one of being creative (BOD discussions, etc.), being a pirate (cleaning house for them), and sticking by my guns on collecting the retainer up front regardless of how strong the contract language is. Maybe I will file in small claims court and get at least the $5k max limit (less a third of the fee of $16.5k but probably more than if I took it to Superior Civil Court, small based on our averages, another red flag I should have listened to). Any more thoughts?
Hi Ken, this has been interesting reading and it is unfortunate that it is as a result of what should be/will be a delay in you getting paid if your contract states so. I want to preface this by saying it has been many years since I have made placements but there was a time the company I started and ran heard the bell ring at least once a day for a very long time. Thing is that a company cannot arbitrarily decide to not pay your bill. We used to build in a percentage in our numbers for bad debt and legal fees. It's just one of those things. Whenever it happened like the way you explain it or the best was when we would find someone we submitted working at the company, I would treat it as an oversight and in absolutely no way shape or form did I or would I ever take the stand that we are at the mercy of the client. If they hired our candidate we got paid and sometimes it cost money to get paid. The thing to really understand and be clear about is that there is a difference in wanting and feeling that you should be paid and being in a position where the fee is really due. You let the client know that you are not looking for something you are not deserving of. You need to call your lawyer tell them what's up, maybe have put some money down and make a very calm phone call to your client in order to let them know that it is not up to them to decide what gets paid and what doesn't so be clear and sympathetic but firm to the fact that a fee is due and the fee will be paid. You are not at the mercy of companies who hire your candidates and then decide not to pay. It's a terrible perspective to have. I know it's not yours but I see it shared by a number of people out there and it's not good. By the way, make sure you send an invoice and copy the CEO in on it and make sure you really are entitled to the fee contractually and not just because there was some loss in the translation of the contract.
I would ask for 1/3 of the placement fee. This way you still make something towards your recruitment cost.
That is a terrible suggestion

Lionell Artemus said:
I would ask for 1/3 of the placement fee. This way you still make something towards your recruitment cost.
I agree with slouch and still think YOU should call
1> the highest level partner you know. Acting that this was an over sight or a misguided person making an error in decision. Take the high road and see where that gets you
if that yields nothing in a week or 10 days, then
2> you call their legal dept, acting the same way. Play nice in the sandbox until you have to do otherwise. Look, if they use retained firms and they are a large firm, oversights and poor judgments happen all the time. The legal dept, if they see things your way, will respect the professionalism. Really they will And you might even get paid. And continually mentioning to tis client that every long- term business relationships has bumps in the road. The real test of quality professionals is how they handle it.
3> if you need to take them to court, then decide if you want to take them or the full fee, or to small claims for a piece. Once you get the judgment, in the past, if they don't pay, you can report this as a bad debt to their D&B,. That gets attention.

I think it is worth trying to take the high road. Perhaps get the respect of the client, and maybe do business with them again if it makes sense.

I have been in the biz 15+ years. I have only had 1 bad debt. That was from a long time friend at a dot-com that called me quickly and apologized they would not be able to pay us cuz they were going under. I hadn't done more than 30 minutes of work on it, had a good relationship with my client contacts, and have done huge business with them since then.

Before you call vinnie and guido, first try what vinie and guido wold try. Ask nicely, respectfully and often. Even if in the end you do not get paid almost everyone will understand what you did and the way you did it. You will do more biz with those people in the future and the one's that shot you down will get theirs with Karma.
Best of luck

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