Modifying Contingency Fee Agreement

Hi guys,

I am new to this forum and was hoping to get some advice. I created an initial agreement with one of my clients for either 15% or $15K, lower fee wins. I did this to establish credibility with the client. Well they were acquired by a Fortune 500 Software company, but still operating semi independently from the parent company. After placing 7 people there, an offer was extended to a new candidate. The hiring manager (VP) recommended to me to change my fee to 20% (no cap). This would almost double my potential fee with the new hire. My concern is that the Parent company will say no and not make me into a preferred vendor (still waiting to be approved). Also, our agreement expired, but it states that fee determination will survive termination of agreement. Any advice would be much appreciated.

Thank you,

Will

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Replies to This Discussion

Permalink Reply by Bill Schultz on December 8, 2011 at 9:47pm

if you placed 7 people, you have enough credibility to raise your fees. If there's resistance, you can decide what to do next.

But I don't feel they would drop you without a negotiation. Especially software positions.

Now, should you change it midstream on a new hire?.....I wouldn't.

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Permalink Reply by Raphael Fang on December 9, 2011 at 12:47am

Don't worry about raising your fee. I have worked with software company and they are not concern about the fee if you can bring them good talents.

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Permalink Reply by William on December 9, 2011 at 8:33am

Thank you so much Bill and Raphael

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Permalink Reply by Dave Nerz on December 9, 2011 at 10:37am

The VP has told you to raise them for a reason. Have you discussed with him his thoughts on why he has suggested this? Have you considered a 5% engagement fee and 15% uncapped as your standard fee. The VP is coaching you, it would be great to know why...

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Permalink Reply by William on December 9, 2011 at 10:43am

Hi Dave, he suggested it to me since it is now acquired and they are no longer in save mode as a typical start up would be. Unfortunately, I was told that they will only do contingency searches. Thank you for you advice.

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Permalink Reply by Dan Ogden on December 9, 2011 at 12:18pm

Isn't it amazing how we as recruiters -- mostly because of the lies candidates tell us -- are so willing to distrust the rationale behind direct requests?

Your client is telling you to raise your fee and remove the cap -- that's pretty much all I'd need to know. After all, the client is always right, no?

Whether they were acquired or not, you add the phrase "this agreement replaces and supercedes any and all prior agreements" and your prior agreement fee % is addressed; it has the effect of nullifying your prior agreement.

In the NYC area, by the way, 20-25% (depending on the specialty) is standard, with some clients paying a premium for more specific tastes up to 30% or more.