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Issues with Partnership

May 11 '13 4 Last Comment
Jarchcn
May 11, 13 9:54 am

Hi everybody, there is something i would like to share and maybe get some advice on ...

   A few months ago i got a freelance opportunity working on a project directly for a developer in China. The idea was to develop the SD phase, and now we have a real chance to keep working on the project the DD and CD.  I got this client, who I've been working with, through a mate that is still studying and actually, the mate knows absolutely nothing about architecture , nor does he know about  architecture business in general, nor does he have any architecture experience or background.... but he has the contacts to get these kinds of opportunities ... you know what i mean...

So we agreed on doing this together, I have enough experience and knowledge, so i have been managing and leading the design team, preparing presentations for the client , doing almost everything even the administrative stuff . I'm also using my portfolio to convince the client that we have the experience to do this. I have assembled the team through my personal contact network, and this whole process resulted in the client being very satisfied so now he wants us to do the next stages of the project and maybe give us more projects...

As I said, my mate knows absolutely nothing and he has not collaborated at all in the actual working side of the project. He has only been arranging the meetings and dealing with the clients and going there to help with the translation. 

He really doesn't know the amount of hours that an architecture project requires,  he just saw the opportunity to get some fast cash and now he is getting impatient and he wants to get more projects and therefore more money. I, on the other hand, want to be very professional , first because I like this profession and I might establish a firm in the future. The mate is getting 40% of the deal, just for translation and business arrangements, and he wants to get as many benefits as possible, but he doesn't want to put more money into getting more people to design or increase the quality of our projects. This, in my opinion, would help us give the client a better product and would provide me with future opportunities, since, as I am still young, I would like to have a a long term architectural career....  

I would appreciate it if you could tell me what percentage you think would be fair for him to get, knowing he has the contacts, but has nothing else to offer. Also, what kind of title would this kind of person have in a established architecture company? I also would like to protect my future career as an architect, and do not want to potentially harm it by damaging my reputation.  This partnership gave benefits to both of us, he has the contacts but I have the experience , however, I am afraid any project we do together he might use it in the future to get clients and nothing will stop him from finding another architect to develop the projects for him. As he got the contact, he would probably consider the project as being his, but he hasn't been involved at all in the design process, as i said before.

In Summary, how should I deal with these kinds of business issues (a guy with contacts but nothing else to contribute)? How should I set up the ground rules for this kind of partnership when i get other freelance opportunities such as this?

Thanks in advance mates.

 

gruen
May 11, 13 10:38 am

My opinion: if he isn't capable if being a real partner then you need to figure out what an employee would be worth for management and translation plus a finders fee for bringing in the work. Say 10% for the finders fee ??

Miles JaffeMiles Jaffe
May 11, 13 12:37 pm

It's not just contacts, it's translation and being the front man. That's worth 50%. Not of the fee, but of the profit. At which point he is labeled "partner".

You need to make him understand the cost of doing business and the necessity of well-serving clients as a means to get more business. Identify goals such as building a business that is consistently profitable over a long term. Take a long view, this could play well within the cultural perspective.

Establish a wage scale for both of you, as partners it should be equal. Deduct all costs (your salaries, staff, overhead, consultants, travel, etc.), divide by two and Bob's your uncle.

But the most important thing is trust. Trust that is bought is never as good as trust that is earned. Not sure how "mate" equates with "friend" or how much of a friend he is. Don't assume anything, put everything on paper.

On the other hand, a finder's fee of 15% is fair (though probably not acceptable at this point). You can bid out translation services to determine their cost. These expenses should obviously be built into your contract and/or fees. It sounds like the train has left the station on the current project.

gwharton
May 11, 13 1:48 pm

Since he's a proven rainmaker but not an architect, the best thing to do is negotiate an exclusive commission agreement with him: he gets a finders fee on all signed contracts plus maybe a percentage of billings. 

Jarchcn
May 18, 13 11:28 pm

Thank you all mates, that was very helpful . I like the term "  rainmaker" , that really fits him , thanks again .

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