Referral Fees

big papi


Just curious, is there some sort of professional standard for giving a referral fee to someone that brings a project to your firm? If so, does it vary based upon budget?

Any rules of thumb would be appreciated.

Thanks in advance.

Jul 17, 09 11:39 am

varies - 3-10% of the fee.

Jul 17, 09 11:58 am  · 

depends - is it an employee? if so, i'd let them run the project and they get a percentage of the profit it makes.

if it's an outside lead, buy them a nice dinner and send them a great bottle of wine the next day unless you had some prior agreement.

10% of the fee is the entire profit - why take the project if you're giving up that much?

Jul 17, 09 12:05 pm  · 

on that note, at what point is it suggested that i present a potential project to my boss? how developed should the project be? i get the feeling that i will in some way lose more and more of the suggested 3-10% referral fee as i let my boss in on the project. is this true?

Aug 16, 09 2:54 pm  · 

I recognize this may be an unwelcome post, but over the years I've seen too many instances where junior staff adopt a grossly over-inflated view of the value of a referral to the firm.

The value of a referral is tied directly to the ability of the firm to actually close the transaction at a scope of service and fee level that will result in a successful project for the firm. If you can't make that happen on your own, then a finder's fee alone (maybe 1-2%) is warranted, at best.

If you take the long view, your ability to bring a consistent flow of new and profitable work to the firm is the surest path to partnership. An excessive short-term focus on capturing a finders fee suggests that you don't trust your firm to treat you fairly and recognize your contribution. If the trust level is that low, then I question why you want to bring the project to the firm in the first place.

Aug 16, 09 9:20 pm  · 

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