This is a series of five e-mails to resolve a fee-split dispute. Harriet Samara is the consultant, a subcontractor to us. The client is Dawson Company. When this was settled, we returned to the original 80%/20% fee split, and the project continued another year. The fact is, the consultant and I are best friends, and will remain so. But even best friends can have disagreements.
Here is the dispute: CareerLab received 20% of the fee for finding a corporate client who paid us $12,000/month. For delivering the services, our subcontractor received 80%. The $12,000 fee worked for six months, but was too high for the corporate client to continue.
Thus, we knew we would have to lower the fee for the next calendar year. Our subcontractor abruptly announced that she wanted to take on the assignment herself and eliminate CareerLab from the equation. In passing, she suggested a 10% split for us. Notice that I used an industry standard (20-30%) referral fee to add force to my reply.
E-mail #1
Harriet,
I don't understand how you decided our fee split should automatically go to 90%/10% just because the assignment is continuing on different terms. Normally, a placement fee is 20%-30% of first year compensation, and this is essentially what we're doing for Dawson Company.
Using your 90/10 split, the numbers would look like this: [I showed a chart showing three options: A, B, and C.]
I would avoid option "C," your working variable hours for variable fees. That just confuses everyone.
Let me know how you'd like to proceed.
:B
E-mail #2
From: Harriet Samara
Sent: November 27, 20— 5:49 PM
To: Bill Frank
Subject: Fee dispute
Bill,
I got the impression you were angry when you wrote to me last.
If I have offended you by my proposition I sincerely apologize, that was not my intention. Your friendship is very important to me and I would never intentionally do anything to hurt you. Again, I am sorry for all this.
E-mail #3
Hi Harriet,
You surprised me when you came in the other day. I was not prepared to talk about Dawson. I had other issues on my mind.
You said you wanted Dawson as an anchor client in 20— and wanted to eliminate CareerLab from the equation. (Those may not be your exact words, but that was the message.)
I didn't know what to say. When I didn't answer, you pressed me for what percentage I would want going forward. I had no clue, because we hadn't run any numbers about any scenarios or prices.
When I still didn't answer you suggested 10%, and I accepted because it sounded as if you wanted it decided on the spot.
After you left, I had the thoughts I e-mailed you last week, namely: "I don't understand how you decided our fee split should automatically go to 90%/10% just because the assignment is continuing on different terms. Normally, a placement fee is 20%-30% of first year compensation, and this is essentially what we're doing for Dawson."
Harriet, I have known for a while that we would need to adjust our pricing for Dawson in 20—. But we have never looked at any numbers. I can create a spreadsheet showing different scenarios and percentages, and then we can sit down to decide what's best for everyone: Bill, Harriet, and Dawson Company.
Would that work for you?
:B
E-mail #1
[Now, Harriet is vacationing in Mexico.]
Hola Bill!
This sounds like an excellent solution. Thank you for being understanding. I probably got carried away, as I am known to do.
We are HOT down here in Mexico and thinking of you and sending warm thoughts.
Yours,
Harriet
E-mail #5
Have fun—see you when you return.
Diga me algo en espanol.*
:B
*"Tell me something in Spanish." One of the few phrases I remember from high school, along with "¿Dónde está el baño?" [Where's the bathroom?], and "Yo quiero otra cerveza" [I want another beer].