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Dealing with Fee and Confidentiality Agreements

Question: I made an MPC call to a prospect after a couple of conversations, not emails.  We agreed the next step was to review our agreement.  After sending it, he then asked for strict confidentiality agreement with fee verbiage.  They do not have an opening and do not want to engage in a search at this point is what my prospect told me.  I have not had this type of request.  Have you encountered this?  What do you think?  How would address this? – Mark, Georgia

Answer: A confidentiality agreement with fee verbiage – I do not mind the confidentiality piece, but I want the structure of my fee agreement. In my recruiting firm, it was a year from the point of last communication, not a year from submission. But whatever your language is around that, I want that and a fee agreement. Because even if there is no search that they wanted you to work on, it is vague as to how long you own the candidate. We write the agreements to protect us obviously. Generally when you work with your accountant or your attorney or when we go to hire somebody, we sign their agreements. Recruiting is one of the only industries where they send us theirs.

Granted there is some negotiation with all that, but their agreement or their wording is not designed to protect you. You get all kinds of variations, but I have not seen a strict confidentiality agreement with fee verbiage, so I am not sure I have an idea what that means, but I have seen huge alterations of what I have done from a very simplistic view which had very little clear definitions of candidate ownership to the 627 page declaration, the constitutions that companies put out that define every scenario which means unless they hired them and his and her hair does not grow more than 1/8 of an inch, then they can hire them and not owe you a fee.

What I usually like to do, whether it is working with the employer’s agreement or my own agreement, is to make sure we have those basic protections in there:  (1) definition of ownership and (2) clear definition of what the fee is and what is entailed. Is it estimated first year’s compensation, guaranteed compensation, i.e. base salary, sign on bonuses, things like that, guaranteed draws, or is it just on base salary. Any of those is your choice and that it is very clear that anyone you submit is yours because I have even seen agreements as they have evolved where people go their presence on social media sites such as Facebook, LinkedIn, Monster, etc. shall not be considered a reason why they are not owned by XYZ Search Firm.

I am not a lawyer, so I am not going to draft an agreement for you, but those are the basic protections that I would want to have in any agreement, and I would want to have it signed by them.

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