QUESTION: I have a situation where I have a very difficult client, and I have three temps there. One of the temps is a high level 1099 contractor, and she wanted a $15 an hour increase. I asked the client if she would agree, and she refused. The client and candidate have gone around me completely, and now she is billing the client directly and not submitting her hours through me. They have both told me the contract has ended, but I have the confirmation she is still there. My contract is not iron tight with wording. It states there is a conversion fee if she hires the candidate, but I did not have the specific about not hiring her as a contractor either. The candidate is not budging and says I need to work it out with the client. I sent an email to the client stating she has three options. She has not replied, nor is she taking my calls. She is very, very difficult, and I am afraid to play hardball. She may cut off my other two temps.
Any thoughts, or should I just take this learning lesson and salvage my other two temps or fight the battle? – Nicole, San Francisco
ANSWER: The short answer is you fight the battle. A coach taught me this 25 years ago, and I did not take the right action, so learn from my failure here, Nicole. If you let a client screw you, you scream to the client; you are screwable. He used more graphic language, and I am sure you can imagine what that was. You will be screwed on the other two temps because they will see you will back down.
Here is what I had done when this happened in my firm, I sent the client or their boss a one-page collection letter with a copy of the signed fee agreement and invoice via FedEx. That letter may include copy such as the following:
It has come to my attention that you have hired Mary Smith outside of our contract. The conversion fee for her based on my estimated amount of her salary (take whatever the estimated amount is and whatever your conversion policy is) is _____.
If payment is not received by ______ (if you overnight this letter – do not be cheap on the shipping – make this date five business days later), I am turning this over to my attorney for collections.
You copy an attorney, even if he or she is a friend of yours. You do not have to hire them yet; you just want to say I have copied my attorney, Mary Smith, on this. That is the other thing: when you say that you are turning it over to your legal team changes the dynamic. Many clients think that they are dealing with a peon. I was a relatively small company in this whole scope of things, but my wording was very firm, straightforward.
I used to give them two weeks but learned that they wait until the deadline and call you. Now, I just give them a week. They are not going to just send you a check. In all my years of experience, I remember we would use the letter because you are being avoided. They are never going to give you any other business, so you might as well fight the good fight.
One time I just got the check. I did not even know what to do with it because I was shocked. I have never gotten a check when I have sent out a threatening letter. The letter has resolved the situation because they get that letter, and then they will call you to make a settlement. That is why I would stretch the number. I would not be conservative with the conversion fee because she is not communicating with you, or he is not communicating with you; I would put the higher end of the range.
Sending a collections letter has a 100% response rate, meaning you will get a phone call. Be prepared to hold your ground. Do not be nice. Be firm and stern. Do not be angry and mean, but they need to know that you will defend your right. They may argue that your figure is not what we are paying them. You can respectfully ask the compensation, especially if they said they were not hiring them. From here, I would stand my ground and reference the agreement explain that you are turning it over to your attorney.
Again, I would send it to whoever processes your invoice or the person that is avoiding you, and I would send it to their boss because her boss probably is not aware. It will humiliate them a little bit because they are unethical.
Great question.
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