Taking commission for forwarding clients

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Hey,

just wanted to get some input from you most experienced guys, since I've never done this myself before..

Recently I've forwarded a bigger project from my old client to a friend of mine (who does what the client needs).. we agreed on a 20% commission for me from whatever the total profit for him ends up to be.

Now my question is:
What is the best way to do this ?

If I connect my client with this guy, I will be completely left out of the equation and he's free to do whatever he wants basically..

If I stay in as the 'middle-man' it will most likely be inconvenient for both the client and him as well.. and for me as well tbh.

The ideal way that I could think of would be to sign some kind of contract between me and my friend that explicitly states that I'll get those 20% from the final invoice and let's say 10% from any subsequent business they do.

But then again, I have very little actual control.

I am sure recommending business to others on a commission basis is a common practice..

Any tips on how to accomplish this in a way that everybody is happy and I am 100% covered / safe ?
 

djbaxter

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First, you need to trust the people you refer to. That doesn't mean you shouldn't have some sort of contract for referrals but you should definitely NOT be in the position of middleman when passing on a referred project. Moreover:
  1. 20% seems very steep to me considering that he'll be doing all the work and, if I read you correctly, it's work you would not be able to do anyway or you'd keep it yourself. In that sort of situation, I make a referral to someone I trust and I don't charge or expect any fee in return.
  2. If he is agreeable to a referral fee, I don't see any reason for you to expect a cut from any future work he does with that client. You made the initial referral but any future work is work he earned by completing the first contract.
Now if this were part of a larger project and you are only subcontracting part of that project, the situation would be different. Then you would work out a fee between yourself and the subcontractor, pay the subcontractor directly, and bill the client yourself when the work is complete.
 
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Ok, I understand.
I actually do trust the guy, that's a good point.. (although I try to remove any emotions / relationships when it comes to business / contracts).
 
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