Wednesday, March 25, 2009

Recruiter loses appeal in fee suit

Interesting story about a recruiter losing an appeal on a claim for fees against Blank Rome. Apparently the recruiter suggested a merger via e-mail 10 months prior to said merger happening through the aid of another recruiter who received a $730,000 (!) fee. Here's the key line:
The appeals court opinion said the "exchange of e-mails, which did not set forth the fee for plaintiff's services or an objective standard to determine it, was too indefinite to be enforceable."

I think that there is an understanding in this industry that if you present a candidate or group of candidates, a fee will be paid. However, as this case shows, it can get tricky when dealing with past submissions. Most contracts lay out a time frame (6 months to 1 year) for which a submission is considered "owned" by the recruiter. Absent clear language of what constitutes a submission (in this case it was apparently only an e-mail suggestion), and for how long a fee is owed on that submission, I have a hard time sympathizing with this recruiter.

It's a lesson that there needs to be some clear discussion of fees before submitting (or for that matter accepting submissions) candidates to clients and potential clients. My understanding is that a verbal discussion can be enough, but recruiters should make sure that everything is in writing to protect both themselves and their clients from potentially costly litigation.


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