Dear Nicky,

I have a retainer with my client and sometimes get engagement fees up front with other clients. I do not feel I need to share these with my NPAworldwide split partners. Is it right to do that?

Stingy in Steubenville

Dear Stingy,

We all can assess things that we think are right, but the best way to make that judgement supportable in our network is to refer to the Bylaws and Operations Manual. Much of this about the spirit of a split fee network. Here is what the Operations Manual says about retainers and engagement fees.

NPAworldwide requires a split of the total fee, inclusive of a retainer or engagement fee associated with the position in which the split occurs. Because of the differences in the types of retainers and the way they are paid (for example, one retainer for multiple positions), the member with the job order is required to clarify any retainers/engagement fees which are to be received from the client for their recruiting efforts when POSTING/SHARING their position in NPAworldwide, or contacting or liaising with another affiliate for assistance on the assignment, and PRIOR to presenting the cooperating member’s candidate to the client company. Failure to clarify and gain agreement of the fee in writing prior to arranging an interview can obligate the placing member to payment of a fee equal to 47.5% of that listed in their published fee schedule. NPAworldwide has the option to request copies of client payment records, including credit card payments receipts, copies of the draft, or bank payment records to verify the total fee payment.

While it is impossible to specify every client relationship regarding retainers/engagement fees in this manual, it is required that each member of NPAworldwide follow the spirit of NPAworldwide, and compensate a partner firm honestly and appropriately when a split placement is made where a retainer or engagement fee is involved.


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