Can You Collect Your Overdue Placement Fees?

Today’s guest blogger is Wilson Cole. He is the CEO of BackdoorHires.com and Adams, Evens & Ross, the nation’s largest credit and collections agency designed exclusively for the staffing and recruiting industry. In 2008 he was inducted into INC Magazine’s, “INC 500” for being the CEO of Adams, Evens & Ross, the 307th fastest-growing privately held company in America. Adams, Evens, & Ross has helped more than 3,000 staffing and recruiting firms recover more than $1 billion in past-due debt and is an NPAworldwide Endorsed Program.

Staffing and recruiting companies play an important role in the business world. They alleviate the stress that comes with finding and hiring top candidates to fill positions at a company. Instead of spending the time and resources necessary to hire an employee, companies will contract with recruiting firms to do the job for them. After the firm has successfully fulfilled the terms outlined in their contract, the company pays them for their work. This should be an easy transaction between the two companies but, as everyone knows, there are always exceptions. Sometimes, clients will refuse to pay placement fees or try to negotiate their way out of them. So, what do you do when a client missed paying placement fees? And how do you know if you have a good case to collect past-due recruiting placement fees?

For those of you who are familiar with our company, you know that we are huge proponents of having legal counsel on any contract that you draw up or sign. You can save thousands of dollars in litigation fees if you spend the money upfront to have a lawyer work with you when you enter into a contract with a client. Warning aside, our clients come to us to help them collect past-due placement fees. We take all kinds of cases, but there are a few ways to know if you have a good case to collect on missed recruiting fees.

1. The first and easiest way to know you have a good case is if you have a signed contract with your client stating the exact time and amount they owe you. In these cases, the client clearly owes you and there is a record of the agreement.
2. Another way to know you have a good case is if there is some acknowledgment, either past or present, by your client that they knew and agreed to pay for your services. Any record of them saying they know that you were owed ___ amount will go a long way in the collection process. Even if they give an excuse as to why they are not paying, your case is strengthened by any admission that they understand you were owed the agreed amount.
3. The last way, that we will discuss here, to know you have a good case to collect on missed recruiting fees is if your client tries to file a lawsuit to avoid paying your fees. This is a bit of a tricky situation, but some people will use the threat of a lawsuit as a means to scare their way out of a contract. These cases are often baseless and more of a tactical move to avoid paying the owed fees. A lawsuit can work to your advantage because it once again acknowledges that they are trying to avoid acting on a previous agreement.

There are other ways to tell if you have a good case to collect on past-due placement fees, but the three above are some of the best. A signed contract will always be your best tool if you have any issues with one of your clients.