For those that have jumped the fence into the world of consulting, the question invariably comes up on what is a qualified referral worth? Thanks to the Bay Area Consulting Network, I’ve found the first of what may become a body of reasonable guidance:
Fee sharing may range from 0 â€“ 40% and should always be negotiated between the consultants prior to beginning a common venture.1. REFERRAL FEE: When one consultant provides the introduction to a prospective client to another consultant that subsequently turns into a project.
- 5% referral fee â€“ for simply providing a sales lead or client introduction with no additional participation in the business development. If a referral fee is expected, specify so when you pass on the lead. (In some cases, you may not wish a referral fee.)
- 10% referral fee â€“ for working actively with another consultant to develop a project, after having provided the sales lead; the referring consultant would not have an active role in the project, once secured.These fees apply to the first project. A 5% referral fee should continue to apply to other work done for that client for the first year following the referral.2. CONSULTANT SUB-CONTRACT FEE: When a consultant has developed a project and then offers an active role on the project to another consultant, a consultant sub-contract fee is due to the consultant who is the project developer/project manager. 25-40% sub-contract fee â€“ due to the managing consultant for providing the opportunity and managing the project and client relationship.