Negotiate Fees after a Contract?

  By Michael Gionta  |    Wednesday June 30, 2021

Category: Columns, Expert Advice


QUESTION: Would you negotiate fees after a contract was signed, and now the client wants to hire three high-priced individuals? It is a $17 million company, and it would be an investment. - Karen 


ANSWER: I rarely negotiated a contract after the fact because when you negotiate after the fact, the client will expect you to always negotiate after the fact. What I have done in these instances, if the client hires three individuals, I will give them credit on the next search. When they give me another assignment, I want it on exclusive, and because we made three hires at $25,000 a piece, I will provide them with a $5,000 credit on the next two exclusive hires or a $3,000 credit on the next two contingency hires. If the cancels the position or fill it internally, the credit is waived just like a retainer would be absorbed to execute the search.  

You may be faced with some push back when you approach the request. From the client›s perspective, hiring three individuals is no more work than hiring one. The amount of work I had to do to find one, two, three, or more qualified candidates is not relevant. 

Your client may say that they are a small company, and we want to partner with somebody, which is where I reinforce the fact that credit on the next search is actually about having a partnership. That credit is your investment in creating and fostering that partnership. They may counter that they need help now, not in the future; it is effortless to begin defending your decisions, abilities, or processes. To remain in trusted advisor status, you need to avoid defending.

It goes down to avoid defending. It is all about having a conversation with your client about their perspective. It is about asking and confirming with your client that they are a company that honors their agreements and asking what has changed. Directing the conversation in this manner keeps you from defending, but forces the client to defend their situation. 

When it came to people wanting to change fees, I stayed in attorney mode by asking them how I have not delivered on my promise. If I have honored my commitment, counter by asking if their clients would prefer that they do work for free. By staying away from defending your position and merely continuing to ask questions, your client will begin to understand your perspective.

Ask again and again for the client to help you understand where you did not deliver on the fee. In my experience, most clients will say that I cannot be flexible here and work with us; we are not going to work with you anymore.  

When this happens, my exact response is: “What I am hearing, Mr./Ms. Client is telling me that you are not going to work with me and that my choice is to work with a company where the contract only works when it serves them, and it is meaningless; it can be changed on a whim by you. That is not the type of business I work in. If that is what the business conditions are going forward, I am not sure that we are a good match.

Often, the client will say no; this is a one-time situation where renegotiation will ensure a future relationship. They implore you to trust them on their word, which is where I acknowledge that I trusted them during the initial negotiation and signing of the contract. I also recognize that a continued relationship is contingent upon you being of a service-oriented mind to pay me whatever they feel is appropriate and mine is, I have to honor the contract. If that is my choice, pay me what you owe me now, and we will part friends.  

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