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Freelancer Referrals: The Do's & Don'ts You Need to Know

Many freelancers love recommending colleagues for freelancing project, and can sometimes receive a referral fee as a result. There’s nothing necessarily wrong with those types of referrals – they are an easy and low-maintenance way to get some extra cash. And as long as all sides profit and nobody is being treated unfairly, paid referrals can be great – but things don’t always work out like that.

Often, freelancers who do the whole referral fee thing will forget that other people may not encounter it on a daily basis. Here are some red flags which could indicate you’re dealing with someone unreasonable:

1. Not providing full-disclosure as early as possible

Referral fees are like a condition in a contract. You cannot just slip them in at a later date. If someone expects to be paid a lump sum of money or a percentage of a deal because they served as the middleman between contractor and freelancer, they better say it right away.

2. Asking after the freelancer and the client have agreed on a price

This second red flag is an absolutely infuriating escalation of not providing full-disclosure. There are people who request referral fees after the deal between the other two parties has gone through. This is incredibly unfair for a couple of reasons.

First of all, it allows the person who provided the referral to basically gauge how much you’re getting out of the job and potentially go higher than his usual referral fee accordingly.

Secondly, if the freelancer who is actually doing the job is aware of the referral fee, that gives them some possibilities. You can negotiate with the client for a slightly better rate than your usual price to make for the net loss of the referral. Tricking people out of that option with an unexpected request of a referral fee is just stupid.

3. Acting like it’s completely normal

“Oh yes, it’s totally a thing, everybody in our field is doing it.” No matter what freelancers who are taking fees for referrals are telling you, they are not an industry standard. You cannot expect a referral fee just because it is a thing that exists. If someone acts like their late mention of a commission is completely normal, you might consider not working with that person in the future.

How to do referral fees the right way:

The one surefire way to do referral fees is to be completely open about it with both sides. Tell the client, tell the freelancer you’re referring and if somebody doesn’t agree with the deal, they can walk out. Yes, the client and the freelancer you referred can now just do the deal without giving you a cent. But they both know they are working with you for a reason. Don’t assume everyone is going to stab you in the back as soon as they get the chance. Honesty is the best policy when it comes down to paid referrals.

Dealing with unexpected referral fees – Say no!

There really is only one, very simple way, to deal with people who ask for referrals after the fact. Stay firm and say no. As long as there wasn’t full disclosure from the beginning, you are not legally obligated to pay someone anything they just decide to ask for out of the blue. People who do that won’t stay in business for very long. And they are definitely not people that you want to be working with on a regular basis – they might be able to get a couple of gullible souls once. But the end, unexpected referral fee requests will burn all their business relationships, which are the single most important things in a business model that relies on commissions.

So, if somebody asks you for a fee after you’ve already agreed to do the work or even started doing it, just say no. Don’t feel like you own that person something, because they are the ones in the wrong. Unexpected referral fees are unprofessional, unsustainable as a business model and, quite frankly, a petty thing to do.

Have you had to deal with unexpected referral fees? If so, how did you handle them? We are always very happy to hear from our readers, so tell us your story in the comment section below this article!
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