Do you find yourself frequently referring business to other professionals? When these referrals are likely to be reciprocal, you’ll probably want to give them freely. But what about those situations where you refer clients to someone who isn’t able to return the favor?

When all the referrals are flowing one way, it may be appropriate to request a referral fee. You might also be willing to pay a referral fee in some situations, to encourage another professional to refer clients to you.

Here is a sample referral fee agreement between two coaches. Note that this is a simple letter of agreement between colleagues, and not a formal contract, so some details are left open to negotiation when circumstances warrant.

Carla Coach
123 Main Street
San Francisco, CA 94123

Dear Carla:

This letter will serve to memorialize our referral agreement. If all of the terms stated here are acceptable to you, please sign in the space indicated below.

From time to time, I will introduce you to prospective coaching clients who I encounter as a result of my own marketing efforts. For each of these prospects who becomes your paying client, you will pay me a referral fee equal to 15% of the coaching fees paid to you for the initial appointment and first 3 months they work with you, and 10% of any coaching fees paid for the following 9 months. No referral fees will be due after 12 months of coaching have been completed.

If a prospect I refer to you is already known to you before the referral takes place, we will jointly determine whether a referral fee is appropriate, and how much it should be.

You are permitted to negotiate any rate for coaching that is acceptable to the client. You are also permitted to raise your coaching rates at any time. Please notify me when you decide to do so.

Payment of referral fees will be made within 30 days after the client pays you.

It is understood that you will be marketing yourself as a coach independently of my referrals. Any clients you obtain from other sources will not be included in this agreement. You are also free to pursue paid speaking, training, or facilitation engagements with any client, including those referred by me, without becoming liable for any additional referral fees. If, however, you pursue a consulting engagement with a referred client, we will jointly determine whether a referral fee is appropriate, and how much it should be.

The term of this agreement will be one year, at the end of which time we will jointly decide whether to renew or revise it. Within that period, either of us may terminate this agreement with 30 days notice, with the caveat that any existing liability for fees will continue in force.

I am looking forward to a long and prosperous relationship!

Regards,

_________________________
C.J. Hayden, MCC

__________
Date

_________________________
Carla Coach, PCC

__________
Date

Disclaimer: This sample agreement is provided for information only and should not serve as a substitute for legal advice from an attorney familiar with the facts and circumstances of your specific situation.