If I read the OP correctly, you were already the company of choice for this client.
The PA likely had you on a list and called when service / upgrade was needed.
You would have been called by the client, if the PA never existed, so why should you be expected to give away 10%.
I would let her know you would be happy to just present the billing to her, and what she does with it (mark it up?) is up to her.
She said she does this with other contractors she brings in to work on her clients homes, implying she has other clients.
Maybe, if she can enlighten you on just how many other clients she has and what they could be worth to you, it might be worth working something out with her.

A previous company I worked for did something a little different with a couple of people that would bring us business. We used a point system. Every $10,000 worth of work generated X number of points. The points could eventually be redeemed for tech toys like a new TV, or some other electronic device they might have on their wish list.
One person did not really want anything new in tech, so the company paid for airfare to Europe, which is what they really wanted. I think the boss just used up some airmiles for that, so it did not really cost any out of pocket cash to keep someone happy.
There might be ways to deal with this, just might have to be creative.

yeah, it was a bit annoying figuring out what his abbreviation meant.  most good writers will at least spell out the term the first time, then refer to an abbreviation for the rest of the piece.  but I guess Ernie sucks at basic writing.  :p

Yeah, don't you HATE it when someone uses an abbreviation that you've never heard of? In this case, PA means Personal Assistant.

More obvious meanings than Physician's Assistant are Public Address and Pennsylvania, but context shows those not to be the likely meaning.

I've seen the term here several times so I figured it was understood. Sorry.

PA (personal assistant for those of you not reading before this post) was introduced to me when I was already working for a person who hired her to be his PA (no, not his MA. His PA.) Then, when another client of hers needed A/V (is that clear?), she called me.


She had a list of one, but yes.


I would not have been called by the client because the client was just moving into town and didn't know anyone here. As far as I know, the GC and Interior Decorator were brought on by her, too.


I would not be happy to do this as it will introduce a delay in payment. It's an intriguing idea, though.


She has stated other client and named them. You'd recognize their names.


BRILLIANT point of view! She has not had a single other A/V need that I'm aware of in the last five years.


Good idea. With this scheme, other than this client, she would not have even earned an electric yo-yo.

Thanks, everyone, for all the ideas.
A major thing that she has overlooked is that she really doesn't want paperwork on all this, but if I'm going to pay her something, I'll be demanding an invoice from her for every payment. I'll also be requiring that the client knows about this.


That brings up another can of worms: does the client know that she's doing this with other people she has "brought on board"? As a moral issue, do I have a responsibility to tell the client? To rephrase slightly, when you see a client perhaps being cheated, do you tell the client?

1099?

The can of worms that I would be concerned about is the legal one regarding how this whole kick-back system works in your state. Your idea regarding an invoice is a good one, but it also starts a paper trail that ends with you, in essence, bribing the PA for access to work and clients. At least that's how an over-zealous enforcement officer could interpret it.

Wrestling with the morals of the issue comes after settling the legal issue.

buzz, that made me laugh. It's soooo appropriate but it would probably make her run. She has trouble understanding that if I pay her from what I collect, and there's no paperwork, I'll be paying income tax on money I'm giving her.

I like the idea, though. I'm going to think through an approach to this whole thing, then park it in my memory for whenever the discussion comes up.

Ernie,

if if she has brought you business you would not normally have got then I don’t see why it is out of the question to pay a “finders” or “referral” fee. Since a recommendation is better than an open tender this scenario is often more cost effective to service than paying for speculative advertising. The only fly in the ointment is assigning a value. Clearly 10% of the project value is way out of kilter as this represents a much higher percentage of your profit.

Here in UK we are often asked to provide a “main contractors discount” and/ or accommodate a 12 month retention value on the invoice. TBH in these cases I often just add these amounts to the quote value and look at them as a cost of doing businesss that the client needs to pay for.

MCD is often around the 5% mark.

Effectively in this case she is basically working for you as a commission only sales person. I see no problem with that. You just need to negotiate a mutually workable rate.

Thanks. One problem is that more than $30,000 of work and product has been done/installed without this in place, so this represents a raise in price of everything, or a lowering of profit and hourly rate.

I will indeed walk, with an explanation to the client, if it's insisted that I provide a percentage to the PA and keep my rates the same. I won't set up a lower rate for any client unless A LOT of ongoing work is guaranteed.

This ^^^

If you can get a lot of business out of it, these can be good relationships. However, pay a percentage of profit instead of a flat percentage and let her know ASAP that you will be 1099ing her.

She doesn't get to see paperwork/invoices. The percentage of profit is what you say it is.

Wow, the neighbor across the street claimed the condo president where he used to own/live was doing this, I thought no way, but I guess she might have been!

Curious to see what the response from the client will be.

Betcha they call you back and you never see/hear from the PA ever again.

I have dealt with a few PAs over the years, some of them were really cool to deal with, others were utterly intolerable, oddly the intolerable ones were really arrogant and snarky, representing people of varying degrees of fame that happened to be profoundly nice and easy to deal with.

Never had one try to bribe me.

Let's make a distinction here: she doesn't get to see invoices to me from my vendors, but she's the contact for payment of invoices so she definitely sees my invoices to the client. So, yes, the percentage of profit is buried where she can't see it.

Just as nobody asks the grocer how much the grocer paid for those tomatoes, and nobody at the market would tell them, nobody finds out from me what I pay for products. I have, however, had people want to see the invoices to me from vendors.

Ernie

The contracts you have with these clients I assume create a fiduciary responsibility on your part to act in the best interests of your client.

Simply put in a call to your attorney and see what’s legit.

Does CA require you to be licensed to charge people for what you do? If so, then compensating her in anyway related to work performed (percentage) is illegal. I also wonder how her employer feels about the fact she is causing him to pay more so she can make a profit.