Referral fee
A flat payment or percentage paid to the person whose introduction turns into a paying client.
See it
What it is
A referral fee is money paid to someone whose introduction turns into a client. It can be a flat amount or a percentage, and it is normally earned only after a defined conversion event such as a signed contract and collected payment. Unlike a referral loop for product users, this is usually a person-to-person business development arrangement.
Reach for one when partners, former clients, or neighboring specialists regularly send qualified work your way. Agree on the fee before the introduction, then define what counts as a new lead, how long attribution lasts, which revenue is eligible, and when payment is due. A two-paragraph written agreement beats a warm memory six months later.
Gotcha: '10% of the project' is not a complete rule. Taxes, pass-through costs, refunds, later change orders, retainers, and repeat projects can all change the number. State whether the percentage applies to invoiced or collected fees, which line items count, and whether the fee ends after the first engagement. Some fields also regulate the practice: Section 8 of the US Real Estate Settlement Procedures Act bans paying anything of value for the referral of settlement service business outright rather than merely requiring disclosure, and lawyer referrals run into state bar rules on fee splitting. Plenty of corporate and public sector clients ban undisclosed referral payments in their supplier code, so disclose the arrangement wherever it could read as a kickback.
Ask AI for it
Draft a one-page referral-fee agreement and tracking plan for the arrangement below. Define a qualified introduction, prior-contact exclusions, the attribution window, flat or percentage fee, eligible revenue, payment trigger, refund treatment, renewals, change orders, and the end date. Use UTM parameters utm_source, utm_medium, and utm_campaign for link-based leads plus a unique referral code for direct introductions. Finish with one worked payment example and the exact spreadsheet columns needed to audit every fee. Do not invent the rate or eligibility terms.