Should you charge other freelancers a referral fee?

Greetings, readers! I hope you’re all doing well in your various corners of the world. This week, let’s talk about referral fees!

It’s a situation we’ve probably all encountered: a client (whether you’ve worked with them before, or not) approaches you about a translation or interpreting job, and you can’t accept it. Maybe it’s in a different language combination or specialization; maybe you’re too busy; maybe it’s for a service you don’t provide. You can’t help the client, but you know someone who might be able to. What should you do? Just pass that person’s name along, or offer to refer them in exchange for a cut of what they earn from the job?

And even if you know what you’d do in that situation, what about more complicated scenarios:

• A trusted, long-term client that sends you a lot of work wants a referral to a translator in the opposite language direction, or another language combination
• You want to completely “hand off” a client to someone else, for whatever reason
• You’re taking a leave of absence and you want to hire another freelancer to completely take over your clients for that period of time, but then give them back when you return
• You’re thinking of retiring, and your client base represents an asset that you’d like to sell

It’s a complicated question, and it’s a very personal decision, but here’s my take:

In general, I am not a fan of referral fees. I’m more of a, “what goes around, comes around” kind of person, and in 20+ years as a freelancer, I have never charged a referral fee, and only rarely, when I was first starting out, have I paid a referral fee. I’ve had other freelancers refer me to five-figure clients without asking for a referral fee, and I’ve done the same for other people. In fact, I know that some of my referrals (for example English to French translators who started working with some of my direct clients) have gone on to earn more money from my clients than I have (because the clients needed them more often than they needed me), and it honestly doesn’t bother me.

In the three most common scenarios (new client offers a project I can’t take on; existing client wants a referral for something I don’t do; I want to hand off a client), I would personally not charge a referral fee, and just chalk it up to “freelance karma.” I think that something good will come my way because of sending good work to someone else.

The more nuanced scenarios are the last two I presented above. Let’s say you’re having a baby, caring for an aging relative, or taking an extended “bucket list” trip, and you need someone else to essentially replace you for a period of time. Whether I would take any sort of cut would depend on how involved I am in the process. I have, in the past, facilitated one of my direct clients working with a colleague while I was on vacation (when my daughter was little, my family consistently took the entire month of July off), and I have never charged a referral fee for that. However, if you are taking a more extended leave of absence and you’re going to, for example, keep editing or reviewing the colleague’s translations, I think you should definitely charge for that, and I think it would be fair to keep some (up to you to define “some”) of the money as a “head hunter/project management” fee.

I also think it’s an appealing idea to basically sell your freelance business if you want to retire, but it’s a delicate thing to do. A freelance business is very specific to the individual who does the work, and I think it’s quite rare that one freelance translator or interpreter could just replace another. Also, if you work primarily with agencies, I think it’s not really necessary, because presumably they have other translators or interpreters in your language combination. But if you work mostly with direct clients, it could be worth considering if you have an up-and-coming colleague who might see this as a way around having to do tons of marketing to establish their own client base. Various sources point to figures in the neighborhood of one to three years’ revenue as a starting point for selling a business, so you could look at how much you’ve made from the clients you’re interested in “selling,” and use that as a starting point. Still, I feel kind of hesitant about this approach. I don’t think that a restaurant’s customers care that much who the owner is; they may feel some attachment to that person, but as long as the quality and service remain the same, I think they’re likely to continue coming if the restaurant is sold. However if someone pays you a $10,000 referral fee for a client that’s been sending you $10,000 a year of work, and then the client drops them after one assignment, I don’t think they’re going to be thrilled. If this is the route you’re planning on taking ahead of retirement, I think I’d be likely to bring the new person on as a partner/co-translator, a year or two in advance of your retirement, then see how things go.

I hope these tips are helpful! If you have any referral fee stories, feel free to post them in the comments!

Corinne McKay (classes@trainingfortranslators.com) is the founder of Training for Translators, and has been a full-time freelancer since 2002. An ATA-certified French to English translator and Colorado court-certified interpreter, she also holds a Master of Conference Interpreting from Glendon College. For more tips and insights, join the Training for Translators mailing list!