That’s what I heard every day for 2 years from my boss.
Every time I talked with a partner in a public accounting firm or a corporate attorney or a commercial banker he would tell me that they only returned my call because I worked for him. They only referred clients to me because I worked for him. Yes, he had a huge ego.
I believe he thought if he said it enough to all his recruiters they would believe him – most did. None of us had signed non-competes – he told us he didn’t need them because after working for him no one would talk to us if we left But I thought differently. After hearing this from him for two years I decided during the last quarter of 1992 to arrange to meet face-to-face with each of the good contacts I had made that referred clients to me and referred their friends when they were quietly seeking to change positions.
I met them for breakfast, lunch or dinner and asked each one if they returned my calls and referred work to me because of my boss or because of me. Many did say they returned the first call because of my boss – he had a good reputation in the community – but from then on it was because of me. Two of the partners I met with thought I owned the firm and had no idea that I worked for Dan (not his real name).
And they all said they only referred clients and potential candidates because they respected the way I handled my practice. They liked that I always called the people they referred to me even if they didn’t fit a search I was conducting at that time and that I circled back with them and told them of my findings. They liked that I returned calls in a reasonable time – same day or early next day. And they said that they could tell I was honest and cared about the client and the candidates.
All of them asked me if I was going to leave and set up my own firm. I told them I was thinking about it because I was uncomfortable with the way some things were handled but wasn’t real sure what or how to do it. I didn’t want to spend a lot of time running my business when I wanted to work my business. Unlike many of the recruiters that recruit in the finance and accounting discipline I went to school for art, you know painting pictures and creating sculptures – and did not know the first thing about closing the books, general ledgers or any of that stuff. Recruiting candidates in the finance and accounting discipline is one thing but doing any part of that stuff is quite another. It’s hard to imagine that I actually spent 10 years in the banking industry isn’t it?
One partner, Bob (not his real name), from PriceWaterhouse offered to help me with the start up of my business and do my accounting for the first year for free and then he’d help me find an accountant. He felt I should learn to keep my own books so that I would know what was going on in my business. He suggested an attorney for me to go see about becoming an S-Corp, drawing up contracts, reviewing contracts for leases etc. and for general legal advice about setting up and running a business, he said I needed to get some business insurance to protect myself. He said to make sure that where ever I got the insurance they understood recruiting and to have the attorney review any policy before I bought it and to have the attorney review everything before I signed it. Nice guy – already had hired someone from me and referred several of his clients to me. Our monthly meetings for the first couple of years were very beneficial and it was very gracious of him to give me his time.
I met with Will (Not his real name) the attorney and we talked about everything. I felt very comfortable and believed that he really had my best interest at heart. He charged $300 an hour and it was money well spent. (In the years following I found out that Bob and Will went to Michigan together and were friends and that Bob was also Will’s client) Will took care of the filing for my corporation, reviewed and negotiated my shared-office space rental papers, reviewed the contract for the rent-to-own office furniture and assisted me with writing my contracts – it was his suggestion that I not offer any guarantees or money back if the placement didn’t work out. He said if I wasn’t the one actually making the hiring decision and then managing person, I had no control over the how that candidate performed once he/she was onboard at the company; I was only responsible for the process up to the start date.
I opened Norwood Network Inc. on April 1, 2003. I thought April Fool’s Day was appropriate as I was possibly a complete fool for opening my own firm.
I gave a two week notice to my employer the beginning of March 1993 an d told him that I was going to open my own firm and suggested (on my attorney’s advice) that the 6 searches I was currently involved with I take with me and act as their agent to finish them and they would bill the clients and pay me as usual. Or, I told them I will simply walk out today and call the clients and tell them I am starting my own firm and would they like me to complete the searches as no one else at the firm actually handled finance and accounting positions besides me. They opted for me to act as their agent – knowing that the clients would go with me and wanting whatever money they could get. They went three years without anyone recruiting finance and accounting positions after I left.
I called each company and told them what was going on and how their search would be completed and told them if they were uncomfortable with the arrangement they could chose to have someone at the current firm take over the search; everyone agreed to the plan except one guy that said he would rather stay with the current firm - four weeks later he called me and asked me to complete the search because whoever was handling the search didn’t know what they were doing in accounting and were just sending resumes every day.
I worked two weeks into March and then left on a week cruise. When I came back I had one week to get my office set up and ready to go for April 1st. I started my business with job orders already in my pipe line and I had sent out 500 announcements the week before I opened my own firm, I sent one to everyone I had some kind of relationship with. I finished the old searches and got more searches. The first real Norwood Network cash-in was from a large company that called me and asked me to do a search after one of their division heads received my announcement; they told me they like to help new entrepreneurs – the fee was $40,000 and they sent me the check when they got it back from their bank because they knew it was my first search and first “cash-in”.
Partners from other firms and other corporate attorneys helped too – with marketing ideas, suggesting groups around town to join, introducing me to their clients and their network of contacts. They invited me to come to their suites at the hockey, football and baseball games to introduce me to other people.
With all of my good contacts I shared my “wish-list” of companies that I wanted for clients and they would introduce me to the president, CFO, CAO or Controller depending on the size of the company. They introduced me to equity firms that were investing in new firms and companies in Michigan that would need to hire executive staff – firms based in New York, Boston and Chicago; besides the few in the Detroit area (Ann Arbor area).
They were all very supportive and when I could return the favor I did. If I knew one of my clients was shopping for a new accounting firm I suggested some of the partners that I knew well, I suggested commercial lenders to companies looking for financing or refinancing. I suggested attorneys when I knew clients were looking for a new law firm. I once even called the managing partner of one the largest public accounting firms and asked why 32 women had called me in the last 24 hours saying they wanted to leave the firm. (That was very unusual for me as I did not advertise and my telephone number was not in the telephone book nor available through information.) It turns out a popular woman senior manager did not make partner and that upset all the women. My call to the firm helped them address the issue quickly and they didn’t have a lot of people making career decisions for the wrong reason.
Every one that assisted me kept encouraging me to not lower my fees and said that walking away from businesses that wanted to pay lower fees set me apart from other recruiters and gave me the perception of being more valuable – especially when I was being referred by someone. I have never lowered my service fee of 1/3 of the total anticipated annual salary. Yes, if they offer a signing bonus or suggest a yearend bonus in the offer I include it in the invoice.
I still receive 1/3 of the total anticipated annual salary. Every company I do business with knows it up front, if they don’t want to pay it I am happy to suggest they go elsewhere, I also only work on exclusive or retained engagements. If the company is serious, I am very serious; if they are not serious then I very comfortable to walk away from their business. But as 90% of my work is referred to me I really don’t have many fee problems. I still enjoy cold call marketing so I find the fee discussions more intense in those situations. I am still happy to be able to say no thanks and walk away from business.
I have had my firm since 1993 – changed it to an LLC in 2009 and still run my practice with the same values that I did in 1993 and continue to make friends with corporate attorneys, partners in public accounting and commercial bankers and others that I believe can and will refer business to me and that I can return the favor to them. Networking at its best – believe it or not I learned the networking trade-off from the president of one of the banks I worked at. He always said that you are viewed as more valuable when someone else tells a potential client to use your service than when you try to sell it to them. It works.
OK. This is my last Blog about getting into the recruiting business and starting my own firm!