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Clients asking for an annual commission?
Thread poster: Rebecca Reid

Rebecca Reid
United States
Local time: 14:58
French to English
Mar 10, 2020

This is my first post on here. I'm a French-English translator, British but working from the USA.
I'm interested in knowing if anyone else has come up against this situation. In a nutshell, I've been working for one client - a large company in the service field - for 20 years now and have really good relationships with their staff. However, in 2012 they came up with a "new scheme"... They created a group of "preferred service providers" of which I was one, and we had to sign a contract. Sa
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This is my first post on here. I'm a French-English translator, British but working from the USA.
I'm interested in knowing if anyone else has come up against this situation. In a nutshell, I've been working for one client - a large company in the service field - for 20 years now and have really good relationships with their staff. However, in 2012 they came up with a "new scheme"... They created a group of "preferred service providers" of which I was one, and we had to sign a contract. Same rates as before except now we had to pay back a commission on the amount of business they "brought" us each year. It was 2% or 3% depending on the amount of revenue. I wasn't too happy about this because I was already making a lot of effort for them (hadn't raised my rates in 10 years at that point), but that sounded like a small percentage so I signed. Then I started getting the demands for "remuneration" the following year at a time when I was already dealing with income tax, real estate tax etc. etc. Anyway, I paid it for maybe 3 years and then they stopped asking. I thought thank heavens and figured maybe it was because of a new government law that meant they had to pay me within 45 days, which had previously been one of the "bonuses" I got for being a preferred provider.

Well, one month ago they bounced back wanting me to send them $550 euros that I "owed" them for 2019. I got up the courage to write back and say no: that I hadn't changed my rates since the transition to the euro, didn't charge for weekend/night work, gave them a special volume discount, and it just wasn't possible for me to pay them a commission without raising my rates to reflect the fact that it is now 2020. I haven't heard from them since. They're one of my biggest clients but I just couldn't be ripped off like this anymore (I know they're adding their own "margin" to my translations as well as this commission). I know my contacts there want to work with me, this is coming from one woman in the administration.

Has anyone come across this type of "commission" system before and what do you think of it?
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Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
How about we all stopped accepting abusive practices? Mar 10, 2020

Why on earth did you accept it in the first place? Such vultures do this because they can get away with it. I’m flabbergasted.

Robin LEPLUMEY
Oleksandr Ivanov
Walter Landesman
Jorge Payan
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Hedwig Spitzer
 

Lincoln Hui  Identity Verified
Hong Kong
Local time: 03:58
Member
Chinese to English
+ ...
Absurd Mar 10, 2020

I can only guess that they brainstormed ideas to increase revenue, and someone (possibly from outside) came up with this idea, and it apparently works since you agreed to go along with it for multiple years.

I don't think anyone would say it's wise to continue working with such a company. The amount they're asking is less important than how disingenuous they seem to be in their dealings. I think there are definite signs that there will be trouble down the road. It's an uncomfortable
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I can only guess that they brainstormed ideas to increase revenue, and someone (possibly from outside) came up with this idea, and it apparently works since you agreed to go along with it for multiple years.

I don't think anyone would say it's wise to continue working with such a company. The amount they're asking is less important than how disingenuous they seem to be in their dealings. I think there are definite signs that there will be trouble down the road. It's an uncomfortable tumor, but you will bleed if you cut it out, because you missed the opportunity to reject it when it was first brought up.

It's a huge violation of principles that does very little in terms of actual damage - less than half a cent off a per word rate. I think it's entirely absurd, but I don't know if you would be better off if you cut ties with them than if you continued to take it.
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Walter Landesman
Chris Foster
Dan Lucas
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Teresa Borges
Inge Meinzer
 

Jean Lachaud  Identity Verified
United States
Local time: 14:58
English to French
+ ...
Predictable Mar 10, 2020

I have repeated for at least a decade that the profession was moving toward having to pay to work.

This is it.

The good side of the story is that, most likely, History will remember your name.


Oleksandr Ivanov
Jorge Payan
 

William Tierney  Identity Verified
United States
Local time: 14:58
Member (2002)
Arabic to English
What will the ATA do about it? Mar 10, 2020

Dear Rebecca,

Are you a member of ATA? If so, please let them know about this and see if they do anything about it.


 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
Milgram experiment Mar 10, 2020

It reminds me of the Milgram experiment, in which the willingness of study participants to obey an authority figure who instructed them to perform acts conflicting with their personal conscience was measured. Participants were led to believe that they were assisting an unrelated experiment, in which they had to administer electric shocks to a "learner". These fake electric shocks gradually increased to ... See more
It reminds me of the Milgram experiment, in which the willingness of study participants to obey an authority figure who instructed them to perform acts conflicting with their personal conscience was measured. Participants were led to believe that they were assisting an unrelated experiment, in which they had to administer electric shocks to a "learner". These fake electric shocks gradually increased to levels that would have been fatal had they been real.

In this case, the translator is not directly harming others but only herself, but it is indeed a case of letting authority figures impose unethical conditions.

Making people pay commission when the agency already takes a large cut of the turnover before tasks are handed over to translators looks like a psychopathic way of exploiting human weakness and the fear of saying no.
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Oleksandr Ivanov
Walter Landesman
Jorge Payan
Dan Lucas
Sheila Wilson
ahartje
Christophe Delaunay
 

Rebecca Reid
United States
Local time: 14:58
French to English
TOPIC STARTER
Well... Mar 10, 2020

OK hold on... It wasn't "absurd" for the reasons expounded below.

Thomas, I think it's a bit facile to mock, thank you for comparing me to the subjects in the Milgrom Experiment. Lucky you, if you can refuse any "deal" that isn't 100%. Fact is, I really struggled over signing the thing and it took weeks of "relances" from them for me to send it back in.

This is my biggest and oldest client (it's not a translation agency, it's a well-known international marketing resear
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OK hold on... It wasn't "absurd" for the reasons expounded below.

Thomas, I think it's a bit facile to mock, thank you for comparing me to the subjects in the Milgrom Experiment. Lucky you, if you can refuse any "deal" that isn't 100%. Fact is, I really struggled over signing the thing and it took weeks of "relances" from them for me to send it back in.

This is my biggest and oldest client (it's not a translation agency, it's a well-known international marketing research company). The idea was that they would give their preferred service providers more work, so the commission would be covered. That hasn't happened (notably due to a switch from translation to "please proofread my terrible English and make it sound like it was written by an English speaker, for 1/10 of the cost of a translation"). Maybe some of you are able to brush off your biggest client and tell them to get lost (which I finally did last week and I'm not sure how this is going to impact my income, but yes the "tumor" analogy is spot on), but it's a huge hit for me if they stop giving me business. There are several other translators on their "preferred" list, for English and the various other languages they work with, who also agreed to sign it, probably for similar reasons. The fact is, now that I dropped out, they're still there. I wish I knew who they were because I would have reached out directly years ago and we could possibly have blocked the whole thing. And not just translators either. ALL their service providers (graphic artists, freelance interviewers, etc.) had to sign this thing.

I'm not a member of the ATA. Maybe I need to be though?

Anyway, I really wanted to know if anyone had ever even heard of this before. Now that I've said my piece to the admin department, I plan to reach out to my individual contacts within the company and try and undercut it.

But this is apparently a "thing" so it might be useful to know.

[Edited at 2020-03-10 20:55 GMT]

[Edited at 2020-03-10 20:56 GMT]

[Edited at 2020-03-10 21:05 GMT]

[Edited at 2020-03-10 21:05 GMT]
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Jessica Noyes
dkfmmuc
Andy Watkinson
 

Samuel Murray  Identity Verified
Netherlands
Local time: 20:58
Member (2006)
English to Afrikaans
+ ...
You appear to be in arrears Mar 10, 2020

Rebecca Reid wrote:
They created a group of "preferred service providers" of which I was one, and we had to sign a contract. Same rates as before, except now we had to pay back a commission on the amount of business they "brought" us each year. It was 2% or 3% depending on the amount of revenue. ... I paid it for maybe 3 years and then they stopped asking. I thought thank heavens and figured... [I no longer had to pay the commission].


The fact that they stopped asking you to pay the money that you had promised to pay them does not mean that you no longer owe them that money. It is annoying and frustrating when this happens, but failure to collect money does not mean the money is not owed.

I don't know what that contract says, though. Does the contract last indefinitely? Can you cancel the contract? What is the procedure for continuing to work for them but without having this contract in place?

By the way, does $550 sound like 2-3% of the business that they brought you?

I got up the courage to write back and say no: that I hadn't changed my rates since the transition to the euro, didn't charge for weekend/night work, gave them a special volume discount, and it just wasn't possible for me to pay them a commission without raising my rates to reflect the fact that it is now 2020.


It is quite appropriate for you to attempt to negotiate some kind of discount on the payment of that money, but you should not take their silence as acceptance or agreement of what you wrote. You should really have written all of these things to them at the start of 2019. This is analogous to a client telling you afterwards that he believes he doesn't have to pay you for some or all of the work that you did, because of various reasons that he knew about before he gave the go-ahead.

I understand it can be frustrating to owe money for 2019 that you don't have, and I understand your argument about raising your rates in 2020 to pay a debt that was owed in 2019, but you should have put that money aside and not used it.

I know my contacts there want to work with me, this is coming from one woman in the administration. ... Has anyone come across this type of "commission" system before and what do you think of it?


This type of "commission" is absolutely not normal. Agencies take their commission from the difference between the money they get paid and the money that they pay their translators. The "commission" is already included (or... excluded) in the rate that they pay you. If the PMs or other staff want to earn bonuses, the bonuses are paid to them by the accounts department from the money that is not paid to translators. There is nothing normal about paying money to translators and then asking the translators to pay some of it back again, under any guise.

If I had been offered to work under this "commission" system, I would have suspected that this might be something organised by one of the departments, without approval from the top. I wonder if this agency's bosses know about this scheme. Perhaps write a firm but polite message to them to voice your sad disappointment with the scheme (do not make it sound like you're accusing anyone, or ratting out anyone).

By the way, do you still have the invoices that they sent you for the previous years? I'm not talking about the invoices that you sent to them, but the invoices that they sent to you (for, after all, if you were to pay them a commission, they should have invoiced you for it, right?). If not, can you write to their accountant to ask for copies of those invoices (perhaps say that you need it for tax purposes)? I'm just wondering if this money forms/formed part of their usual business cash flow or if it remained off books.

PS. I wrote my post before I saw your second post.


[Edited at 2020-03-10 21:31 GMT]


Rebecca Reid
Hedwig Spitzer
Tina Vonhof
Rita Pang
Philip Lees
Teresa Borges
Laura Kingdon
 

Jean Lachaud  Identity Verified
United States
Local time: 14:58
English to French
+ ...
Why the ATA? Mar 10, 2020

What could ATA possibly do about a contract between two independent entities?

 

Rebecca Reid
United States
Local time: 14:58
French to English
TOPIC STARTER
Arrears.. Mar 10, 2020

Thanks for that input Sam.

First off they never sent an "invoice" - they would just send me an amount due on the previous year which I would check against my records. I don't think that this is shady practice on the part of one individual in admin, but who knows... This is a big company and they do have this big deal over their "preferred partners"...

When I responded last week, I explained my various objections. I told them that if they wanted me to work with this co
... See more
Thanks for that input Sam.

First off they never sent an "invoice" - they would just send me an amount due on the previous year which I would check against my records. I don't think that this is shady practice on the part of one individual in admin, but who knows... This is a big company and they do have this big deal over their "preferred partners"...

When I responded last week, I explained my various objections. I told them that if they wanted me to work with this contract, they would have to renegotiate the terms with me with increased rates and a surcharge for weekends. I imagine no one ever sticks with the same rates if they work with a client for years, contract or no contract.

The fact is that they dropped the ball completely for 4 years (which is why I didn't react in 2019). In the meantime, French legislation changed, with the consequence that one of the big "bonuses" they were offering in return, i.e. "early payment" (if you've worked with French companies you will get why that was a big deal) had now become standard practice. I never refused to pay them the 550 euros (did I say dollars? and yes it did represent 2%), I just said "where have you been for the past 4 years?" and "I'm not doing this on that basis anymore" (but not quite so curtly).

I think you're right and I need to write directly to the top management I work with. They're quick to email me if they need something suddenly done on a Friday afternoon for Monday....

I think it's still possible to work with them as a "non-preferred partner." It just means I won't be on the "list" for new staff, but I do have my existing contacts among the existing staff.

If I do end up having to pay them the €550, I'll send it in the form of 6 US checks so half of it will get lost in the check commission. "La vengeance est un plat qui se mange froid"
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Rebecca Reid
United States
Local time: 14:58
French to English
TOPIC STARTER
ATA Mar 10, 2020

Jean: maybe it's just a case of people knowing that this is being tried by some companies, and to be prepared for it.

 

Thomas T. Frost  Identity Verified
Member (2014)
Danish to English
+ ...
No mocking Mar 10, 2020

Rebecca Reid wrote:

Thomas, I think it's a bit facile to mock, thank you for comparing me to the subjects in the Milgrom Experiment. Lucky you, if you can refuse any "deal" that isn't 100%. Fact is, I really struggled over signing the thing and it took weeks of "relances" from them for me to send it back in.


I absolutely did not mock or intend to mock you. But I can see a psychological parallel to that experiment. The thing is that nearly all of us are brought up by parents and schools to obey authority and that many of us find it hard to be assertive and stop obeying orders, not least since being an employee means one still has to obey orders as an adult. Some people (the ones I called psychopaths) know how to abuse that human weakness.

If you think I'm swimming in gold, you're mistaken. But I absolutely refuse to work for anyone that takes advantage of me in such ways. I know it's a gamble to decline such terms. You cannot predict if they'll dump you. But once they know you're willing to accept abusive terms, they'll keep trying. You cannot negotiate if you're not willing to walk away.

Rebecca Reid wrote:
The idea was that they would give their preferred service providers more work, so the commission would be covered. That hasn't happened (notably due to a switch from translation to "please proofread my terrible English and make it sound like it was written by an English speaker, for 1/10 of the cost of a translation")


I'm not the surprised. Shysters that dream up that sort of scheme would never lose sleep over screwing others.


Rebecca Reid
Sheila Wilson
Rita Pang
Philip Lees
Christophe Delaunay
Teresa Borges
 

Chris S  Identity Verified
United Kingdom
Swedish to English
+ ...
Is this actually so terrible? Mar 10, 2020

It just seems to be a form of volume discount which is pretty standard in any business?

I should perhaps add that I myself don’t do volume discounts. But then I am a bit of a diva.


 

Rebecca Reid
United States
Local time: 14:58
French to English
TOPIC STARTER
Volume discount... Mar 10, 2020

[quote]Chris S wrote:

It just seems to be a form of volume discount which is pretty standard in any business?

Right, and then the volume never happened, LOL.


 

Peter Shortall  Identity Verified
United Kingdom
Member
Romanian to English
+ ...
The importance of having a broad client base Mar 10, 2020

In answer to your original question, no, I hadn't heard of it. But as Chris S points out, it could be viewed as a form of volume discount. And it's one that could effectively be cancelled out by increasing your rate to whatever level is necessary to compensate for it, so you could get around it that way (and after all, you did say you hadn't put your rate up for years). For that reason, I don't think it's something to get enraged about, as it can be counterbalanced. But putting your rate up, of ... See more
In answer to your original question, no, I hadn't heard of it. But as Chris S points out, it could be viewed as a form of volume discount. And it's one that could effectively be cancelled out by increasing your rate to whatever level is necessary to compensate for it, so you could get around it that way (and after all, you did say you hadn't put your rate up for years). For that reason, I don't think it's something to get enraged about, as it can be counterbalanced. But putting your rate up, of course, brings the risk that you may no longer be regarded as a "preferred supplier".

You say that they've asked you for the money for 2019, but what about the years immediately before that, did you pay nothing for some of those? If so, you did well to escape the scheme for a while!

I think in the end, it boils down to a question of where you want to draw the line when clients want to pay you less. It's a common strategy in business to make changes to terms that are likely to meet some resistance on a small scale at first, to make them less unpalatable (as you say, "it sounded like a small percentage so I signed"), and then increase the changes gradually in small steps, each of which seems just about acceptable as it doesn't represent a dramatic shift by comparison with the previous arrangement. One party gradually takes more and more, and the other keeps giving more and more. The question is, when do we say no and risk having the rug pulled out from under us completely? Unfortunately, we're not in a very strong position in that situation. But at least in your case, they haven't increased the percentage over the years if I understand correctly, so things could have been worse.

To reduce our vulnerability in situations like this, it's important for us to have the ability to walk away by having a broad client base and trying to fit in work from new clients whenever the chance arises, so that we can afford to say no to clients whose terms become unreasonable.

I know that's easier said than done, because if one client offers you lots of work, it's hard to say no to the money it brings in. And I say this as someone who used to earn about 40% of my income from one company in recent years (yes, I know, not wise!) But a balance makes us more resilient to the unwelcome changes that life throws at us from time to time. Unfortunately, even long-lasting and solid business relationships can suddenly turn bad when a new person or manager comes along, that's all it takes sometimes.
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Rebecca Reid
 
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