Call it a referral fee, kickback, or "thank you" but ever since I got into the industry I've had to deal with these little moments. Now don't get me wrong, I have no problem paying someone or another company a commission on referring my landscape lighting company. However, I do have a problem when that person is directly involved in the project and retaining our services. It doesn't make me feel warm and fuzzy when the architect, builder, general contractor, landscape architect, or landscape designer says "we'd love you to do the landscape lighting...how much will I get?"
Let me explain how the situation typically works. The architect, builder, GC and the homeowner predetermine fees for their responsibilities. Say a builder negotiates a 18% management fee for all his subcontractors, subcontractor sends an invoice, builder marks up the invoice 18%, and owner pays the invoice. Now say the builder also takes a kickback from the subcontractors, typically 10% of the invoice directly from the subcontractor. Now the builder is making almost 30% and the owner has no idea. There is nothing wrong with the builder making a "management fee" for all the subcontractors due to all the scheduling and time in meetings to coordinate the job, but it shouldn't be under the table.
Thankfully, having my own company, I can choose to just not work for that individual or job...and I have. In fact, I can honestly say that I have never paid a professional "kickback" in my career. It's just not worth opening that door.
I've found one way around the situation is to be directly retained by the owner. Most of the time, architects, builders, and GC's don't include the outside package (landscaping, irrigation, drainage, landscape lighting, etc.) in their scope of work and allow the owner to contract it directly. This saves the owner considerable dollars that can be applied directly to their project. The problem is owners retain the services of a landscape architect or designer who then includes the landscape lighting in their scope of work. Why is this a problem you may ask? Most landscape architects and designers don't have in-house professionals that can and do high-quality landscape lighting design. So they sub it out to companies, like myself, and then mark-up the proposal their 18-20%. It just never ends.
In the end, the owner is much better served by retaining the services of a landscape architect or designer completely separate from a landscape lighting company. This way all the money the owner spends is being directly applied to their end product.
It's a tough game to play but over the years, I've learned who to work with and who to stay away from. There are a lot of really great professionals out there and it's not worth the risk of having your name associated with these types of dealings.
E2 Illumination Designs is a design-build landscape lighting company focused on bringing the finest landscape lighting design and construction to wherever our services are valued. Please contact us if we can assist you in your project.