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Planning
for Your Departure When Changing
Companies When
you've been in the commercial real
estate brokerage business long enough,
you can almost count on changing
companies one or more times throughout
your career. In some ways it even reminds me of what
I experienced one time years ago when
playing in a golf tournament with a a
lot of Major League Baseball
players... I grew up playing a lot of sports as a
kid and a teenager in Santa Monica,
California, and two of the guys I grew up
playing with and going to school with
both ended up played Major League Baseball for 14
years...Tim Leary and Pete O'Brien. I
was fortunate to be invited as Tim's
guest to play golf three years in a row
at a tournament at Pebble Beach
featuring Major League Baseball Players
and their guests, and for me I really
felt like a kid again being surrounded
by and
playing with all of these athletes who I
greatly admired. During
one of the rounds Tim and I were paired
with a young man who had just completed
his first year of playing Major League
Baseball, and Tim had just completed
playing his 12th season at the time. And
when the young man was amazed at how
many players Tim knew and exchanged
greetings with during the day, compared
with the relatively few players the
young player actually knew himself he
said,
"Tim, how is it that you know so
many players and I hardly know any of
them?" And Tim responded with,
"When you've played in the Major
Leagues 12 years and have been traded to
as many different teams as I have, it's
really
easy to get to know a lot of these people." And
such is the case with your career in
commercial real estate also. When you
change companies you get to know a lot
more people simply because you've been
surrounded by them in the offices you've
worked in over the years. But problems can sometimes
develop when leaving a company that you
never planned on or ever imagined when
you first joined the company. Oftentimes
brokerage company broker-agent agreements call for
the company to be entitled to keep
"reasonable" amounts of
your normal net commissions on any
transactions of yours that close after you leave
the company. This is oftentimes written
into broker-agent agreements based on
the theory that you'll no longer
actually be working on these deals after you leave
the company, or at the minimum someone
else from the old company will be
working on these transactions along with
you. Now
in reality, when an agent leaves a company
he or she is often still the only person
working on the transactions they
generated before leaving the company all the way
up through their closing. And no one in
the agent's old brokerage company is
doing any work on these deals at all. But
sometimes the old brokerage company
decides they're still entitled to reduce
the commissions they'll pay the departing
agent anyway after these deals close, and this is where bad
blood can really begin to develop
between an agent and their old firm. (I've
oftentimes wondered about the legalities
of an agent continuing to work on
transactions on behalf of their old
brokerage firm while now having their
license on board at the new company. But
this still continues to be a
normal practice in our industry today.) I'm
bringing all of this up because two of
my coaching clients are currently
experiencing these problems with the companies
they used to work for. The companies are
taking big bites out of the agents'
normal commission splits on deals that
are closing after the agents have left
these firms, and the agents are very angry about it. And of course no
one at the agents' old companies have
done any work on these transactions at
all to help them to close. With
this in mind I think it's a good idea to
make sure all of this is handled in advance when
you're negotiating you're
broker-salesperson agreement before you
join a new firm. This will probably be
relatively easy to do because the firm
really wants you to come on board with
them, and everyone's thinking you'll
probably never leave the new company at that moment in
time. So
you may want to negotiate a contract
stating that if and when you leave the
company,
you'll continue working on any deals you
have in progress, and your
commission split on those deals will
remain exactly the same as it always was
when you were working with the company.
Or, if you find it reasonable and think that you
should be paid a reduced commission on
these transactions after leaving the
company, you may want to spell out the
exact amount of commission reduction
you'll be facing on these deals. It's simply unfair to allow the company
to utilize their own discretion in these
matters, as sometimes the manager who
has lost you as an agent can feel
justified in keeping a greater share of
your commissions from these transactions
after you've gone. Sometimes it can be
their way of compensating themselves for
their
displeasure at seeing you leave. So
do a little advance planning on this
ahead of time, and if you ever end up
leaving another company in the future,
you'll be much happier that you
negotiated these terms and conditions at
the time you first joined the company. 
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