Dear Nancy: Is it customary when you work with a court reporting firm that you sign a contract with them, especially if it has a no-compete clause involved? What is a customary or average split with a court reporter? I want to be more informed and need some guidance. Signed, Newbie to Business
Dear Newbie to Business: If I’ve learned anything in the last three decades, it’s that reporter/firm owner relationships are as varied as love relationships. Look around at the lovers you know. Some jump from lover to lover looking always for that new excitement that comes with new beginnings; some couples live together but scoff at the need for a marriage license; some will ignore trouble signs and heedlessly walk down the aisle; some fiancés will avoid the stress of it all and elope; still others sign prenuptial agreements to protect themselves should anything go wrong in the marriage.
Think of your agency relationship as a love relationship. What kind should it be? Many firm owners will ask that you sign a contract. Think of it as a pre-nup, there to protect you and the agency, clarifying the details of your work relationship from the start. The contract is there for tax reasons as well. Firm owners must be very careful to classify their reporters correctly or risk government fines or penalties.
A good contract will specify whether you’re an employee or an independent contractor, the agency/reporter split on billings, terms of payment (i.e., 30 days after invoice, upon payment to the agency), the non-compete expectation, to name just a few. Ask for the names of the senior reporters in the office; make that request a part of accepting work from a firm. It’s those long-time reporters who can paint the best picture of what it’s like to work with that agency. I happily give those references to prospective reporters coming to my firm.
As to a customary reporter/agency split, in my locale the norm is 70/30, but I’ve seen 80/20 and 50/50 splits. Why the disparity? It depends on what services the agency provides. Is proofreading or production included, are you paid “up front” on your billings, are you offered reduced or preferred percentage splits based on your respective lack of experience or advanced credentials? Commission structures are as varied as wedding gowns. Find one that fits and “Make it work,” as Tim Gunn likes to say.
It’s never too soon to develop a professional relationship with an attorney and an accountant. Yes, I do mean both at the same time. I said professional relationship! And keep it that way or I’ll be advising a relationship with a shrink! Ask your advisors to review how your finances are organized and help you with legal contracts before you regret a poor decision. Utilize their services to get all your affairs in order. When you’re done, answer this: Why don’t melons get married? (Answer: Because they cantaloupe.)