Share fee

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A share fee is a special form of contingency fee. The term fee is used in service law for the remuneration of professional services. In the course of contract negotiations between the client and the contractor, the two parties deal with the basis on which the amount of the fee is to be determined and what form of fee should be included in the contract .

Definition of terms

A success fee is understood to mean any fee, the determination of which requires the measurement of success and the amount of which depends on the project goal. If the project objective is a transaction (business) , a share fee can be agreed accordingly. The fee is then measured as a proportion of the value of the transaction. The advantage for the customer company is that it only has to pay when the transaction takes place.

Fee forms

Time fee

The basis for the calculation of the time fee is the time used by the agent in the course of the project. The individual time unit, which can be hours, days or weeks depending on the agreement, costs a previously agreed price. The amount of the price per unit of time depends on the qualification, experience and know-how of the agent.

Flat-rate fee

If a flat fee is used, it is agreed that a certain amount will be paid for the processing of certain tasks. The amount to be paid is determined in the contract negotiations between the client and the contractor before the start of the project. The prerequisite for the use of a flat fee is that the task of the project can be clearly described.

Contingency fee

The success fee (pactum de quota litis) is understood to be a fee that is only paid if the agreed project goals are achieved. The basic idea is that the representative is remunerated depending on the success of the project or on his performance in the project. The use of a success fee therefore requires that the success of a consulting project can be determined.

The agreement of a success fee for legal activities is only permissible in Germany under the special requirements of § 4a RVG. In Austria the quota litis is immoral ( § 879 Abs. 2 Zi 2 ABGB ). The professional rules of lawyers in the European Union also prohibit it.

Functions of Share Fees

  • Remuneration of the commissioned company
  • Increasing the motivation of the contracted company
  • Linking the interests of the client and the agent
  • Assumption of responsibility by the commissioned company
  • Restriction of the fixed cost share of the consulting project
  • Risk limitation on the part of the client
  • Demonstration of the company's willingness to perform

Areas of application of share fees

Since, as mentioned above, the measurability of the success for the use of a share fee must be ensured, an important criterion is that a before-and-after comparison can take place. In this regard, share fees are increasingly used in the area of ​​optimizing material costs . Here an area can be delimited and its actual costs determined. After the optimization phase and the subsequent implementation process, a new cost situation results that can be compared with the actual costs. The difference from this results in the savings volume on which the fee can be based on a percentage.

Individual evidence

  1. Fleischer B. (2010): Use of success fees in management consulting. P. 52.
  2. ^ Kubr, M. (1996): Management Consulting. P. 566 f.
  3. ^ R. Heumann, F. Herrmann (2003): Management Consulting - Anatomy and Perspective of a Service Elite. P. 78.
  4. L. Switzerland, M. Rajes: contingency fees for consulting services. In: magazine for leadership and organization. 2006, pp. 320-324.
  5. ^ C. Kolbeck (2001): Future prospects of the consulting market. Cape. 3.2.
  6. 3.3. Quota litis agreement, professional rules for lawyers in the European Union