Once you've agreed to refer a lead to another agency, the next step is simple and often skipped: put it in writing. A referral agreement doesn't need to be long or formally drafted by a lawyer, but it does need to cover six things. Miss any of them and you'll find out why they matter at the worst possible time — when there's money on the table and a disagreement about who's owed what.

1. Which client is covered

The agreement needs to name the specific lead — or describe the category of leads if this is an ongoing arrangement — clearly enough that both parties know whether a given client is in scope.

This sounds obvious until the closing agency starts working with another contact at the same company, or gets a referral from a mutual connection and claims that lead was already theirs. Defining the covered client by name, company, and ideally the date you provided the introduction closes that gap.

If you're referring a stream of leads rather than a single one, define the parameters: geography, campaign, time window, or lead source. The narrower and more specific, the fewer disputes.

2. When the fee is earned

This is the most common source of referral disputes, and it's almost always because nobody defined it upfront.

The three plausible trigger points are:

When the proposal is sent — rarely appropriate; puts the referring agency's fee at risk if the deal never closes
When the deal is verbally agreed — better, but "agreed" is ambiguous and unverifiable
When the first invoice is paid — cleanest, because it's a verifiable event with a clear date

Pick "first invoice paid" unless you have a good reason not to. It ties the trigger to an objective event both parties can confirm. Anything earlier relies on the closing agency's word that the deal moved forward, which is exactly the trust you're trying to avoid needing.

The agreement should also address what happens if the client pays in installments, or pays a deposit and then the project stalls. Define whether partial payment triggers a partial fee or whether the full fee only vests on completion.

3. What the fee actually is

Once you've worked through what the right fee structure looks like — flat finder's fee, percentage of first payment, or recurring revenue share — the agreement is where that structure gets locked in.

Write out:

The exact percentage or dollar amount
What it's applied to (gross contract value, monthly retainer, first invoice only)
The cap, if any — for example, revenue share capped at 12 months of MRR
Any exclusions, such as third-party ad spend or pass-through costs

Vague language — "10 percent of the deal" — is not binding because "the deal" could mean the first payment, the first year, or the entire client lifetime, and all three interpretations are defensible. Spell it out.

4. How long the fee runs

For one-off project referrals, this is trivial: the fee runs until paid, then it's done.

For retainer deals, the duration of a recurring revenue share needs to be explicit. A common range is 6 to 12 months from the client's first payment. After that, the closing agency owns the relationship completely.

You also need to address what happens if the client cancels and re-engages later. A reasonable clause: the referral fee covers a contiguous engagement only — if the client goes inactive for more than 60 days and returns, the original referral agreement no longer applies.

Without this, a referral from two years ago could theoretically still entitle the referring agency to a cut of new work — a hard position to dispute if the agreement is silent.

5. Non-circumvention

Non-circumvention is the clause that addresses the specific fear behind most agency referral agreements: the closing agency builds a relationship with the client and eventually restructures the deal in a way that eliminates the referral fee.

What the clause prevents is the closing agency approaching the client through alternative channels during the fee period in order to move the engagement off the original terms. It does not prevent them from continuing to serve the client after the fee period ends — that's the expected outcome and a legitimate one.

A well-written non-circumvention clause:

Covers the referral fee period specifically, not in perpetuity
Names the specific client or class of clients in scope
Prohibits renegotiating the engagement in a way designed to sever the payout obligation
Doesn't create an unreasonable general restraint of trade

What it cannot do is guarantee the client stays with the closing agency, or require a client to continue an engagement they want to exit. Non-circumvention is a constraint on the closing agency's behavior, not the client's.

The lead-sharing agreement template includes a standard non-circumvention clause that covers the fee period without overreaching.

6. Dispute resolution

You don't need a full arbitration clause. You do need a sentence that says what happens when the two parties disagree.

At minimum: the governing jurisdiction (which state or country applies), and whether disputes go to binding arbitration or court. For deals under a few thousand dollars, small claims often works. For larger deals, arbitration is usually faster and cheaper than litigation.

If you've agreed to 10% of MRR on a $3,000/month retainer and month three's payment doesn't arrive, knowing whether you're sending a demand letter or filing a claims form makes the follow-up substantially cleaner. "We'll sort it out" is not a plan.

What to use

For a one-off referral between two agencies you already know, the lead-sharing agreement template covers everything above in plain language — no legal fees required for a single deal.

For recurring arrangements — where you're routing a stream of leads regularly, not just once — the manual agreement process gets tedious fast. Every new lead means revisiting the terms, re-signing, and tracking payouts by hand. How agencies share leads and split revenue covers the alternative: a structured arrangement where terms are set once, routing is automatic, and payout tracking is built in.

If you're still working out the right fee structure, the referral fee benchmarks give actual ranges for flat fees and revenue share, with the maths on what each pays out over a 12-month retainer. The revenue split calculator does the arithmetic once you've picked a structure, so you can see exactly what each party earns.

The practical minimum

If you're sending a lead this week and want the minimum viable protection: write down the client name, the fee structure, the trigger event (first invoice paid), the cap duration, and a non-circumvention sentence. Get both parties to reply "agreed" to an email thread that captures all of it. That's not a perfect agreement, but it's the difference between a handshake and a record.

If you're still working out whether to refer the lead at all — versus routing it through a network or taking other options — the breakdown of what to do with leads you can't service covers all four paths with honest trade-offs.

The agreement template takes about ten minutes and tends to be worth ten times that if something goes sideways.

What a marketing agency referral agreement actually needs