Chip Owen COO, Americas Jones Lang LaSalle

Salaries vs. Commissions... Can you name a provider of the full range of sales, leasing, and management services whose professionals are all compensated on the basis of a salary and bonus -- not commissions? Hmm. It's a pretty short list. Right? Just Jones Lang LaSalle, I think. So will salaried agents someday become Social Convention? (See last week's Deviant's Advantage Dispatch, September 24.)

Visiting Chicago last Tuesday, I had lunch with Chip Owen, COO - Americas of Jones Lang LaSalle, at the Mid-America Club on the 80th Floor of Aon Center. (Wow, great views.) Currently serving 120 core clients, Jones Lang LaSalle develops individual client plans for each, including KPIs (Key Performance Indicators). For example, a KPI might be average rent per square foot paid across a portfolio. Clients then pay a base fee, depending upon the type of service provided, and an additional fee based upon the results of the KPIs.

Jones Lang LaSalle compensates its professionals with salaries and bonuses, based upon meeting their individual goals and objectives, which are aligned with their clients' plans and KPI metrics. Thus, everybody is similarly motivated to achieve both client goals and personal compensation goals. Sounds simple, right? No way. Administration of a salary and bonus system requires greater management effort than the traditional commission-based brokerage arrangement.

And my guess is that most companies don't have the financial resources or the management muscle or the motivation to implement a salary and bonus compensation system. After all, the historical commission-based model has served the industry pretty well. So why change? Which leaves Jones Lang LaSalle alone to build its "recognized, differentiated, global brand covering 100 markets worldwide." In the future, will more owners and tenants prefer salaried agents? What do you think?

PikeNet Forum 2003... Mark your calendar for the next PikeNet conference on April 2-3, 2003. Yes, we're finally coming to Chicago!

--Peter Pike