"Maverick" Cowboy Hat

Range Wars... The October 1 Dispatch, Jones Lang LaSalle Marches to a Different Beat, about salaries versus commissions generated dozens of e-mail comments. As Chris Peacock, CEO of Jones Lang LaSalle, called to my attention, the traditional U.S. commission-based compensation system stands virtually alone in the world. Most other countries base compensation on the British
Chartered Surveyor model in which trained real
estate professionals are paid salaries and bonuses.

Many readers pointed out that there are a number of salary-based corporate services firms, including USI (United Systems Integrators), U.S. Equities, and WorkPlaceUSA. Likewise, there are regional firms that are salary-based, including Colliers Pinkard in Baltimore, Dillon Corporate Services/CRESA Partners in Dallas, Mohr Partners in Dallas, and Spaulding & Slye Colliers in Boston and Washington, DC. And, finally, the corporate services groups within some larger commissioned-based firms do receive salaries and bonuses, including CB Richard Ellis and United Properties in Minneapolis.

Is this the trend for corporate services? Could be. But there are a huge number of brokers providing these services at commission-based houses. As John Henderson with NAI MLG Commercial in Brookfield (Milwaukee), WI, wrote, "My observation is that the true professional does what is right for the occasion. Commissions on typical transactions are fine and are needed to incentivize the deal. Many times however, I find that flat fees for putting together a build-to-suit deal or a lease due-diligence assignment are much more appropriate. There are many times when all that is needed is good advice and generally that is provided as part of the relationship."

However, several readers hailed the demise of commissions as a necessary step for the industry to align the interests of service providers and corporate clients. My guess is that much will depend upon the individual circumstances of a transaction, and there are lots of shades of gray. The American "cowboy" (I say this affectionately) will be with us for many years to come.

--Peter Pike