We’ve recently learned that some GIPS(R) verifiers have both their clients and employees in handcuffs. And, to this we have a simple question: why?
Handcuffing GIPS verification clients
A number of firms have expressed interest in switching their verifications to TSG. There are several reasons for this, including:
- We only use senior level verifiers (avoiding clients from having to teach their verifiers about GIPS and performance measurement).
- We avoid turnover (meaning clients won’t have to answer the same questions every year).
- We do remote verifications (meaning they’re much more efficient).
- We get the job done in a timely manner (our preliminary reports are typically delivered on the last day we’re at our client’s offices, or very shortly thereafter).
- We provide our clients with a proprietary GIPS Orientation Kit, to assist them with both achieving and maintaining compliance.
But, their verifier has handcuffed them with a contract of one or more years, which restricts their ability to change verifiers.
TSG does not handcuff our clients: they are not obligated to retain us if they choose to discontinue our services. We feel that if they want to leave, they should be able to, no strings attached.
We are currently thinking of hiring a new verifier. And, it only makes sense to consider someone from a competitor. However, some verification firms handcuff their employees with non-compete agreements, which restrict their ability to work for another verifier.
Now, the reality is that these agreements typically are not dependable. The main reason is it’s a restraint of trade: they restrict someone from continue to work in a profession they’ve developed expertise in.
That said, the verification firm usually has deeper pockets than the employee, meaning that if the individual leaves and joins a competitor and is then sued by their former employer, they will have to hire an attorney. And even if they win, the court costs and attorney fees can be high.
But is this fair? We think not. We do not have non-compete agreements with our staff.
And so, simple question: why?
Why do some verification firms resort to handcuffing their clients and employees? As noted above, we do neither! Are we being foolish or fair?
Why do the clients agree to sign such documents? Why do employees?
Okay, the answers to these last two questions are probably pretty obvious, but, it’s still unfortunate.
Care to chime in? Please do!