Dear Mr. Dukes,
Here is how it works with Brokers. I have been one for years, so I speak from experience.
Years ago, the majors all had their field landmen as employees. When projects grew to the degree where they needed additional help, they hired independent landmen, who reported to the head field broker (or his delegate) who was the company employee.
As to smaller independents, they never had field landmen as employees. If they had a project, they hired independent landmen, who reported to the inhouse landman.
In about the mid 1970's, the broker concept began to take off. The majors began not hiring anymore field landmen as employees and did not use the field landman job as a training position prior to moving inhouse to a desk. Having field landmen as employees was just too expensive. The industry has typically been one of eating chicken or eating feathers. When it is in a downturn, the companies had to lay off the field employees or have them sitting around staring at each other.
I know of very few brokers who actually hire field staff. Most do as I do, treat them as associates in the nature of independent contractors.
A client will call a broker and tell him (not sex descrimination, but most brokers are men) that he has a "ticket" for him and send him the particulars. The brokers assembles a crew (which could be a few as one or two contractors) to go get the work done. The office landman only has to deal with one person, the broker, rather than numerous independent landman. In this way, the broker is acting in the role of a manager for the company landman, buffering him and sending reports as to progress, etc.
The broker makes his money just like a lawyer. His associates send in invoices based on billable hours, or days, with expenses. The broker takes that invoice and adds a head charge per hour or per day and passes through the expenses. Any time the broker spends on the job, he puts that on the invoice as well.
It is RARE for a broker to work on commission or have incentives. Sometimes a bone will be tossed if he does an outstanding job, but that is much the exception rather than the rule.
Being a field landman or broker can be rewarding financially. Typically, contractors for a broker make a decent living, but that is about it. Their pay varies depending on experience and demand and region of the country, but most make between $300-$400 per day. That, on the high end, is about $100K a year, if they work every day. No benefits, no retirement, no medical. When things are tough, such as the last half of 2008 and all of 2009, they may have no work at all.
The broker system in my opinion is broken. There is too much incentive to be dishonest. For example, if the broker is running 40 landmen and he adds 1 day per month for each one over what they actually worked, he is unjustly profiting by $16,000.00 per month. That is in addition to the head charge of $25-$100 per day of more he is making anyway. It is very difficult for a company to catch a crooked broker, particularly if he rewards his company landman with fishing trips, strip bars, etc.
In a nutshell, that is the broker system.