X percent of sales from now until end of time is too much?

I have a friend Z who has been acting as the middle-man between me and his clients. Z contributes to less than one percent of my business' revenue. The projects that Z refers usually amounts to $1k to $3k each. Z has a full time job with another company, so these referral/freelance assignments are by no means his main source of income.

About two years ago, Z referred person Y to me for a small project. Person Y himself is also a middle-man. So the relationship between my business and client X is

Me to Friend Z to Person Y to Client X

I haven't talked to Y since 2 years ago. Today, Y reached out to me via email and wants to work with me directly without involving Z. Unlike Z, Y performs his work as a sales lead generater and client manager on a full time basis. Based on some things Y mentioned in his email, it seems like the assignments he has are at least 20 times greater in budget than Z's projects.

A while ago, Z once said that if I do business with anyone in his network, he gets a 20% commission on all revenue from now until the end of time. I didn't respond to his request because I never had time to engage his network of contacts.

Now that Y has approached me, I think 20% commission on all sales to Z seems like a lot of money, especially when he does not contribute to the projects. If I agree to this, Z would make about $60k a year for doing nothing, which is almost as much as his salary full time job.

So my questions is, is 20% commission to Z from now until end of time considered too much? If it is, then perhaps I only give him a small commission on the first assignment from Y..even this is generous considering he doesn't even maintain relationships with Y. But Z is my friend after all.

If you haven't signed anything citing you should pay Z 20% for working with someone he referred you to, you are free bird. At all he raises concern you can give him small %(I'll say 2%) to keep him a part of it but you should then sign something which should make him partner in your business and he should be active partner to get more share viz he should invest principal or get clients. Best, pay your lawyer if you don't wanna pay Z.

But Z is my friend after all.

He must be a good friend if you're even considering giving him 60k for not doing anything.

As with all of these things - the devil is in the details. Review, preferably with a lawyer, the documents that you've signed with all parties.