This week, I've gotten two inquiries from writers about agencies with low commission rates (7% in one case, 10% in another). Both writers felt that the low commission was a positive sign--not just because the agents would get a smaller cut of the writers' eventual income, but because it suggested to them that the agents were less greedy and more author-friendly than agents who charge 15%.
Unfortunately, there's no such thing as a bargain agent.
When I first started dreaming of publication, way back in the prehistoric 1970's, most literary agents charged 10%. This began to change in the 1980's, at first slowly, then in a rush, as agents increased their commission rates to 15% (my agent made the switch in 1989). Nowadays, a 15% commission is the norm. There are some exceptions--a few agents still have older clients grandfathered in at 10%, and a handful of agents charge 20% (often in a two-tiered system that reserves the higher rate for new authors). Apart from this, 15% is the prevailing standard among reputable literary agents.*
Disreputable agents, on the other hand, often set their commissions at 12%, 10%, or even 5%. Sometimes this is because they have no actual publishing industry background and don't know any better, or, in their inexperience, sincerely believe they're giving their clients a better deal. (For why it's really, really not a good idea to choose an inexperienced agent, see this post.) More often, it's to offer the appearance of a bargain in order to sweeten a demand for upfront fees. A low commission is no bargain if the agent never makes a sale--and if the agent is a scammer, as opposed to someone who simply doesn't know what she's doing, a low commission is a safe promise, since the agent expects to make his income from writers', not publishers', payments.
So if you encounter an agent who offers a "bargain" commission--especially if the agent portrays it as such--be wary, and check the agent's background and track record. It may be that you've found one of the only successful agents around who still charges 10%, but it's far more likely that you've run into an amateur or a fraudster.
As for the agencies mentioned in the first paragraph, both are in Writer Beware's database. The first charges an upfront fee of £80 or £120, depending on how many publishers you want it to contact. The second charges an upfront fee of $250. Neither, as far as we can discover, has any track record of commercial sales.
* Book agents, that is. For various reasons that I won't go into here, script agents still charge 10%.