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11 variables for consultancy services agreements

Over many years of advising and working closely with consultants, I've perfected how to simplify contracts for consultancy services agreement.

I usually recommend a contract in a letter agreement format.

I normally title these "Consultancy Services Agreement". They are for services a consultant will provide to a client for a fee. The consultant is operating here as an independent contractor, not an employee.

 

To quote to prepare such a contract I need instructions on the variables during a Q&A session over the phone or via email.

11 questions for consultancy contracts

Below are 11 variables, common questions, the answers to which will shape the business model and terms and conditions of a Consultancy Services Agreement.

  1. negotiation_calculationDo you normally work on a project by project basis so that each project has its own dedicated written contract? Where a consultant has client which requires lots of follow-on or separate-but-linked projects, it can be simpler to use an "umbrella" contract format (AKA a "standing offer" type contract). In our format there is a cover letter agreement (ie the standing offer contract), at the back of which is a Project Memo one or two pager, into which project-specific variables can be noted and agreed on. In that fashion the standing offer (ie covering letter agreement) is signed once with the Project Memo attachment format accepted. The Project Memo format is then used for each project as it arises.
  2. Do you normally bind joint contracting parties, ie individuals (eg directors) and their company?
  3. Do you have employees?
  4. Do you subcontract and hence take the risk of liability to or for your subcontractors?
  5. What is your usual scope of work?
  6. Do you have a workflow or methodology that is critical for clients to follow? If so, what is it?
  7. Is ownership of intellectual property ("IP") generated by you important for you to keep, or do you usually license or transfer IP rights or otherwise make no mention or issue about IP?
  8. Further, do you have any intellectual property (eg a unique methodology or product name) which you wish to stipulate remains your property?
  9. What is your usual fees basis? Options include quote, fees estimate, retainer, or hourly/day/week rate. Do you normally require percentage payments or payments triggered by milestones or other trigger events? What's usual for you?
  10. As for your billing cycle, what are your terms of trade (seven day, 14 day etc) and when do you usually invoice? Options include at milestones, monthly, or other intervals?
  11. How often do you have to prepare formal proposals, in which case you might be best served settling the format of it too. If most of your job bids are made in emails with no attachments, then you are unlikely to need the formality a detailed wordprocessed proposal requires.

Photo credit: "Have contractor, will deliver" - author's photo of a truck in Boston, U.S., September 2010.


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