Over many years of advising consultants, I’ve perfected how to simplify contracts for consultancy services agreements.
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.
Below are 11 variables, common questions, the answers to which can shape the business model and terms and conditions of a Consultancy Services Agreement.
11 questions for consultancy contracts
Basic questions
1. What is your usual scope of work?
2. Do you have a workflow or methodology that is critical for clients to follow? If so, what is it?
3. Do you normally bind joint contracting parties, ie individuals (eg directors) and their company?
4. Do you have employees?
5. Do you subcontract and hence take the risk of liability to or for your subcontractors?
6. 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?
Money questions
7. 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?
8. 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 word-processed proposal requires.
Contract format questions
9. Do you normally work on a project-by-project basis so that each project has its own dedicated written contract? Where a consultant has a client that 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). This could be a cover letter agreement (ie the standing offer contract), at the back of which is a Project Memo, a one or two-pager. From that point, for each project that each party proposes under the agreement, a set of project-specific variables can be discussed and agreed on into a project-specific settled Project Memo, all covered under the one already signed cover letter agreement. In that fashion the standing offer (ie covering letter agreement) is signed once with the Project Memo attachment format accepted as needed from time to time. Confirming, the Project Memo format is then used for each project as it arises.
Intellectual property questions
10. Is ownership of intellectual property 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 intellectual property?
11. Further, do you have any intellectual property (eg a unique methodology or product name) which you wish to stipulate remains your property?
Photo credit: “Have contractor, will deliver” – author’s photo of a truck in Boston, U.S., September 2010.
Contact us with any questions or requests.
Recent comments on posts