Whether you’re starting your own consultancy business or already have one up and running, it is important that you have a Consultancy Agreement in place with your clients. A Consultancy Agreement will help your business to build trust and credibility. By setting out they key terms and expectations that are required for working together with your clients up front it will help you to minimise risk and disputes so you can continue to focus on what you do best.
What key terms does a Consultancy Agreement contain?
The types of clauses that you would typically expect to see in a Consultancy Agreement for use by a Consultant include:
|Clause||What does it do?|
|Scope||A good agreement clearly outlines the scope of the services you provide. This is important because it helps set the expectations between you and your client for things such as quality, milestones, timeline, budget and more.|
|Payment||Setting out clear payment terms is essential. A Consultancy Agreement can help you to get paid on time by setting clear terms of payment; will give you the right to suspend services if you are not paid; and give you a right to charge interest on overdue amounts.|
|Intellectual Property||Who owns the work you create? You or the client? When does ownership pass? Upon creation or upon payment. Who owns intellectual property or ideas that you had before you worked for the client (e.g. pre-existing material)? These very important questions can all be dealt with in a well drafted Consultancy Agreement.|
|Confidential Information||Your clients will be opening their books, ideas and work processes for you. As a consultant you will often be privy to the most sensitive of business information. Your clients will want an assurance that you will only use this information for the purpose for which it was provided to you – that is, to provide the consultancy services.|
|Limitation of Liability||This involves limiting the liability that you’re exposed to as much as possible to reduce the risk you face in undertaking the project.|
|What else?||Other important issues like termination, dispute resolution and the ability to revisit the scope in the event of “scope creep” should also be covered.|
Whether you are a HR consultant, IT consultant, management consultant, finance consultant, marketing consultant, brand consultant, medical consultant….we think you get the idea….. having a well drafted Consultancy Agreement in place is critical to ensure your ongoing business success.