More people are choosing to make the shift from traditional employment options to working for themselves. Some make the leap willingly, opting for greater work/life balance while others find it’s the best option after being downsized. As a Consultant or Contractor, you can choose your hours, clients, and where and how you will work… but you also need to develop the skills and systems that help you run a business successfully and not just do a job. It’s smart (and efficient) to create systems that protect your livelihood and organise your workflow so you can get work in the door, communicate effectively with others and get paid on time. A Consultancy Agreement is an extremely useful tool because it provides a clear framework for the operation of your consulting arrangement. It should cover the following issues:
- A clear description of the work you will do. What are the tasks / project? When does it need to be completed? Are there specific milestones? What tasks are not included?
- Fees and rates of pay. Amounts, progress payments, terms and how payments should be made.
- Expenses and incidentals. What are they? Who will pay for them?
- Confidentiality. Consultants often work for a number of employers, often within the same industry. It’s crucial to address confidentiality within a written framework so that both parties can feel more protected in sharing valuable know-how with each other.
- Intellectual Property. A consultant may create valuable IP assets. Who will own these assets? Will you need to issue an Intellectual Property Rights Agreement?
- Dispute resolution. What happens if the parties disagree?
- Termination. How and when will the arrangement be terminated?
Putting your arrangement in writing removes ambiguity and keeps everything very professional. Both parties know where they stand and if a conflict does arise, you can refer to a solid record to help you find a solution. Misunderstandings between you and your clients can damage your business and waste valuable productive time. With a well-drafted consultancy agreement in place, you’ll demonstrate to your clients that you are serious about your business relationships, and you’ll reduce the possibility of conflict.
