Consultants and service providers: Don’t be shy about presenting your own standard agreements

Consultants and service providers come in all shapes and sizes and from countless fields. From IT security consultants to human resource experts to designers and creative professionals, consulting businesses can range from solo shops to organizations with hundreds of employees. However, even the largest and most sophisticated service providers regularly find themselves working with clients who have much deeper pockets and bargaining power. I have worked with service providers who are presented with their clients’ standard agreements so often that they never go through the exercise of creating a standard contract of their own. This begs the question-why not? If you are regularly offering services, isn’t it logical that you should have some say on the terms?

Here are just a few topics you can cover in a basic consulting services agreement that will go a long way toward protecting you and your business’s interests.

Payment. For many consultants the biggest risk in any client relationship is not getting paid. There are a variety of techniques to ensure prompt payment of your fees, such as vetting clients carefully, requiring initial retainers, or holding back any final deliverables until full payment. Whatever you opt for, these terms should be made clear in your services agreement. Additionally, you might consider including the right to impose interest for past due payments or a requirement that the client pay collection costs should you need to engage an agency or attorney to collect amounts owed. You do not need to enforce these terms, but you are unlikely to have these rights if they are not spelled out in your agreement. They most certainly wouldn’t be found in the client-generated version of the contract.

Deliverables and Approval. Another significant risk is that the client may claim to not have received the services bargained for-which, again, can lead to nonpayment. Carefully spell out what your services consist of and what your deliverables will be. Will the client have approval rights? If so, any rejection should be made within a reasonable timeframe and include specific feedback. For creative consultants like graphic designers whose work product requires a subjective analysis, putting parameters on any review and revision are critical.

Intellectual Property. Clients’ form agreements will often include a broad assignment of all intellectual property rights to work product generated during the engagement. In many cases, this language will be entirely too broad and could result in unintended consequences. If you are a consultant who regularly reuses similar tools, techniques, or know-how from one project to another, an overly broad intellectual property assignment can become particularly problematic.

Portfolio Rights. Even in cases where it is appropriate for the client to own all rights to delivered work product (for example, with respect to a brand logo designed by a graphic designer), it is always smart to carve out an exception permitting usage in a portfolio to promote your own work.

Applicable Law and Jurisdiction. Often overlooked as “boilerplate,” an appropriate choice of law and jurisdiction provision can make an enormous practical difference should you ever need to enforce your rights under your agreement. Finding a lawyer and litigating in your own state can be challenging enough. Trying to navigate a lawsuit in a far-flung location makes an unpleasant situation even more difficult.

There are certainly times when a consultant or independent contractor will have no choice but to start with or accept a services agreement provided by its client. However, when possible, take advantage of the opportunity to put yourself in the best starting position by presenting your own agreement first. More importantly, don’t ever get caught flat-footed and empty-handed should a client ask you to send along your standard contract for their review.

Paul J Durham, Esq. assists companies, entrepreneurs, and creative professionals with varied corporate matters including business formations, drafting complex domestic and international contracts, and licensing.

This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice.

This article originally appeared on Portsmouth Herald: Don’t be shy about presenting your own standard agreements