12 Consulting Contract Terms to Carefully Consider

The estimated reading time for this post is 27 minutes

This long read may save you business or personal liabilityor, at very least, a lot of grief. That’s true whether you’re one of my consultant colleagues or prospective clients who want to know how I work.

I’ve had at least one of the latter from a major media outlet read this and tell me they couldn’t meet one of my requirements. They let me know they respected my professionalism, however.

I much prefer working with clients with whom I’ll have a mutually beneficial business experience. I’m grateful they know we’re not a match and move on to others whose policies give them more comfort. Acting in accordance with the principles of contract review in this blog post helps ensure that, my profitability and adherence to my business values.

The Genesis of This Blog Post

In the fall semester 2017, I took a course called Consulting in my master’s program in Public Relations and Corporate Communications at Georgetown University. I’m in this program because not only do I already provide strategic content writing consulting services, I relaunched my corporate communications consulting practice in early 2018.

So, while it’s a significant one, the program is an investment in my business and gives me the ability to take it to the next level—to become one of the best strategic communicators in my industry.

“When consultants talk about their disasters, their conclusion is usually that the project was faulty in the contracting stage.” —Peter Block

The standards for being an outstanding communications consultant are high, and mistakes in this business can be costly. This master’s program, from which I graduate in May 2019, has forced me to up my game.

Two of the other benefits of being in this program—besides that it’s at  Georgetown—are that I bring my personal and professional experience to the program and I learn immediately to work smarter in my business. That’s because it’s as much an applied as theoretical master’s program.

My classes at Georgetown either confirm what I already know from experience or teach me new skills, strategies or techniques I can apply my business activities the next day. This blog post is an example of that.

In this class, we used a book called, Flawless Consulting: A Guide to Getting Your Expertise Used by Peter Block. It’s a text I’ve referred to throughout my work in the program and will use as a reference for the rest of my career.

Establishing these professional standards has made it possible for me to grow my communications practice beyond “just a writer” to a sought after and respected professional consultant.

In the first chapter of the book, Block says, “When consultants talk about their disasters, their conclusion is usually that the project was faulty in the contracting stage.”

He views “entry and contracting” as one of the skills a consultant must have. Negotiating the right contract isn’t about being hard to work with, and the right clients won’t think that. It’s about making the engagements or projects you take on more comfortable for everyone involved and positioned to achieve the desired outcomes.

Even as a strategic editorial content writer, I consider myself a consultant: I’m advising clients on the best way to create written and visual content that fits seamlessly into their content marketing program. I’m also bringing unique skills in particular business domains to writing to create that content.

Those technical skills are among the those every content communications consultant must have regardless of where they focus their services. But, consulting requires more than technical expertise for flawless execution. It requires partnering and a higher level of professionalism that allows corporate communications consultants to work with senior leaders.

Georgetown’s program has helped me develop into a true corporate communications consultant and, as I’ve always been, I’m willing to share the wealth I paid to get with others. This issue of executing contracts properly before beginning work with a client is an opportunity to do that from the prospective of a consultant, though, since I’m not an attorney.

Professional Consultants Demand Solid Contracts

One way I show I’m a professional consultant is the way I enter contracts, which get identified under many names including a “Master Service Agreement” or “Statement of Work” or “Independent Contractor Agreement” or something else. They can be as short as one page or an email that serves as a contract, or quite lengthy, making me feel like I’d better get an attorney to review it for me.

But I’ve learned that not getting this right can be costly financially, professionally, and legally as well as can lose me the respect I deserve as a highly-skilled consultant. It’s the primary reason I spend so much time on my websites telling prospective clients how I work as well as reading every contract carefully before signing on behalf of my corporation.

I’m not a lawyer and don’t recommend you take the content in this blog post as ironclad legal advice—or as legal advice at all.

I want prospective clients to understand how I will and will not work before they reach out to me about a writing assignment or engagement.

Establishing these professional standards has made it possible for me to grow my communications practice beyond “just a freelancer” or “just a writer” to a respected and sought-after professional communications consultant.

Better Contracts Mean More Profitability—and More Self-Respect

While I have additional milestones I want to reach in my communications consulting business, I’ve paid my dues as a professional communicator. So, am not willing to settle for contracts that potentially hurt my company or me, personally.

Because I’ve been at this for over 20 years (and got proper home training when it comes to contracts), most of the time I can get clients to revise contracts. Most will make revisions once they understand the mutual benefits of doing that and if they value and want to be fair to their consultants.

If I find myself dealing with one of the five percent of prospective clients I can’t persuade to revise their standard contract, which contains or is missing one or more of these problems or provisions, to an agreement that protects me, too, I reject the engagement. That’s true no matter who the prospective client is or how much money the contract is worth.

I’ve rejected work from some of the most prominent brands in the financial services or wealth industry for contractual or ethical reasons. I’ll continue to do that when it’s necessary. I can’t afford not to decline work that may harm me in the long run.

It can take years to recover from that, especially when clients abandon you when trouble arises and I know having had this experience more than once. 

Pay Good Lawyers for Solid Legal Advice About Contracts

As I said, I’m not a lawyer and don’t recommend you take the content in this blog post as ironclad legal advice—or legal or financial advice at all.

However, I am willing to share these 12 consulting contract red flags that give me pause about proposed projects and sometimes the client company. They’re just conversation starters for you with your lawyer, though. You should talk to your legal counsel before applying this post as legal or financial advice to your business. Your enterprise is probably as different from mine as you are from me so keep that in mind as you read.

This blog post also isn’t an exhaustive overview of all the issues you might find in business contracts, either, and it would be irresponsible to suggest that. Don’t use it alone to decide how to construct or revise your consulting agreements.

12 Contract Clauses That Give Me Pauseand Sometimes, Gas

Unclear project term or scope of work

I make sure the “Scope of Project/Services to Be Performed” and “Term of Service” sections of my contract are tight. If the engagement doesn’t have a solid beginning or end date, I get them added so I can plan work accordingly, meet client expectations and don’t spend more time on the engagement than I should.

My contract must stipulate how specific dates for particular milestones get established, what deliverables I’m responsible for and what my client is required to do by which dates to make it possible for me to complete clearly identified tasks. I request a contract addendum or a project timeline that shows those dates.

I also ensure all the tasks and activities that are part of the project show in the project’s scope and detail. If I’m only going to do “four blog posts per month that are 700 words or less on best financial advisor firm operations practices,” that’s what my contract scope should say. This level of specificity is necessary to avoid the profit-draining scope creep covered next.

Uncompensated time or activities

I identify what other demands on my time clients will make to avoid scope creep. These requests come when a customer adds any other tasks or requires time for related activities that my Statement of Work (SOW) or contract doesn’t cover.

Usually, I’ve noticed, scope creep starts slowly. But, over time, will increase as clients become aware I’ll allow them to foist more work on me without additional pay. I no longer go for that, but that’s because I let it hurt me so much in the past.

These “extra” tasks and activities include (but hardly are limited to):

  • multiple short phone or Skype calls or several long ones per month;
  • client phone conferences;
  • instant messaging throughout the day; 
  • in-person or virtual meetings or impromptu webinar trainings or information sessions;
  • more than a few (two or three) emails a week requiring more than 10 minutes for a response;
  • complete outlines for work not agreed to as part of the writing fee;
  • sidebars, infographic text, social media posts or photo searches;
  • multiple revisions (especially those requiring substantial rewrites or expanding well beyond the original word count stated in writing).

I consider all these extras that benefit the client as consulting time that real professionals charge appropriate fees for clients to receive. I make sure my contracts establish that I’ll get paid for all my time and work.

I make certain it’s clear to the client that when they go outside the scope of our contract, I’ll charge fees equivalent to my standard hourly rate or a prorated project rate for work beyond the amount I already got paid. But clients who do this too often to me lose me as a consultant.

Unreimbursed expenses

Other activities that can cost me time and money often come after I’ve signed our contract (or agreed to the work on a content platform). One such expense is research and transcripts.

I’ve seen this as a contract clause under which a client requires me to provide all my research notes and transcripts of interviews but may not want to pay for transcription. Not only can’t I repurpose those notes or interviews for other projects, but it also costs me time to transcribe interviews.

That means I can’t take other work while I’m transcribing for my client. I could pay for transcription but, if my contract doesn’t reimburse me for the service, I’m absorbing the expense myself.

This cost for my time comes with the production of copies of storage media, pictures or images I’ve produced for the client. Some want multiple prints or editable copies in a particular file format. Other expenses can include international calls, specialized software used to track time or premium services I don’t use for other clients.

Some clients even require special insurance or formation an entity like an LLC to work with them. Sometimes, I’ll have to absorb PayPal or bank fees to get paid more quickly than having a check mailed (which takes time and resources to go deposit).

I determine if I’ll integrate reimbursement into the contract expenses that I’ll incur for a single client related only to their project or absorb them as “costs of doing business.” I know I can take some expenses as tax write-offs but not always and prefer my money in my bank account, not the IRS’s until tax time.

Similarly, I know a cost like LLC formation, because I can use the entity for other clients, isn’t reimbursable. So before I’d do this, I decide if the costs of forming an entity and adequately managing and maintaining one compliant with the laws governing my type are worthwhile to me.

Again, this is a business transaction where I’m exchanging my services for payment and it should be mutually beneficial across the experience. It’s as essential my clients understand my payment policies as it is I understand their invoicing policies.

Great clients, like my long-term one, respect this, and they don’t have issues with any of this.

Unrealistic deliverable timelines

If I’ve discussed one schedule with a client and I see another as an addendum to my SOW or contract, I either request it gets changed back to the one we agreed on when we discussed the project. I’ll request rush or other fees for the work if the deadlines got accelerated.

I remember that additional deliverables will take away from other client work I’m responsible for completing and marketing activities for my business. (It also can cut into my study and project completion time for work or other crucial personal events, and I’m not for that.)

However, if I know I can’t meet the aggressive schedule the client is trying to set, I’m honest about that up front. Life happens, and other things and people get in the way of my work sometimes (deliberately) derailing my project timelines.

But taking on more work than I know I can manage may be disastrous to my reputation and credibility, so I avoid that in writing.

Non-compete, non-dealing or non-solicitation clauses

These force me to agree that I won’t work for, service former clients or market to competitors of the prospective client. Often, the company makes it broad enough that they get to determine who their “competitors” are and that covers my entire primary industry.

Sometimes these clauses get geographically limited, but often they’re global when if you work in digital marketing like I do. In some cases, brands want to make those effective for a certain number of years after I terminate the contract or it ends.

As an independent contractor, I generate my revenue by providing my services industry-wide, including to a prospective client’s competitors. In the past, that has included leading brands who a potential client considered their competitors and wanted me to terminate my work with them while I worked on their projects.

I’ve been eliminated for consideration from communications teams because I work regularly for competitors in the same industry.

Agreeing to one of these clauses means I’m selling control of my business and labor to a single client by signing a contract with them. The provisions could put me out of business in that industry, and large companies with deep pockets can take me to court to try enforcing these clauses. Both scenarios mean I’d be unable to do the work for extended periods in areas where I’ve developed my most lucrative skills.

On the rare occasions, I see these clauses in a SOW, agreement or contract, I require potential clients completely remove them or I reject the project. If I wanted to be an employee, where all my time and labor would be under company control, I’d get a job.

Work for hire or all rights provisions

These must be in writing before a creative does any work, so clients often require they sign contracts that contains this provision before any work gets created.

I’m wary of these because they usually get disguised under contract sections like “Deliverables” or “Work Product.” Worded correctly, work for hire (or work made for hire) means I’m forever selling “all rights, title, and interest,” or my copyrights, to any work I produce for the client.

Here’s an example of what these clauses may look like in a standard contract:

All ideas, inventions, discoveries, creations, improvements, concepts, developments, methods, tools, know-how, trade secrets, works of authorship, documentation, templates, processes, techniques, data, content, programs, reports, information, materials, designs, drawings, specifications, plans, documents and revisions made to any initial work, content or materials of the Client of any kind whatsoever prepared or created by Contractor in connection with, pursuant to or resulting from the Services shall be the sole property of and belong to the Client or an affiliate specified by the Client. All right, title and interest in and to the Work Product, including all intellectual property rights therein, shall be deemed a “work made for hire” (as that term is defined in § 101 of the 1976 Copyright Act) and shall reside with the Client or an affiliate specified by the Client without further employment of, or payment of additional compensation to Service Provider.

The way this one works is, for a single fee, the enterprise (and their affiliates) own everything I use to improve their marketing materials, designs, content, methods, inventions or discoveries, including my ideas, concepts, techniques, and know-how.

My work product becomes theirs, and if I use any of it—including ideas or concepts—for any other client work or marketing my own business without their permission, I’m breaching their copyrights and risking a lawsuit.

If the work is writing or design, they reuse, revise, and publish my work repeatedly anywhere and anytime they want and generate as much revenue as they can without paying me anything further than the original fee.

Many agreements allow the client to publish and republish the work in print, digital and any other form of publishing that exists now or will exist in the future anywhere in the natural universe. (Have you ever seen your articles in databases or for sale on Amazon? I have. These clauses are why.)

Companies or publications can syndicate, license, and sell the work; add it to books and other compilations; reproduce it in its entirety as well as in parts and create derivative works from my piece of content, graphic or infographic.

They usually word it so they can use my name and likeness (picture) when they republish or syndicate the work, which helps them market leveraging my brand as well-known and recognized professional. Sometimes clients will require this while not allowing me to use their names in my marketing in any way or even identifying them as my client.

I have to decide if it’s worth it to sign contracts with work for hire provisions and charge higher fees where I’m confident my work product will have far more value to the client than one use. Typically, I request such broad clauses to be limited in specific ways that protect my ideas and image.

Unilateral, all liability indemnity clauses

These can be hard to describe, but I know them when I see them. They make me accept all legal liability for any deliverables I submit and my clients use, even if they’ve edited the deliverable. I must defend, without their help, any lawsuits related to my work product or a part of it like those interviews or transcripts I’ve mentioned.

They usually look something like this:

The Service Provider shall indemnify and hold harmless, including the payment of attorney’s fees and costs through trial and all levels of appeal, Client, its affiliates and its directors, officers, employees, agents, successors, assigns, licensees and distributors against any and all claims from any source at any time made or judgments paid or incurred in connection with claims by any party which arise from use of materials originating with the Service Provider.

The way this seems to read, if someone sues my client in 35 years for a work that I  created when the current head of legal was in preschool, the client company or their successor or anyone they assigned my copyright to can come for me legally. That’s unlikely, but lawsuits against contractors who sign these are legion.

There are ways to amend these clauses to make them more mutual. I try to limit them to certain aspects of the contract that I breach or to lawsuits where I’m deemed at fault. In some cases, I insist the client limit my liability only to what they paid me for the work.

In some cases, I’ve asked clients to remove the clause entirely or revise it substantially as I suggest above. There are ways to amend these provisions to make them more mutual. I know I might be able to get these clauses revised and still have other clauses in the contract that say the same thing differently, so I check.

I talk to a media attorney or other experienced legal counsel about limiting my liability to my actions or negligence under these contracts. Then, I don’t do anything to get myself sued or allow the client to talk me into doing anything unethical.

Unilateral non-disclosure, trade secrets or confidentiality clauses

Sometimes these one-way agreements are entirely separate contracts clients require I sign. But many times, I’ll find them a clauses embedded in agreements they’ve sent me.

These clauses or contract insist I keep all client brand information secret forever and never use their “confidential information” or trade secrets to serve other clients. This usually is shown in the agreement as a lengthy list of items and adds aor anything else we may have missed” clause.

This might be a reasonable request except the client can pick my brain for my confidential information or my trade secrets. They’ll expect me to use my confidential trade secrets in my work for them “to make it unique.”

Then, because I signed all my rights away, they’ll will apply freely whatever I’ve revealed or provided to any other aspects of their marketing activities to generate higher revenue of which I’ll get no portion. That includes my trademarks, servicemarks, logo, name or likeness when I haven’t explicitly granted those rights to the client.

I only sign contracts where these provisions are mutual, and get identified clearly as “Mutual Nondisclosure Agreement” or “Mutual Confidentiality Agreement.” But I read the entire contract to make sure nothing else there overrides the mutuality of these clauses and allows the client to use my confidential information.

I make certain to read sections like “Miscellaneous” or “Work for Hire” to see what might be hidden there that includes similar language.

Insurance requirements

It’s a good idea to have errors and omissions and a business owners policy that covers general and personal liability if you’re a consultant or media perils if you’re a journalist who does hard news, exposes and investigative pieces.

However, when I see these provisions, I don’t agree to buy additional coverage before I check to see if I have insurance in place that will cover my business. I read these clauses carefully to determine if the client wants me to add as an additional insured or loss payee on my coverage.

Also, I’m careful about other provisions in the contract that may cause me to violate the terms of my insurance policy, voiding my coverage or exposing me to higher liability that would trigger use of my policy benefits. Having those things happen can leave me uninsured or underinsured.

I’d check with my insurance agent or the policy issuer before I sign a contract including this clause to make sure I’ll be covered if I sign it, that they don’t want me to have the client revise it or some other aspect of the agreement or will require the provision be removed altogether.

Moreover, I ask my insurer how that client should use coverage to protect me. Client relationships should be mutually beneficial, not a more risky venture for one or the other party.

Payment terms beyond 30 days

I know when I sign an agreement with a client for my time and deliverables in exchange for payments that come after I do the work, I’m extending credit to those clients. I don’t know about you, but I don’t have any special deals with my personal or business creditors which include my landlord, Georgetown University (which isn’t cheap), and utility companies to pay my bills beyond 30 days.

They expect to be paid for their services on time. Similarly, I’m providing my clients a specialized service for which I need to be paid in 30 or fewer days and in advance in some cases. When I do what’s necessary to get paid on time, I expect to be paid on time so I can pay my bills on time.

Not only do my contracts have clearly defined payment terms, but they also state that I will get paid in no more than 30 days from invoicing. I also require clients to accept additional payment terms like I’ll stop work if they don’t pay me and will add late fees or I’ll add and expect to collect interest on unpaid invoices.

I know they have these policies in place for any vendor they extend credit. My business should, too.

An undefined number of or extensive revisions

I mention this form of scope creep above but it’s so common, it warrants its own section.

Unless you’re entirely new to consulting, you know all about this. You’ve written a white paper, report, e-book or blog post based on clear parameters you made sure you got from your client. They’re not happy with what you wrote and want extensive revisions and, sometimes, a complete rewrite.

Whether I’m doing a short one-off or expansive projects for a client, I establish a set number of revisions and include the extent to which I’ll make those revisions. That’s usually based on a percentage of the total words or a specific word count.

I preclude unpaid significant rewrites or expansions on blog posts that aren’t necessary because I misunderstood the scope of the project or client instructions by making clear I won’t do them unless I’m paid more.

I build the fees I charge for additional revisions beyond those we agreed on into my contracts. Making these policies clear in client agreements prevents loss of revenue for me caused by uncompensated extra work and lost time I can’t commit to other full-paying projects.

When I’m working on a content platform, I’ve learned to ask before I accept assignments what the process for addressing scope creep are. I address getting paid for all content I write and request links to policies in writing related to revisions. I also ask about deadlines for completion of revisions and make sure I promptly invoice for additional work. 

Unclear acceptance timeframes and policies

I always think it’s great when a client pays on acceptance of my deliverables, but in most cases, I can’t submit my invoice before approval happens. So I’ll be confident I know when and how acceptance occurs for any prospective client.

Is it a quick process taking several days or are there six sets of eyeballs that need to see the work before legal approves it, taking weeks or months?

I get that outlined in the contract (or in writing for content platforms), setting the maximum time frame that I wait until I assume “acceptance.” Then, I submit my invoice and expect the client pay within 30 days.

I don’t allow verbal assurances of acceptance policies. They must be in writing, preferably in a formal contract, because that written agreement supersedes any oral promises clients make to entice me to accept a project.

Fear Lawsuits or Loss of Reputation Rather Than Loss of Business

One reason consultants, especially those of us providing creative services, don’t challenge contacts is fear losing business. In an emergency, seasonal lag or other down time especially, we need the money we’ll make from prospective clients. We fear the client might rescind a project offer to us if we request revisions or changes to contracts or fees.

But to me, telling me to “take this contract or leave the project” is the same as withdrawing the opportunity. If the contract was acceptable “as is,” I wouldn’t have requested changes.

That fact doesn’t change even if they say it nicely like, “This is our standard contract and, since most vendors sign it the way it’s written, I’m sure legal won’t make the revisions you’re requesting.”

I thank the client for informing me about that and insist they send the contract to legal for revisions, even major ones, anyway. You’d be surprised how often this works. I usually get respect for my polite insistence.

Of course, some of the clients’ editorial or project management staff (with whom I’ll deal mostly for most editorial content writing projects) may take exception to my behaving as an authentic consultant. They will (mis)behave accordingly to remind me they think I’m not a true professional and mine isn’t a “real job” like theirs is.

Moreover, accounts payable staff, unused to (or resentful of) independent professionals they consider “mere freelancers” establishing payment policies like big brands do. (Clearly, they don’t understand this strategy is why these brands became large.)

Operating as if they’re “free” to ignore payment deadlines or “free” to treat us any way they please, they may try delaying paying our invoices.

My response to that is to do great work and raise those issues with my primary client contact to have them addressed.

I also make sure my agreement has a “Termination Clause” that gives me the right to end the contract if things get ridiculous and senior executives refuse to address issues.

If I’m working through a content platform, I’ll inform my managing editors or talent managers there’s a problem that is threatening my ability to stay part of the brand team.

I can’t tell you how often I’ve been happy I made that decision or how falling back on robust contract provisions I’d required saved me grief with projects I accepted. I preserved not only my mental wellbeing but my reputation and my protection from lawsuits.

Make Room for the Best Clients and Experiences

Allowing worries about losing work to keep me from operating like the legitimate business owner I am and cause me to accept contracts that don’t protect my interests will keep me attracting the wrong clients for my communications consulting practice.

I risk the loss of reputation, revenue or a lawsuit when I fail to manage and meet a client’s expectations and my agreement didn’t contain terms or provisions protected me from the fallout.

That’s why I’ve used my Consulting and other courses at Georgetown to hone my engagement entry and contracting skills further. I routinely exercise them like an improved consulting practice skill muscle, so they’ll grow.

Now, I only make room in my business for the best clients and experiences so I grow the wealth I launched my business to help me develop.

(c) 2017-2018. Dahna M. Chandler for Get Money Moxie, Inc. All rights reserved. This article may not be reproduced in whole or in part without express written permission of the author.

* Disclaimer: This blog post uses sample legal clauses and personal experience solely to illustrate the points made here. This post is for informational purposes only. It is no substitute for your contacting a lawyer, insurance agent, tax advisor or accountant or any other qualified or licensed professional for advice on your specific business situation. Please contact those professionals and carefully review this site’s Content Disclaimer on the use of illustrative information and the application of this information to your business before using any information in this blog post to make any crucial business or personal decisions.

Image Source: Pexels.com

Get Money Moxie
Read previous post:
Reject the Spec Writing Work Offers or Hate Yourself Like I Did

Want to avoid that gross feeling that comes with being used? Avoid unpaid writing tests.