Do You Really Need a Consultant Agreement?
Beyond the abundant uncertainties with even the most resolute of long-term working relationships, marketing consultant contracts provide clarity and legal protection against indisputably vexing issues that can arise from them down the line. Contracts are often considered unnecessary in connection with short-term engagements such as those between lawyers and marketing consultants, which are generally finite in duration, but almost as a rule, they are vital to reducing painful realizations and enforceable obligations down the road. What seems to be a glitch in a short-term arrangement may be an irreconcilable difference in the eyes of the law, creating a litigation nightmare. The need for a contract is usually obvious in the face of scope-creep, vague services descriptions, just as a natural language agreement surrounding confidentiality and indemnification is born from the rampant digital information sharing that is common place between these two parties in this day and age. To add another layer of complexity, while lawyers may be subject to ethical guidelines and malpractice claims, marketing consultants are not held to any recognized level of legal and professional responsibility. The safety net for both parties is therefore their contract, which should be signed before any substantive work begins. While the contract should be simple and direct, it should define all of the above issues as well as payment requirements, intellectual property rights, termination provisions, and governing law. While most issues are reversible with a simple amendment or waiver, substantial specific expenses such as foreign advertising costs, personal appearances, or direct client service fees can hurt either party quite badly if there is inadequate prior written consent. Thoroughly discussing a contract up-front , rather than when an issue arises, serves to clarify the expectations of both parties while also informing both of their responsibilities in a cautious and transparent fashion. This is particularly true in the case of legally contentious topics such as the use of client lists, marketing consultant marketing rights and responsibilities and non-compete clauses that may impact future employment. Legal dispute may be the bane of any successful business and distribution of profits is a bit less likable than selling a book, but a virtually ironclad, clear, well-written and unambiguous contract between two attorneys certainly offers up some value to help mitigate such risks. As we’ve noted earlier in this article, many marketing consultant contracts indeed include select provisions that can help to minimize legal risk, and non-solicitation agreements in particular are very valuable as they can prevent competition down the line at certain levels. For example, if an attorney does not want his trusted marketing consultant interfering with his personal livelihood, a non-solicitation agreement with that named marketing consultant could be of great importance. Having a strong agreement even in a short-term project like this can be an invaluable resource. Consulting and agency retention contracts, whether verbal or written, are meant to be practical at their base but should have precise clauses defining key responsibilities and rights. Keeping it simple can help to avoid worries that distract you from your work, but the inclusion of clauses that contemplate unusually disruptive events can help to minimize what may be a very expensive problem later on. Thoroughly covering the critical issues for marketing consultants in a signed contract means that work can be handled with maximum efficiency and return should litigation arise.
Key Components of a Marketing Consultant Contract
When you decide to hire a marketing consultant, you have two choices: sign a written contract or go month-to-month. Either option involves some risk. A written agreement may not be covering everything that is important to the outside consultant, and it may limit the consultant’s ability to work with competitors, which might make the consultant either not want to work with you or unscrupulously leave you twisting in the wind if a better offer comes along. Conversely, going month-to-month could keep things simple upfront, but could also mean you’re wrestling your consultants for every penny if the relationship doesn’t work out as expected.
Generally, most marketers will ask for some sort of written contract. Here’s what your written marketing consultant contract should include: The scope of services is generally the main focus in any marketing consultant contract. A scope of services is essentially a grid that shows what services a consultant will provide in accordance with the contract. Here is a list of the type of issues that should be contemplated in a scope of services: A duration of services clause should state for how long the contract will last. Most contracts provide for at least one year. The payment terms should address both hourly fees for new marketing programs as well as costs. Some marketing consultants bill their clients on a monthly basis, while others will provide the initial materials (e.g. website, advertising and social media strategy) on a retainer fee basis, then will offer ongoing support for monthly costs after the first year. A confidentiality clause should protect both the marketer and the client from revealing to any third-party any information that was disclosed during the relationship that has not already been made public. A termination clause will provide for how the contract may be terminated, and under what circumstances. For example, if either party terminates the contract within the first 90 days, the client pays 100% for fees and expenses that are invoiced, but if either party is in breach or defaults on its obligations, then the prevailing party will receive a full payment of damages as well as reasonable attorney’s fees. Termination clauses are key to efficiently end a relationship.
Scope of Services to Define the Required Work
To make sure the scope of services you are hiring a marketing consultant to perform is clearly delineated, I recommend including more than one or two specific tasks. This is because each marketing "task" can be quite expansive, and the agreement would be much more time consuming and expensive to get into a dispute – after the hiring has been carried out – about exactly what was included, versus any changes that occurred during the course of the relationship (for which a change order can be sent, or a completely new agreement can be made). In likelihood, the scope of services WILL evolve over time. Your best bet is to use the initial agreement to set the baseline of what is to be accomplished, and then let the changes occur thereafter.
Explicit detail at the outset of the relationship will also mean that either party is less likely to feel that the other side is "nickel and diming," or that certain work is not part of the original hired services (and thus not included in the original fee). Even if you are certain the parties will work together again (for instance, if this is a renewal of an existing contract), it’s imperative to now determine whether the scope of services are still going to be the same.
This is true even with regard to such services as on-going website content or website updates. The field of internet marketing is changing, and continues to evolve on a daily basis. As an employer or a contractor, you want both sides to be assured that the relationship is ongoing, but can allow for both parties to comply with the agreement or termination provisions at any time. Continuity is important, but the scope of services must be expressly defined.
Payment Arrangements and Agreements
Payment terms and conditions should address the fee structure, payment schedule, invoicing process and any additional expenses. The lawyer should be sure that their companies are fully clear on the contract, even if it is broken down into smaller sections, such as the fee for providing services per month and the fee for expenses incurred and spent. It may also be wise to have the client pay the lawyer for expenses up-front.
Some clients may want to change the payment terms in order to receive a better deal on the contract, but the lawyer should not be swayed to make significant changes in order to please their client. Keeping the fee a little high can be a way for the lawyer to be compensated for near-constant availability. A client may complain that they can get these services from another lawyer for much less, but the lawyer should consider what level of services that other lawyer is actually providing. It’s important that the lawyer know what the market rate is for their services, but they should also limit the number of competitors that they actively observe in order to determine their pricing. If there are too many names on the list, it can become almost arbitrary exactly whose prices the lawyer considers when setting their own.
If the lawyer has been providing marketing consultation services for years, they will likely have a good idea of what other lawyers are charging for these services, including both hourly and fixed fees. Lawyers who are newer to this area or those who are not members of closely-knit legal communities may have some difficulty determining market rates.
The contract should make it entirely clear what type of compensation the lawyer will receive. It should explain in detail whether the lawyer will receive an hourly compensation, a fixed fee for services, a commission on any sales generated and/or a finder’s fee for introducing new clients to the company. If multiple types of compensation are involved, the contract should clearly delineate each type of compensation and when it will be provided.
Confidentiality and Non-Disclosure
In the relationship between a marketing consultant and their client, the assurance that confidential information will be protected is paramount. This section of your marketing consultant contract should be explicitly detailed, as it is the cornerstone of the mutual trust necessary for a successful partnership. Discussions regarding a client’s brand strategy, as well as insight into market trends and customer preferences, are often sensitive subjects that you must agree to keep confidential. In addition, certain marketing strategies are often considered intellectual property. A detailed definition of what information is considered confidential should be included in your contract to avoid long – or short-term leakage of the information you are privy to .
We have outlined below a few common areas of concern that you may wish to include in your contract to alleviate, or at the very least, mitigate future problems:
In the case where you will be providing services for or working with a third-party client, it is in both parties’ interest to agree to a non-disclosure agreement. This agreement is a safeguard against unpleasant surprises when a client approaches your former client about the work that has been done. A signed agreement will give you recourse if a former client tries to obtain intellectual property that is rightfully yours. In addition, it helps to ensure that your relationship with a client remains confidential and doesn’t place you in the precarious position of having to choose between paying your bills and maintaining a trusted relationship with your current client. It is an added service to be sure, but one that many of your clients will appreciate.
Dealing with Amendments and Settlements of Disputes
A well-crafted contract includes provisions for handling amendments and dispute resolution to manage the consultant-client relationship.
Flexibility in a business arrangement is of paramount importance, and ideally, a contract should incorporate as much flexibility as possible. Agreements that allow for phone calls, emails, or text messages to bond quickly with clients will ensure that all are on the same page at all times.
Anticipated conflicts and disputes should also be spelled out clearly in the contract. A dispute cause should state that in the event of a disagreement, both the consultant and the client mutually agree to mediation. To that end, the contract should require that the parties invoke binding arbitration in the event that negotiation fails to resolve the dispute or conflict.
Unless the parties are in different cities, or cannot attend a mediation session, the contract should provide for an in-person meeting to sort out the differences. The more contact the consultant has with their client, the more likely they are to avoid breach of contract or conflicts.
Methods for resolving disagreements should be addressed in the contract to avoid misunderstandings. A contract provision should state that the cost of mediation will be divided by both parties. If necessary, you should also spell out payment arrangements for travel expenses as well as lodging and meals if the parties are travelling a significant distance to resolve a dispute.
Signing the Contract: Legal Considerations
Signing the contract is not simply a good idea, it is often essential to ensure that your consultant cannot dispute that the contract was ultimately accepted and agreed to.
Furthermore, when you do sign a contract with your consultant, you need to make sure that the contract is enforceable.
You may want to consider using a lawyer to review the contract before you sign it. You need to be particularly careful with anything in a contract that could be considered a non-compete clause. You want to make sure your contract is binding and that your consultant won’t be able to get you back in court over a non-compete clause by just claiming that he or she never actually agreed to be bound by the terms of the contract.
You also need to think about signing the contract. Does the contract say you need to sign a hard copy, or would a digital signature work, too? If you allow a digital signature, what will you accept as valid? There is no "click here to agree" function for contracts. You might want to include in your contract that signing the contract satisfactory to you will suffice, or you might want to specify what you promise to use as acceptance.
Marketing Consultant Contract Example
In providing a sample contract template for marketing consultants below, I’ll leave blanks for the names of each party, the date of the engagement, and other terms that may be applied to your specific situation. You should regularly review and update your contracts with the assistance of appropriate legal counsel, keeping in mind that what you include in the contract should be tailored to reflect your specific business needs and situation.
Consultant Agreement
THIS CONSULTANT AGREEMENT ("Agreement") is made this _____ day of ________, 20___, by and between ______________________ ("Consultant") and ____________________ ("Client").
WHEREAS, Consultant is engaged in the business of providing _______ and/or strategic advice and assistance to clients, with the knowledge, skill and experience to be able to perform the services set out in this Agreement;
WHEREAS, Client wishes to engage Consultant to perform marketing strategy services, in accordance with the terms of this Agreement;
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, the parties agree as follows:
1. Engagement of Consultant
Client hereby engages Consultant to perform the services ("Services") set out in Schedule A, and Consultant accepts such engagement, on the terms and conditions set forth in this Agreement.
2. Term
Subject to termination in accordance with Section 6, the term of this Agreement will commence on the date of this Agreement and continue through until the Services are completed as specified in Schedule A, unless extended by the parties.
3. Use of Employees of Consultant or Others
Neither party will permit any employees, agents or contractors of the other to perform any Services hereunder, except in conformity with the terms of this Agreement.
4. Compensation
In consideration of Consultant’s performance of the Services, Client will pay Consultant the fees in accordance with Schedule B.
5. Expenses
Client will not reimburse Consultant for any expenses in connection with the Services to be provided hereunder unless otherwise approved in writing.
6. Termination
Either party may terminate this Agreement for any reason on _____ days prior written notice to the other party.
7. Representation, Covenants and Warranties
(a) Consultant hereby represents, covenants and warrants that:
(b) Client hereby represents, covenants and warrants that:
8. Support
Owner will provide reasonable support to protect and preserve the Agency IP and will not permit any third party to infringe any rights of Consultant or its Affiliates in the Agency IP. Client will properly label all tangible documentation comprising Agency IP disclosed to or otherwise coming into the possession of Client and its agents and representatives by "Confidential" or "Proprietary." Consultant will promptly notify Client of any Agency IP which comes to its knowledge and which Consultant agrees is being used or disclosed in any manner adverse to Consultant’s or its Affiliates’ rights in Agency IP. If any such use or disclosure occurs, Client promptly shall take all necessary steps to terminate such use of or disclosure of any such Agency IP and to prevent further use or disclosure of same .
9. Confidential Information
Confidential Information includes all information, whether in written, oral or other tangible form, that is confidential or proprietary to a party, or designated as confidential by a party and which is intended to be kept confidential. Confidential Information includes, without limitation, information concerning, or relating to, a party’s computers, software, algorithms, hardware, programming, product development, security and technical data. Confidential Information shall not include information that either (a) was known to administrator at the time of disclosure to it, or (b) becomes known to administrator, without breach of this Agreement or of any agreement by which such Administrator obtained such information, from a source other than the other party, and from which Administrator was not prohibited from receiving such information.
10. Indemnification
(a) Indemnification by Client. Client hereby agrees to indemnify Consultant, its Affiliates, and their directors, officers, employees and agents against and hold each of them harmless from, any and all Losses resulting from any Demand which is made or is threatened against any of them, and which arises out of or results from (i) any breach of this Agreement by Client, or (ii) any negligent act or omission, or wrongful conduct, or willful misconduct, or breach of law or violation of any applicable rule, regulation or order, in each case by Client.
(b) Indemnification by Consultant. Consultant hereby agrees to indemnify Client, its Affiliates, and their directors, officers, employees and agents against and hold each of them harmless from, any and all Losses resulting from any Demand which is made or is threatened against any of them, and which arises out of or results from (i) any breach of this Agreement by Consultant, or (ii) any negligent act or omission, or wrongful conduct, or willful misconduct, or breach of law or violation of any applicable rule, regulation or order, in each case by Consultant.
11. Miscellaneous
(a) Modifications. No change, modification, or amendment of this Agreement shall be valid unless in writing and signed by the parties hereto. This Agreement may be modified by mutual agreement in writing, and shall be subject to renegotiation in good faith upon the occurrence of an event having consequences that were not anticipated at the time of this agreement, which event, in the sole opinion of either party, necessitates a change in this agreement in order to achieve that party’s original business objectives.
(b) Entire Agreement. This Agreement constitutes the entire agreement between the parties as to its subject matter and supersedes all prior understandings, agreements and representations between the parties as to its subject matter.
(c) Severability. Invalidation of any provision of this Agreement shall in no way affect the validity of any other provision in this Agreement.
IN WITNESS WHEREOF, the parties have executed and delivered this Agreement as a sealed instrument, as of the date first above written.
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