- Contracts protect both you and the client.
There are many contract types,
ranging from master services agreements
to individual statements of work.
Engage a competent attorney to help you
navigate contract issues.
While they'll handle the legal elements of it,
you'll have a large role in scoping the work
covered by the contract.
For more details on contracting issues,
take a look at my contracting for consultants course.
Major components of contracts include scope of services,
ownership of work, liability,
confidentiality, pricing and payment terms.
The attorney will help you with ownership,
liability, and confidentiality.
You'll need to have a lot of input into scope and pricing.
I'm not an attorney but I read and understand
every clause of every contract.
I've built boilerplate services agreements
and I reuse client statements of work
and master services agreements
once they've been approved once.
It makes future approval that much easier.
Master services agreements govern
the entire relationship between you and the client.
Statements of work and task orders
are individual projects that are subject
to the terms of the master services agreement.
A services agreement is somewhere between
a master services agreement and a statement of work
or task order.
Usually, it's for more one-off work.
Scoping the work is what you're signing up to deliver.
It will include deliverables, timing, and resources,
both yours and the client's.
Clients will always push for a broader scope,
and they'll look to expand scope but not payment
during the project.
It's critical to scope the work well.
Otherwise, you'll do too much work
for not enough money.
Once you've scoped the work, you'll find
there are a few common pricing models.
They'll range from hourly or daily
fee for service, to project-based flat fees
or item-based fees.
Sometimes you'll deal with retainers and license fees.
Some advice:
find a good contract attorney who has dealt
with small consultancies.
Beware of attorneys who overcomplicate things
or who argue with every point
in a client's standard contract.
A good attorney will minimize cost for you
and make sure you're not taking on excessive risk.
Get comfortable with contracts.
They're going to be a part of your daily life
as you run your own consulting firm.