- Running a consulting firm means you have
to deal with legal issues.
You'll need to establish your firm
as a legal entity,
conduct contracting activities,
manage employment and contractor agreements,
and protect your intellectual property.
I highly encourage you to engage competent legal counsel
for these issues.
Your clients will insist you're legally able
to do business in their locale.
Every country, state, or locality has different rules
and requirements for setting up your business
as an entity.
You'll need to create multiple documents,
like an operating agreement, a company charter,
and employment agreements.
Once you have those documents,
you'll need to make governmental
and tax agency fillings to legally be in business.
When first starting out as a consultant,
you'll want to have a standard services agreement.
That document will cover the terms
of your relationship with your clients
and also spell out the work you'll do
and the fees you'll charge.
Many clients will insist you use their standard contract.
That's fine, just make sure you have your attorney
look it over first.
If your client doesn't have a standard contract,
suggest they use yours.
When drafting it, ensure it's fair and reasonable.
I've seen some attorneys draft very one-sided agreements.
All that does is make the relationship
with your client adversarial from the start.
The more reasonable you are,
the more reasonable your clients tend to be.
If you're unlucky, you may deal with legal disputes,
like contract violations, infringement actions,
and confidentiality breaches.
Knowing these issues and preparing for them
before they happen can make them easier to handle.
I know one consultant that had a contract dispute
with a client.
The client didn't want to pay him.
He had to get his attorney involved.
He had to threaten a lawsuit.
Now, eventually he got paid,
but that was time away from serving clients
and that relationship soured.
I have friends I do business with
and before Thought Leaders will do an engagement,
we have a contract in place.
Right now I'm working with a friend
who I've known for 10 years.
We're setting up a bunch of workshops at his organization.
Before we started, I send him over
our standard services agreement
and you know what?
He was more than happy to sign it
because he knows the value
of having clear expectations before any work is done.
And nothing can ruin a friendship faster
than a misunderstanding like that.
Good contracts and legal processes will protect your firm
as you work with your clients, large and small.
Don't overlook legal issues.
Give them the time and attention they deserve
to protect you and your clients along the way.