What is Advisor Agreement Drafting?
An advisor agreement is a legal contract between a company and an external expert who agrees to provide the business with expertise. It explains how they will work together, including information about how to protect the company’s sensitive information.
If you need to draft an advisor agreement, you might wonder if you can do it yourself instead of seeking legal guidance.
Read the rest of this article to explore what you should include in an advisor agreement, how to draft it, and the benefits of hiring a lawyer to help you with the process.
What Key Terms Should You Include in an Advisor Agreement?
An advisor agreement should include the following essential terms and elements.
- Services. The advisor’s work scope must be clearly defined, down to meeting frequency.
- Commitment. How many hours per week or month the advisor is expected to work must be clarified.
- Payment. The advisor will be paid, usually in company equity, a cash retainer, or a combination of both. The payment structure must be detailed to avoid disputes.
- Vesting schedule. If the advisor receives equity-based compensation, the agreement should explain how and when they will receive their shares.
- Confidentiality. The advisor will have to agree to non-disclosure obligations to avoid sharing the company’s private information.
- Intellectual property (IP). The agreement must explain that anything the advisor creates during the term will belong to the company. This can include inventions or business strategies.
- Termination. If either party wants to end the agreement earlier than expected, the agreement should specify what is required, such as notice periods.
How Do You Draft an Advisor Agreement?
When writing an advisor agreement, there are some considerations to ensure the agreement is clear and fair to both parties.
Provide a Detailed Scope
The work scope is one of the most essential parts of the advisor agreement. This should go beyond the type of work the advisor is expected to provide, such as by including clarity about the maximum hours to be spent working for the company, how regularly the advisor should check in with the company, and the required communication availability.
Set up a Fair Compensation Clause
To ensure that the compensation structure is fair, the advisor should check that they understand all terms. Make the payment section clear and easy to understand, with no vague wording, so that there’s no confusion between parties. If a vesting schedule applies, the schedule must be transparent.
Understand IP Assignment
To prevent disputes over IP ownership, the agreement should include information about the IP the advisor is transferring to the company. There must be a distinction between the advisor’s previous IP or IP that they’re using for other companies, to prevent problems or a conflict of interest.
Include an Indemnification Clause
To protect you against financial losses from claims or legal actions, you might wish to include an indemnification clause. This should also prevent advisors from taking on too many risks when working with the company, which can make the agreement unfair.
How Does a Lawyer Help You with an Advisor Agreement?
Although you can draft your own advisor agreement, it’s advisable to consult a professional lawyer for assistance, especially if you’re dealing with a complex agreement or you’re concerned about missing any important information.
A lawyer will help you in various ways, such as by:
- Making the agreement legal. A qualified lawyer will make sure that your advisory agreement is aligned with all relevant laws, such as state laws, so that you remain compliant and prevent legal disputes.
- Managing and mitigating your risks. There could be legal risks in your advisor agreement that you haven’t noticed. By using a lawyer’s legal expertise, you’ll avoid putting yourself at risk and feel confident that the agreement is enforceable in court.
- Helping you beyond the drafting process. One of the biggest benefits of using a lawyer to draft your agreement is that they can engage in activities beyond the writing of your agreement, such as negotiating with the other party for mutually-favorable terms.
- Tailoring the agreement to your needs. Your advisor agreement should be customized to meet your specific situation and business working relationship. A lawyer will consider both.
- Conducting contract reviews. If you’ve drafted an advisor agreement but you’d like a lawyer to review it for accuracy and legal validity, you can hire a lawyer to conduct an agreement review.
Where to Find a Lawyer for Advisor Agreement Drafting
If you need to hire a lawyer to draft your advisor agreement, you might struggle to know where to find one. You don’t have to take lots of time to find the right lawyer. Use an online legal platform like ContractsCounsel.
ContractsCounsel is one of the largest online legal marketplaces providing access to a range of vetted lawyers. You can hire one of the experienced lawyers for a flat fee to draft your advisor agreement.
To request that a lawyer on the platform drafts your advisor agreement, you should follow these steps online:
- Go to the ContractsCounsel marketplace.
- Post your project for free. You should mention a few details to help you find the most suitable lawyer, such as the type of working relationship or why you need the agreement.
- Receive multiple bids from lawyers directly on the platform who have the experience to help you. This prevents you from having to search for a lawyer.
- Review the lawyers’ profiles. Take some time to go through the platform’s lawyer data, such as their location, client ratings for previous projects, expertise, and credentials. ContractsCounsel provides accurate, transparent information to assist you in selecting a suitable lawyer.
- Connect with a lawyer you think is best suited to your requirements and hire them to draft your advisor agreement for a flat fee.
