Consulting Agreement Review

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What Is a Consulting Agreement Review?

Consultants advise their clients on various matters, such as marketing, finances, and business. Before entering a professional relationship, the consultant should issue a consulting agreement allowing the client to retain specified services for a limited time at a specified compensation rate.

A business may also initiate the relationship and provide a consulting agreement or consulting services contract. The scope and complexity of services will alter each agreement, so personalized documents are essential to protecting all parties.

Here is an article that can help you understand the role of a business consultant and what a working relationship may look like.

Types of Consulting Agreements

Consulting is a broad field that encompasses a range of professionals and specializations. Someone may offer consulting services to a business in exchange for compensation even if they are not a consultant by trade. For example, a lawyer can offer legal consulting, and a marketer can be hired to review a company’s strategy and provide consulting advice.

Consulting agreements can be simple or complex, depending on the nature of the work. Therefore, your consulting agreement will vary based on your needs and the nature of your working relationship with the consulting party.

Business Consulting Agreement

This contract is between a company and an independent party offering consulting services for a fixed compensation rate. The legal agreement helps protect both parties from financial loss and liabilities.

In a business consulting agreement, the company can include clauses such as a nondisclosure agreement, non-solicitation agreement, and noncompetition agreement that prevent the consultant from providing services to competitors.

A non-compete agreement, however, varies in enforceability by state. Some states will not permit businesses to use them under certain pretexts. So, reaching out to an experienced contract lawyer is the best way to ensure your document is comprehensive and compliant with the law.

Independent Contractor Agreement

Consultants work for themselves, not their clients, so they are not offered employment agreements. Instead, they are given a 1099 independent contractor or freelance agreement that specifies their role and establishes a transparent working relationship.

Independent contractors are not entitled to employee benefits but still have obligations to perform to be compensated. The independent contractor agreement protects employers’ interests while also giving the consultant greater security for payment.

Master Consulting Services Agreement Contract

A master consulting services agreement is issued by a business to a consultant to protect its employees and its business. At any time in a working relationship, contractors and companies may face conflict over factors such as:

  • Work hours
  • Job Expectations
  • Deliverables

The master consulting agreement covers many topics related to the consultant’s job, such as the nature of their relationship with the company, insurance requirements, fees, payment methods, confidentiality, moral rights, and termination clauses.

Here is an article with a sample master consulting services agreement by ContractsCounsel.

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How Do I Review a Consulting Agreement?

You can submit your consulting agreement to a lawyer for professional review before signing it. Attorneys are the most reliable sources when determining any document's legality, validity, and thoroughness.

If you review a consulting agreement on your own, you should ensure that it contains all the relevant details for your company or business. You should also include provisions that protect both parties from financial loss or personal liability, such as hold harmless clauses or indemnification.

Here is an article with ContractsCounsel’s guide to consulting agreements.

What Should be Included in a Consulting Agreement?

Every consulting agreement has several key elements that must be included:

  • Scope of work and services. The consulting agreement should begin by identifying the consultant and client, then explaining the types of services they will be providing. Rather than simply stating something general, like “marketing services,” it is best to be specific about what areas of their company you will be providing consultation for.
  • Rate of compensation and payment details. The contract should specify how much the consultant will be paid for their services, how often they will be delivered (e.g., on the first of every month), and what methods will be used to pay them, such as a direct deposit.
  • Start and end date of services. It is important to distinguish when the company’s working relationship with the consultant begins and when it will end. If they occur on an as-needed basis for an indefinite time, you should still implement a billable pay schedule, such as monthly or quarterly.
  • Timelines and deliverables. Many companies enlist a consultant for specific projects, which makes deadlines of the utmost importance. The agreement should detail any deliverables the consultant must deliver and by what time they are required. As a consultant, you can add a clause that states you are not responsible for any losses the client sustains if they do not respond promptly or fail to provide the resources you need to fulfill your role.
  • Dispute resolution. It is helpful always to include a dispute resolution clause that details how parties will resolve any future conflict. Dispute resolution can prevent lengthy legal battles and financial loss on both sides. In addition, if a conflict does lead to a lawsuit, the dispute resolution clause can determine who is responsible for paying legal expenses.
  • Termination agreement. Rather than allow either party to end the working relationship without warning, a termination of services agreement can reserve each party’s right to leave the relationship with written notice. Consultants may also stipulate that if a client ends their relationship before their billing period, they are responsible for paying them a per diem rate from the time of their last payment.

Here is an article with more information on how to write a consulting agreement and what details you should always include.

What Do I Need to Know Before Signing a Consulting Agreement?

Hiring consulting services requires preparation, namely drafting a legal agreement that ensures both parties are protected throughout their relationship.

Before signing a consulting agreement, you should ensure that the document has not been executed before review. Likewise, you should never do or accept work before entering a written legal agreement.

You should also ensure that the document specifies the nature of the consultant’s role, any timetables or deliverables they must meet, and the services they are expected to provide. These descriptions should be as clear as possible to prevent the client from requesting additional work that is not compensated.

Make sure that both parties agree with the terms and conditions of the agreement, including termination clauses, reimbursement procedures, and compensation models.

How Much Does It Cost to Review a Consulting Agreement?

A typical consulting agreement cost is $620.67 on ContractsCounsel’s marketplace. The exact amount can vary as each lawyer has their rates, usually between $200 to $450 an hour. In addition, the length of the agreement, complexity, and needs of each client influences the final cost.

Reviewing a consulting agreement may cost less than the average price of drafting one. In this instance, the lawyer may charge a flat rate fee instead of an hourly rate.

Here is an article with ContractsCounsel’s guide to consulting agreement costs and factors that affect them.

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