A consultant provides legal documentation entailing the details of the service to the client for which he is hired. This document is called a consultant agreement. The consultant here could be an individual or a company. The services can include products or specific services associated with a particular business niche like software, website development, etc.

7 Steps Why Consultant Agreement is Important

A consultant agreement defines all the details of the terms and conditions between the two parties. It also has various details like the scope of work, timeframe, payment details, confidentiality, and general terms. Based on the kind of business, the terms and conditions may vary, and so will the consultant agreement.

Since many companies are now outsourcing their requirements like software, financial, payroll management, recruitment, etc., consultant agreements become an essential aspect of any organization’s basic functioning. Various legal firms will help you in the formatting of the consultant agreement.

Why you should have a consultant agreement?

Whether your business size is small or big, if you are availing consulting services, word of mouth is something which you must not stick to. A proper document with all the details must be adhered to; many companies have their legal team that looks into it. Otherwise, there are legal firms that will render their services for consultant agreement formation.

It is always advisable to find a credible legal firm that can not only help in structuring the consultant agreement but at the same time, they can also gauge the agreements and find out flaws, if any.

Seven steps of a Legal Agreement

The next and most important part of our discussion is why you need a consultant agreement. Let’s understand these aspects:

1. Scope of work- One of the first things that will be present in any consultant agreement is the scope of work. This section will entail details about what is expected from the consultant or the services they will be providing. It will have in-depth details of the same. In case of any dispute, one can easily run through this section and cross-check. Also, there is a separate section of the Statement of Work, which has an in-depth illustration of the consultant’s work and services.
2. Date of commencement of work– While forming or screening a consultant agreement, one must go through this. It states when the consultant started rendering their services to the company.
3. Payment and fee details– One of the common causes of the dispute is the payment and fee. To avoid any hassle, the companies must have this section mentioned in the consultant agreement. This actually defines what is expected from the consultant and what fees need to be paid. In case the client wishes to renew the services, then the consultant agreement will also have the detail of the renewal fees that need to be paid.

   Another part of this section is the date of payment and the date on which the invoice will be sent. This piece of information is mandatory to avoid any hassle in the future. Usually, the consultants have a pre-decided set of conditions, which are generic, and that is later tweaked as per the client.

4. Defining the business relation– The next step of any consultant agreement is to define the business relation. Although it may seem obvious that a particular consultant is hired for a particular service, framing everything in black and white is paramount when it comes to business terms. The consultant acts on his/her discretion and doesn’t fall on the company’s employee list; hence, defining the business relationship with the consultant puts an end to any liabilities that can arise in the future.
5. IP Rights- A consultant agreement may also have a provision for IP Rights. This is especially applicable in case when the consultant is into a business of developing copyrightable work or technologies. A detailed enumeration of this section protects the IP rights of the consultants.
6. Consultant expense- In many cases, the consultant might need to have to resolve the queries. A consultant agreement must have the detail on who will be bearing the expenses of the consultant. Also, it must be clearly defined whether this will be a part of a single invoice or prepare a separate invoice for the same.
7. Mode of payment- The 7th and the key step in framing a flawless consultant agreement is that it must have the details of the payment mode like the bank transfer or via check. Although most of the transactions are done online, it’s important to mention this in the agreement to avoid any confusion.

 

Conclusion

These were the basic steps that must be taken into account while preparing a consultant agreement. The sole objective is to clearly define the business relation and services to avoid any confusion. With this legal form, both the company and the consultant know the services and payment terms.

Hiring an excellent legal service provider will lessen the hassle of agreement, preparing, and avoid any flaws.