Checklist: 5-steps for robust contracts for consulting services

Successfully navigating the consulting industry and building strong business relationships requires a robust contract for consulting services with your clients. From defining clear expectations in writing to securing payment terms and clarifying intellectual property rights, these 5 steps will equip you with the knowledge necessary to navigate the complexities of creating your own contract for consulting services.

1. Ensure you have a written contract for consulting services

Even if you’ve worked with a client hundreds of times in the past, having a written contract for consulting services is always necessary. This applies even to projects you might consider minor or for a small fee. A written contract provides a framework for the relationship between you and your client, as well as a roadmap for the project.

A comprehensive contract for consulting services provides an assurance that the client will pay the consultant the agreed amount within the designated time frame. It also ensures that everyone is clear about their interpretation of the scope of services, deadlines and ownership rights. It sets expectations so there is no room for misunderstandings later on.

2. Define the scope of services clearly

When outlining the services underpinning consultancy engagements, precision is key. Clearly defining the scope of services, project deliverables, milestones, timelines, and any specific requirements is essential. This not only avoids ambiguity but also helps manage expectations and prevent disputes. It's also important to specify what is out of the scope of the consulting services, ensuring clarity for the client regarding what they're paying for.

Being precise about the scope of work demonstrates a commitment to delivering quality services and aligns the parties on project objectives from the outset. Moreover, detailing key milestones or deliverables can set tangible goals when defining the success of the services.

For more tips on what to include in your scope of services, check out our legal experts' top tips.

3. Include crystal clear payment terms

Ensuring that you have a clear roadmap for payment is the cornerstone of every contract for consulting services. Your payment terms should dictate exactly how and when you will receive any payments from your client.

Your contract for consulting services should eliminate any ambiguity regarding payment expectations by:

• specifying the amount to be paid and if applicable, your rate and/or payment schedule;

• confirming your preferred method of payment;

• setting out if there are any upfront deposits or milestone payments; and

• addressing the consequences of late payments.

As a consultant, defining these terms before starting any project is essential. Whether you work on an hourly/day rate basis or prefer fixed rates with upfront or milestone payments, clarity is key to smooth operations.

As stated above, setting out the consequences of defaulted payments is also important. Although many clients promptly make payments for consulting services, there may be occasions when you need to chase clients who have failed to pay your invoices on time. For this reason, your contract must address the consequences of late payments, providing a mechanism for recourse if necessary.

For more guidance on payment terms in contracts for consulting services, check out our handy guide.

4. Ensure your IP clause aligns with your intentions

Intellectual property rights are legal rights that protect creations of the mind, such as copyrights, trademarks, and patents. When you create original intellectual property as part of your consulting services, you, as the creator are automatically the owner of the IP. However, depending on the terms of your contract, ownership of the IP may be assigned or licensed to the client so they can use it as part of the services.

As a general rule of thumb, a consultant’s terms will usually confirm that the consultant owns the intellectual property rights in the work that it creates until the client has made full and final payment. After this, the IP rights will be assigned to the client. This ensures that the client pays you before they use the work you have created as part of the services without your permission.

It is also common for consultants to include terms that state any intellectual property created by the consultant as part of the services will continue to be owned by the consultant but will be licensed to the client to use the services, either for the duration of the project or perpetually (i.e. forever).

The structure of your intellectual property clause is entirely up to you (and to some degree, based on your client’s wishes). However, you should ensure that the wording of the clause aligns with your intentions. As a consultant, you may create or utilise important IP as part of your consulting services that you would not want to inadvertently assign to anyone else by way of your own contract terms. For this reason, consultants must take the utmost care when drafting or agreeing to IP clauses to ensure the terms reflect their intentions to protect themselves, their intangible assets and ultimately, their revenue.

Docue's sample contract for consulting services includes a detailed intellectual property clause to prompt you to remember to carefully align your IP clause with your intentions for any pre-existing and new IP.

5. Store your contracts safely and set reminders for key dates

It's crucial to maintain meticulous records of each contract for consulting services that you enter into. Once your client has signed the contract, ensure it's securely stored for easy access if needed. Additionally, note down important details such as deadlines and specific obligations within the agreed timeframe. This practice promotes effective project management and serves as a valuable resource in case of any disagreements about any aspect of the contract in the future.

A great advantage to using Docue to create and e-sign your consultancy agreements is that you can also store the agreement in Docue’s storage vault, Docue Drive, to ensure you always have quick and easy access to your contracts in one place with handy reminders.

Sign up now to use Docue's contract for consulting services template.