Ensuring the success of a consulting job begins at a very specific point: negotiating the consulting agreement with the contracting party before any official work begins.
This first and vital phase of a work relationship is in place to:
- Anticipate roadblocks, unforeseen circumstances, and other issues.
- Understand shared interests.
- Set a timeline for the project and payment.
- Parse out payment and compensation specifics.
- Discuss insurance.
- Clarify indemnity.
- Discuss non-compete and non-solicitation clauses.
- Address rights and usage.
- List deliverables.
Having a detailed, thorough, and fair consulting agreement will not only make your project and relationship with your the contracting company clearer and more legally sound, it will also make the consulting job itself a better experience for you from beginning to end.
6 Steps To Mistake-Free Consulting Contract Negotiations
Consulting contracts take a wide variety of forms, ranging from short 3-4 page documents that cover the basics to novella-length tomes that go into great detail regarding the shape and scope of your work. But whatever your contract looks like, there are a few steps you can take to make more certain that your upcoming consulting job goes starts off on the right foot and continues down the right path until its last day. Below, we’ve shared six big pieces of advice to keep in mind when negotiating your next consulting contract.
- Know what you want and your bottom line. There are two pieces of information that only you know during the negotiation process: what you want out of the deal ideally and what you would compromise for in order to land the job. Before any negotiating begins, the answers to these two questions should be concrete: thought through carefully and written down for your own reference. When thinking about the lowest rate that you would work for, don’t hesitate to do objective calculations of how much you need to make a profit or break even–and also don’t hesitate to consider how much you will need to make to feel positive, inspired, and enthusiastic about your work during the entire timeline of the project.
- Be willing to compromise. Never forget that negotiations are ultimately about compromise and understand that you are not going to get everything that you want, exactly the way you want it. Understand your shared interests, be flexible where possible, and get creative with compromise. If they cannot meet you halfway when it comes to schedule or payment, ask for more when it comes to a different aspect of the project. If you follow the point above and know exactly which cards are in your deck and exactly where you draw the line when you enter the conference room, compromise will be much easier.
- Keep the big picture in mind. When it comes to the technical aspects of a contract, it can be easy to get lost in a sea of tiny details. Although these details are obviously each important to address, never lose sight of the end goal and the end product. You can reduce conflict and speed the process by letting go of little battles that don’t greatly affect you and focusing on the issues that have real importance. You can have a strong contract that doesn’t get lost in every last tiny point and that doesn’t involve negotiating every single last issue.
- Beware of differences between cultures. You may be an ace negotiator in the United States, but overseas your approach and tactics may be less effective and even downright harmful to your goals. Accept that there are cultural differences when it comes to international consulting negotiations that can affect everything from how you enter a room to how you form personal relationships during the process. Realize that cultural differences can feel even greater if there is a language barrier as well. Do your research, be patient, and be aware.
- When in doubt, get legal help. Depending on the circumstances of your job and contract, you may or may not require an attorney to look over the document and make certain that it is legally sound and good for your business. However, contracts can be filled with legal terms and technical talk, and if you do not understand any one part of your contract, it is vital to reach out to someone who is on your side and who can help. An attorney will be especially helpful at looking at issues like non-compete clauses, indemnity, and insurance. An attorney will also be especially good at seeing what is missing from a contract that will protect you and your interests.
- Understand that walking away isn’t the end of the world. Far too many consultants go into contract negotiations thinking that a failed negotiation is the worst possible outcome. However, that is simply not the case. Entering into a negotiation that is bad for you or your business is far worse than walking away from a bad deal. Realize that there are a number of reasons to decline a contract, from not being able to negotiate a reasonable payment, to not agreeing on a practical timeline, to simply not feeling good about the team that you will be working with. Understand that you can turn down a consulting job without angering or upsetting your potential business partners and that there will always be other, possibly better, opportunities down the road.
All of the above pieces of advice point to one final recommendation: do not rush your contract negotiations. Like or not, negotiations are necessary before a consulting job begins – they are a vital part of the project that require a close eye, thought, and open communication about your wants and needs. Negotiating a contract with care and confidence doesn’t just protect you and your goals, it also sets the foundation for a successful relationship between you and the contracting company.
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