Advice for ending consultant contracts on good terms

Just as when you have to let an employee go, firing a consultant can be a volatile affair. Here's some advice from a consultant who's recently gone through a rough transition. Get his recommendations for a less stressful end to consultant contracts.

Antonio Green, a senior network consultant with Verde Network Consulting in Orange, CA, wrote TechRepublic to tell us about the bad blood that resulted from a terminated contract between his firm and a client. The client accused Verde of breach of contract and tried to sever its ties with the company. Verde sought legal action and won restitution.

Greenbelieves his story provides valuable lessons for CIOs who want to avoid unpleasant endings to consultant/client relationships.After you’ve read his anecdote and advice for smooth transitions when consulting contracts end, no matter the reason, send us your advice or post your thoughts in the discussion.

The bad breakup
A few years ago, Verde began a service level agreement (SLA) with a construction company in Orange County, CA. The contract specified that Verde would maintain the company’s network, with the exception of a “Team Internet” server that was being used as a firewall and mail server. “Team Internet” was a UNIX-based server leased from the construction company’s Internet service provider (ISP). The ISP wouldn’t release passwords for accessing the box, so excluding this server was mandatory, Green explained.

Halfway through the contract, a change in office managers prompted Green to ask his on-site administrator to meet with the new manager and explain the details of the SLA. The new manager refused him for a month, saying she was “really busy.”

“She also asked that he not ask her to go over the SLA during ‘contracted hours’ because he really should be working on computer stuff,” Green said.

Green arranged a lunch meeting with the office manager to explain the contract, and she agreed to see him in a week. But just two days later, a crucial misunderstanding took place.

After receiving an emergency call for help, the administrator arrived on-site and learned that the staff couldn’t access the Internet and was unable to pull accounting data from a remote office in San Diego. This was an emergency situation because all of the construction company’s month-end accounting needed to be completed before the next morning.

Forty-five minutes of troubleshooting revealed that the problem had to do with the firewall. He told the office manager that it was a firewall problem, left the site, and e-mailed Green that night with a breakdown of what occurred and the hours spent on-site.

The beginning of the end
Green received a phone call from the office manager the next morning. She was very upset because they still couldn’t finish their month-end processing.

“I asked her if she had called their ISP,” Green said. “She responded with a wondrous, ‘No.’ I then explained to her that the problem was with the firewall and that only their ISP had access to it.

She informed me that she was unaware of this and thought that our administrator was leaving to ‘get a new firewall or something,’” Green said.

Green and the office manager kept their lunch appointment, and Green began explaining the SLA to her. The office manager criticized the level of service provided during the ISP incident.

“I explained that the owner and the CFO felt that the coverage was adequate at the time of the contract and that they did not have a budget that could cover more service,” Green said. “She then decided to lecture me on how crucial IT services are and that I should have pushed the coverage issue so that incidents like the ISP one could be avoided.”

Green reminded her that she had refused to sit down with the on-site administrator to go over the details of the SLA, which might have saved her some time and worry. Feeling that the lunch was “coming to a sharp close,” Green handed her the invoice for the emergency hours and said his good-byes.

Legal action
The construction company refused to pay for the emergency hours and eventually sent a letter that ended the contract “due to a breach in contract” by Verde. That same day, the company denied the administrator any further access to the building.

“I immediately drafted a letter explaining that they were to pay out the remainder of the contract per conditions of early termination in the contract and that no breach was committed,” Green said. “I then asked for remedy for whatever breach they ‘felt’ was committed.”

Green proceeded with a lawsuit against the company, which ended up paying the full amount of the remainder of the contract plus attorneys’ fees after arbitration.

Know the details of the contract
Green said a big problem with consultant/client relationships is that company management often considers consultants as their employees and treats them accordingly. However, the “paper that binds a consultant to a company and vice versa is the contract,” Green said. He advised that both consultants and any staff that deals directly with the consultants be fully up to speed on the parameters of the agreement.

When he’s on-site with a staff of consultants, Green outlines the services they will be providing in detail so that there’s no question what they should and shouldn’t be doing. If the office manager at the construction company had understood the stipulations in the contract, she and the company would have been spared lost time, wages, and worry.

“I believe that if the management at the construction company were more supportive, she would have been more informed,” Green said.

Get as much information as possible from exiting consultants
Green suggested that it’s a good policy to conduct exit interviews with consultants, especially if you aren’t happy or satisfied with the services provided.

”The interview would provide an outlet for the consultants to communicate any frustrations or information they believe management needs to know before they leave,” said Green, which may provide valuable information for the next consulting engagement or shed light on previously unknown internal problems.

To create a seamless transition from one project team to the next, CIOs can request that the consultant provide a synopsis of the remaining work. Green said that at the end of contracts, he often has his technicians go around to each employee at a client site and ask if there is any work left undone. He keeps a list of the tasks and provides it for the new consultants.

Pay for overlapping training time if necessary
As for training, Green recommends asking the consultants directly if they’d mind schooling their replacements about the project. If the contract ends on good terms, the consultants may agree to it. If not, and if the training is absolutely necessary, you may have to fork over a few more bucks to make it happen, he said.

The construction company actually asked if Green and his administrator would “show the new company around and provide them with all the necessary passwords for the network,” after it had terminated the contract. At that point, Green said, “The construction company incinerated their bridge with us and we had no intention of doing it because of the legal battle they entered with us.”

Give consultants proper notice
Green provided several other tips that CIOs should consider when a consultant’s contract ends. First, he suggested that consultants be given at least a month of notice so they can “look for greener pastures.” Just as businesses appreciate at least a two-week notice from departing employees to find suitable replacements, consultants appreciate advance notice that they’re losing their paycheck so they can look for more work.

“This also takes the edge off of a last-minute notification that can get pretty ugly,” Green explained. ”I was lucky to successfully bid on another contract one week after this one ended.”

Pay what you owe to avoid legal battles
If, when you notify the consultant of his or her departure, you have a fear of retribution for any reason, Green advises that you “cut your losses” and move on. He suggests paying the consultant for the remainder of the contract either in a lump sum or by continuing with billing arrangement you have in place.

“This construction company also had to pay hefty attorneys' fees because it tried to cut [ties] without taking into consideration the losses,” Green said.

He advises that you do everything you can to end the relationship on positive terms. He said that if all had been amicable toward the end of the contract with the construction company, Verde would probably have provided the new consultants with the necessary tools and information to continue the work.

It wouldn’t have taken much to keep things from turning ugly, Green said. “A smile and good negotiation skills will go a long way.”

Wanted: Your advice and experience
Have you had a difficult time disengaging from a consultant or consulting firm? How did you handle it, and what advice do you have for other CIOs for keeping strife to a minimum? Send us your thoughts or post them below.


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