Whether the problem stems from a misinterpretation, a lack of clarity, or perhaps even the client’s unrealistic expectations, contract disputes can signal project failure or even prevent them from ever getting off the ground. The single best thing we can do to ensure effective consulting engagements is to draft clear, mutually satisfying contracts with our clients. The following list provides you with some points to remember when negotiating contracts with your clients.
- Step one: Think about the concept. A contract is essentially just an agreement between the consultant and the client. But because this agreement is drawn up as a legal document and must be agreed to and signed by both parties, it becomes especially important that all parties understand each part of the agreement. A clear contract with the client makes our work easier and more effective because it clarifies roles and responsibilities, deliverables, and deadlines, so there should be no confusion.
- Step two: Make time for negotiation. One of the best ways to ensure a successful contract is to schedule a contract meeting so that both parties can negotiate terms. Making time for both sides to be heard and to understand each other’s needs will build trust and strengthen the relationship between you and your client.
- Step three: Invest time and thought into your side of the agreement. Before your contract meeting, invest some time thinking about what you already know about the project, what you need to know, and what your needs are. Consider what you are willing to offer the client both professionally and personally during the project, what the client will want from you, what resistance you might encounter, and how you will deal with it. Also make sure the right people from the client organization are invited to this meeting. A clear contract negotiated by the wrong person is doomed to fail.
- Step four: Ask questions and actively listen to the answers. While planning for the meeting, you will have identified questions you need to ask the client about the project. Ask those questions during the meeting and truly listen to the answers—especially those answers that may be unspoken but implied. It’s important that you learn all you can about their goals for the project, and make sure you ask about the role they want to play in the project as well.
- Step five: Be specific. Some clients will want to slide through the contract meeting quickly, thinking that both parties can work it out as you go. Remind those clients that the agreement must consider specifics if the project is to be successful, and be persistent in getting detailed information.
- Step six: Understand the big picture. It’s important to know how the project fits into the overall business goals for the organization and where the priority of this project falls in relation to other ongoing efforts. The better you understand the big picture, the more valuable you can be to the client later. And the best time to understand that is up front, during the contract meeting.
- Step seven: Be willing to pass. If the client isn’t willing to meet your needs in the contract or if you feel the client is making unrealistic demands, be willing to walk away from the work. If you and the client cannot resolve your differences, the best answer for both parties may be to “agree to disagree” and move on. Be honest with yourself and recognize the red flags when they fly.
If you want to improve your contract negotiation skills or your consulting skills in general, read or reread Flawless Consulting: A Guide to Getting Your Expertise Used (Jossey-Bass, 1999) by Peter Block. The chapters on contracts alone are worth the purchase price.
Kevin Eikenberry is president of the Discian Group, a learning consulting company in Indianapolis.Got a consulting question for Kevin? E-mail it, and he’ll consider it for an upcoming column.