Wednesday, January 25, 2006

Large overhead for consultants: agreeing to contract terms

Am I the only consultant who has to spend a lot of time working out details for consulting contracts? I have a policy of never signing anything that I don't totally understand and agree with. I try to get customers to just use my standard NDA and consulting agreement but it is too simple for some tastes. The worse case scenario for me is that someone wants me to do a small job (perhaps 4 or 5 hours of work), we agree on the telephone what I am supposed to do, then they email me their "standard contract" that is many pages long, difficult for a non-lawyer to understand, and usually contains many terms that just don't seem required to me for a job where my customer and I are not sharing any real intellectual property except for the software that I am writing for them and that they will own when I am paid. Some of the worse terms, from my perspective, call for my divulging everything that I am working on (can't do this because I am NDAed with other customers) or say that I can not work on any similar projects for a specified period of time (OK if the work in question is a long term project but not OK for small one day jobs).

Sometimes long contracts are required. Long term engagements can require more complicated agreements because more IP is shared and a consultant might need access to a customer's software and/or servers, etc. Anyway, I think that agreements should be as simple as possible but still protect both side's interests.

PS. While I was writing this, I paused, and decided to offer customers who use my NDA and contract a 12.5% discount. Anyway, I just updated my web site so it will be interesting how many people take me up on this offer over the long term.

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