Understanding Consulting Contracts

My actual New Year’s resolution is to put out more informative content. Let’s start with payment terms in a contract: 1) What is Payment Based on? Why are you paying? “Because they are doing work for me.” Sick, great response. I mean specifically, why are you cutting a check at that very moment? What triggered the need to pay (major project item, a time frame passed, job done, etc)? 2) Payment Structure There are many different ways that payment can be structured. Usually it’s dependent on the type of work (maybe someone is building software for you) and relationship of the parties (person or company is working with you on an ongoing basis). 3) Per Milestone/Project A common structure is payment per stage of a project (or just completion). Think construction: x% up front, x% once you hit some critical path item, and then finally x% when the job’s done. If this is what you’re doing, a clearly defined scope and understanding amongst the partiesis key. If the vendor/contractor gets paid after “kitchen repaired” and you thought that included appliance electrical work (and it doesn’t), it’s a payment dispute. 4) Quarterly/Monthly/Weekly Pay You could be paying for ongoing work that may end on a certain date in the future (or not). Think IT support for your company. Generally, you’re going to get an invoice on a certain day and have to pay within x calendar days (called Net X days). Timing of payment is important here. Can you pay within 15 calendar days (Net 15) of the date of an invoice? Maybe your company does check runs twice a month so that’s fine. Maybe that’s too fast for your accounts payable folks (or you). 5) Bespoke Payment Sometimes payment terms are unique and based on the industry/type of service or product. Like paying a base subscription fee (monthly payment) and an amount in additional once a certain amount of data has been used (milestone). 6) General Considerations A) Make sure there is a mechanism in place to handle disputed payments (like the kitchen example) (if you can hold that payment and pay whatever isn’t in dispute). B) If you’re the vendor, collection language is important (interest + fees). C) What happens to payments made upfront? Is it a deposit? If so, what happens to it? (Applied at the beginning? The end? Returned if work isn’t performed?) D) Can you off-set what you owe by how much you paid to fix the work the vendor did? E) What if we terminate the agreement? Consider language that clearly defines exactly what is owed (and what isn’t) when one party terminates the contract. F) Is payment final or just an estimate? Clarify, clarify, clarify. G) Is there a mechanism in place for when the scope/time/contract price changes? Very important and needed by both parties. H) In the same vein as G), are you approving (in writing) changes to the contract? Just a quick, non-exhaustive list of considerations for payment terms. Consult with an attorney.

Today’s contract tip explains some basics about governing law provisions, also known as choice of law. Here are three things to remember about this provision: 1. Choice of law is different from choice of venue I sometimes see these concepts muddled in discussions. Choice of law identifies the substantive law under which the contract should be interpreted. Choice of venue identifies the location of the litigation. 2. Use nexus words to narrow or broaden to what the choice of law applies Use “arising under” to keep it narrow and “arising under or related to this Agreement” to broaden it. The intent of the latter wording is to apply to all tort claims too. I prefer the broader approach to minimize fighting later on over what is included and not included in your choice of law. 3. Avoid having choice of law and choice of venue in two different jurisdictions Yes, you can select New York law to govern and require litigation in Delaware. But why would you? You’ll have procedural matters governed by Delaware statutes and substantive laws by New York. That’s like taking two unrelated puzzle pieces and smushing them together. Plus, both sides need two sets of attorneys or need to use an attorney barred in both states. It makes the case much more complicated than it needs to be. Instead, follow the KISS method. Keep it simple and keep governing law and venue in the same state. What other points about governing law would you add to this list? #HowToContract #contracts #lawyers #contractdrafting

Think overdelivering will keep your clients happy? Think again. Here’s how to avoid burnout as a consultant. When you shift from a full-time role to consulting, it’s easy to fall into an old trap: treating every opportunity like a full-time job. Overdelivering. Overextending. And ultimately, burning out. On a recent Business Building call with clients, I shared with them... "The most nefarious thing is the story we tell ourselves, but we’re also setting expectations by overextending." The story? That if we don’t give everything, we won’t land (or keep) the client. But here’s the reality: Overextending doesn’t just exhaust you, it sets the wrong expectations. Clients come to rely on extra hours, unlimited availability, or added scope... without understanding the real value of your work. The result? You undervalue yourself, misalign expectations, and risk sacrificing long-term success. Failing to set boundaries as a consultant creates: • Burnout: You feel drained, losing the passion that made you start consulting in the first place.    • Scope Creep: Projects spiral beyond the original agreement without compensation.    • Misaligned Value: Clients undervalue your expertise because they see your time as endless.    The Fix: Set Clear Boundaries To protect your time and deliver impact without overextending, implement these strategies: 𝗗𝗲𝗳𝗶𝗻𝗲 𝗬𝗼𝘂𝗿 𝗦𝗰𝗼𝗽𝗲 𝗘𝗮𝗿𝗹𝘆 Clearly outline deliverables, timelines, and expectations in every proposal. 𝗖𝗼𝗺𝗺𝘂𝗻𝗶𝗰𝗮𝘁𝗲 𝗔𝘃𝗮𝗶𝗹𝗮𝗯𝗶𝗹𝗶𝘁𝘆 Set working hours and response times upfront. Example: “I’m available for calls between 9 AM and 2 PM on weekdays.” 𝗦𝘁𝗮𝘆 𝗙𝗶𝗿𝗺 𝗼𝗻 𝗔𝗴𝗿𝗲𝗲𝗺𝗲𝗻𝘁𝘀 If additional work arises, renegotiate the contract. Example: “That’s outside the scope of our initial agreement—let’s discuss an add-on package.” 𝗥𝗲𝗳𝗿𝗮𝗺𝗲 𝗢𝘃𝗲𝗿𝗱𝗲𝗹𝗶𝘃𝗲𝗿𝗶𝗻𝗴 Focus on delivering outcomes, not overcommitting your time. Your impact comes from results, not the number of hours you spend. 𝗖𝗵𝗲𝗰𝗸 𝗬𝗼𝘂𝗿 𝗦𝘁𝗼𝗿𝘆 Ask yourself: “Am I overextending because I’m afraid of losing the client? What evidence supports that fear?” Boundaries don’t just protect you, they elevate your client relationships by reinforcing your value and professionalism.

The contract was practically screaming at me, but I couldn’t get anyone else to hear it. A few years ago, I reviewed a vendor agreement for consulting services and three things stood out immediately: 1. The terms were completely one-sided in the vendor’s favor, with the vendor maintaining IP ownership in all deliverables we were paying for. 2. There were no financial controls whatsoever. No spending caps, no limits on fee increases, and they could raise rates whenever they felt like it. 3. The expense requirements were excessive. First-class airfare, reimbursement for every small expense, and hourly rates higher than what Big Law partners charge. So what was this contract telling (yelling at) me? That this vendor was going to overcharge us. I raised these issues with the business team, but they wanted to proceed because the work was “urgent” so never had an opportunity to negotiate and mitigate these risks. Months later, here’s what happened: 1. Mysterious consultants started appearing on calls and invoices, people never listed in the original SOW. And they increased their fees just one month after signing. 2. Invoices came in much higher than expected, quickly exceeding the budget the business had allocated for the project. 3. The business was unhappy with the vendor because the work quality didn’t justify the cost, plus there was substantial internal time spent reviewing invoices and requesting additional budget. You see, contracts tell us more than what the terms are, they tell us what kind of relationship we’re going to have. I could see it, but the business couldn’t. So u was unable to mitigate a known risk. That’s when I realized I needed to get better at communicating contractual risks to my business partners in ways they could understand and act on. In my next post, I’ll share how I turned this hard lesson into a framework that helped me get buy-in from the business team when facing similar red flags. What do you think made all the difference? #contractualrisks #businessclients #legalteam #inhousecounsel #contractreviews

Most lawyers will tell you indemnity just means reimbursement. They’re wrong. Because indemnities don’t just say “I’ll pay you back if you lose.” They say “the risk belongs to me the moment the claim appears.” That’s a huge difference. Without indemnity: You get sued, you defend yourself, maybe years later you try to recover from the other party. With indemnity: The other party may have to step in immediately - cover your defense, control the case, and pay any settlement or judgment. And in some jurisdictions, indemnities are treated very differently than normal damages. 1. In the UK, indemnities often bypass two big contract limits: - Mitigation: the indemnitee doesn’t always have to show they tried to reduce their loss. - Remoteness: losses that might be “too remote” under normal contract law can still be claimed under an indemnity. 2. California: vague clauses won’t cover negligence. The law requires express language if one party is expected to indemnify the other’s own negligence. 3. Delaware: indemnities can cover first-party claims (your own losses, not just third-party claims) - but only if drafted explicitly. Many drafters forget this. That’s why parties fight for indemnities - they’re not just stronger reimbursement, they’re a different liability regime. So the myth “indemnity = reimbursement” misses the point. The real question is: what risks are you reallocating, and how will the forum treat that reallocation? That’s why smart drafters interrogate indemnities as a system: scope, trigger, defenses, survival. __ This post is for educational purposes only and does not constitute legal advice. It should not be relied upon as a substitute for professional legal counsel tailored to your specific circumstances. __ Hello, I'm Gvantsa, Partner at GBPLO. I help entrepreneurs and high-growth companies close complex cross-border deals, secure IP, ensure enforceability across jurisdictions, and transform legal operations into profit-protecting, efficiency-driven systems.

SCOPE CREEP. This is one of the most common problems I see when reviewing contracts. I have been guilty of it many times myself. What is it? It is when project tasks expand beyond the agreed scope of the agreement without additional compensation. The solution? A specific SCOPE OF SERVICES provision. A scope of services provision defines the exact work a service provider is expected to perform under a contract. It sets the boundaries of what is included (and excluded), preventing misunderstandings and limiting “scope creep.” 💡 WHY IT MATTERS: Without a clear scope, projects can quickly grow beyond the original agreement (or what you thought was agreed!!), leaving you overworked, underpaid, and frustrated. A strong scope of services provision ensures both parties know EXACTLY what to expect and helps prevent scope creep. ➡️  A SCOPE OF SERVICES PROVISION SHOULD INCLUDE: *The specific services to be delivered *The timeframe or number of hours allocated *Deliverables (reports, meetings, training, etc.) *Explicit exclusions (what’s not covered) *Process for adding new services (e.g., written amendment, additional fee) ✅ EXAMPLES OF THE GOOD AND THE BAD: 👎🏻 Bad: ““Consultant will assist Client with preparing for investor presentations.” ➡️ Why? Sounds narrow, but could balloon into pitch deck creation, financial modeling, or coaching. ✅ Good: “Consultant will review and edit one investor presentation deck (up to 20 slides) and conduct one 90-minute practice session. Financial modeling is excluded. Work beyond this scope will be billed at an hourly rate of $500.” ➡️ Why? It clearly defines the deliverables (one deck, 20 slides, one session), sets exclusions (no financial modeling), and establishes how extra work will be billed. ⭐️ PRO TIP: NEVER ASSUME. Just because you know what a clause means (or you think the other party does) does not make it clear. Contracts are not written just for “you two” to understand. Contracts are written so that a third party (like a judge, mediator, or new business partner) could read them and understand exactly what was intended. If the language is not specific enough for an outsider to interpret without guesswork, it is too vague. And you are opening the door to disputes and scope creep. ⬇️ Have an experience you want to share re scope creep? Drop it in the comments. ⬇️ *********For informational purposes only. Not intended as legal advice.

The Most Overlooked Loophole in International Agreements The "governing law vs. jurisdiction" disconnect. Companies carefully negotiate which country's laws apply (governing law), but carelessly accept the other party's home courts (jurisdiction) to settle disputes. This creates a dangerous scenario: foreign judges interpreting your preferred law with unfamiliar principles and procedures. Example: A contract specifies English law (known for commercial certainty) but grants jurisdiction to Indonesian courts. When disputes arise, the Indonesian judge may: - Have limited experience applying English legal principles - Apply local procedural rules that undermine substantive protections - Be influenced by local public policy considerations - Take significantly longer to reach resolution I recently watched a client spend 3 years and $1.2M pursuing a clear contract breach because they overlooked this mismatch. The solution? Align your governing law and jurisdiction provisions. If you choose English law, select English courts or arbitration seats. If circumstances require separate choices, ensure the jurisdiction has a strong track record interpreting your chosen law. This seemingly technical detail can determine whether your beautifully drafted contract is worth the paper it's written on when challenges arise. What legal misalignments have you encountered in cross-border deals? #crossborder #law #international #IP #contractlaw #lawyer

"Each of Vendor and Client shall indemnify the other for any third party claims arising out of the Services." For some of you, the #ContractTrap in that statement seem obvious. But sadly, I still see language like this a fair amount. The problem is that it's not clear at all which party is indemnifying the other. If Vendor gets sued for IP infringement based on Client's use of the Services, is Client supposed to indemnify Vendor? If Client gets sued for the same thing, is Vendor supposed to indemnify Client? And what if they both get sued (as often happens)? Are they each indemnifying the other? None of this makes much sense. And when things don't make sense, you don't know how they will play out if there's a dispute. I suspect that the way this language appears is that someone's template has a broad indemnity in their favor - e.g., "Vendor shall indemnify Client for any third party claims arising out of the Services." And then the Vendor demands that clause be made mutual, resulting in the problematic language. So what do you do instead? Think about what each party really should be indemnifying the other for, and specify that. If it makes sense for both parties, the fix could be as simple as "Each party shall indemnify the other for claims relating to the Services to the extent arising out of the actions or wrongful omissions of such party." Sometimes it's more complicated - you may want to specify certain claims (e.g., IP infringement) as the risk of one party and other claims (e.g., data security) as the risk of the other. But whatever you do, don't wind up in a situation where each party is indemnifying the other for the very same claim! #contracts #inhousecounsel

Intentionality in who you are in business is a requirement. So, when it comes to setting up my own agreements, I practice what I preach. These are the things I disagree with most often in consulting agreements and the way I address these items in my proposals: **Flat fee for scope, no hourly, no % on costs** My value is not based on how many hours my team spends on a project. My value comes from our experience, relationships, systems, and management tactics. While hourly billing has a time and a place, a flat fee based on scope is the more appropriate structure for most high-value work. Our fee is determined by the cost for my team to do the job, not by a subjective percentage of the project's cost. If we're managing a project, it shouldn't matter whether the tile specified costs $8/SF or $200/SF. The expertise we rely on and the time we spend are the same. Using percentages to benchmark against the market is ok, but at some point, it stops making sense. This has allowed us to be competitive without racing to the bottom. Additionally, I am weary of consultants that add a markup for any material they specify in addition to charging a fee (IDs, I'm looking at you). This is an incredibly poor structure that can leave a project owner on the hook for what could be unlimited consultant fees. **Reimbursables at cost** Making a percentage over reimbursable costs continues the point above. It incentivizes the wrong thing, and it is not always proportionately related to the administrative work required to bill a client for reimbursables. All administrative fees should be contemplated in the fee being charged for the project (even if that is hourly). **No termination fees** If we break up, we break up. That's life. These fees are less common these days but I've seen them as recently as earlier this year. They are most common in construction management or owner's reps proposals. They are usually designed to lower the project owner's upfront fee liability with the assumption that a project will live a full life. We all know that doesn't always happen, and when a project dies, then the owner is on the hook for a future that never happened. I prefer to see a fee adjusted to reflect the work done to date, so both parties can walk away as whole as possible. **Termination for convenience** Projects are sold, they're put on hold, they die halfway, etc. and sometimes, teams can't figure out how to get comfortable working together. Real estate deals are fragile and adding another layer of obligations to a project is the last thing a project needs. As long as reasonable notice is given and fees are settled up to date, termination should not require an agreement. -- I've spent a lot of time thinking about how the terms of my agreements show that I stand behind my work, and I can confidently say that my agreements reflect the values and integrity my team stands for, emphasizing intentionality in how we present ourselves and our work.

So… New Jersey as the governing law is, like, weird, right? When you’re deciding on governing law or venue, the choices usually seem obvious: 🎯 Where one of the parties is located 🎯 Where the services are performed 🎯 Or, you know… Delaware But after 10+ years in the field, you’ve probably seen at least one redline for a jurisdiction where there’s zero contractual nexus and thought: What?? Why?? Let’s figure this out. Here’s a real prompt I use with my enterprise-grade Legal AI tool to uncover the strategic advantages of unusual governing law requests: ----- 🧠The Prompt # Instructions 1. Analyze the attached contract or agreement to identify the governing law clause. 2. Examine the parties to the agreement and determine:    a. Where each party is located or incorporated    b. Where the primary business activities related to the contract will occur    c. Any other jurisdictional connections to the contract 3. Evaluate the [jurisdiction] governing law provision by addressing:    a. The exact language of the governing law clause    b. Whether either party has any connection to [jurisdiction] (location, incorporation, operations, etc.)    c. The nature of the contract and whether it has any [jurisdiction] nexus 4. Analyze potential strategic reasons why the counterparty might prefer [jurisdiction] governing law, including:    a. Favorable legal precedents or statutes for their position    b. Procedural advantages in [jurisdiction] courts    c. Familiarity with [jurisdiction] law    d. Historical practice or template usage    e. Neutral jurisdiction selection 5. Assess the implications for [description of your company] of accepting [jurisdiction] governing law, considering:    a. Potential disadvantages or unfavorable legal standards    b. Litigation costs and convenience factors    c. Enforceability concerns 6. Recommend alternative governing law options that might be more appropriate given the parties' locations and the contract's subject matter. ----- 💡 Sometimes there is a hidden reason (hint: New Jersey + Additional Insured practices 👀). Other times? No advantage at all, which means you’ll just have to ask. 😎 #LegalAI #PromptEngineering #InHouseCounsel