Key Clauses To Look For In Consulting Contracts

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.

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.

Consultants don’t typically lose money on the work they agreed to. They lose money on the work they never agreed to. That’s why assumptions in your Statement of Work are just as important as the scope itself. Here’s what I mean: A client drags their feet giving you system access → your timeline slips, but suddenly you’re “late.” Stakeholders ghost feedback for weeks → you’re stuck waiting, unpaid. You budget time for analysis, but they expect implementation → scope creep eats your margin. These things do happen. That’s why I build assumptions into every proposal. Real ones. Things like: Feedback comes back within 3 business days. I use my own equipment unless the client requires theirs for security purposes, then its at their cost. Work is remote unless they request travel, which is billed separately. Hours cap each month. When I hit 95%, I flag it so the client can reprioritize or approve more time. Deliverables are theirs once invoiced and paid. None of this is “fine print.” These are the ground rules that keep projects on track and protect your sanity. Consulting isn’t just about solving problems. It’s about making the conditions for success explicit before you start. I’m Melissa, I help businesses cut costs, reduce risk, and build procurement and contracts that actually work in the real world. What’s the one assumption you wish you’d written into a proposal that wasn't clear when you signed a contract? #Consulting #Contracts #BusinessEfficiency #RiskManagement #ScopeCreep