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Working as, or hiring, a consultant: what you need to know.

In today’s fast paced commercial world, the way people are choosing to conduct their work is changing.  More people are electing to work as, or engage, consultants (also termed contractors).

If you are a consultant, or thinking of hiring a consultant, here are some things you should know:-

1. Have a Contractual Agreement

Put the terms of your working relationship in writing. The work required from the consultant should be clearly described in the Consultancy Agreement, as well as the time for completion or details of time frames if work is to be staggered.

2. Fees and rates of pay

Negotiate fees and rates of pay upfront, including how much and when the consultant will be paid. It’s useful to be aware of the standard industry rate before entering into negotiations about fees.

3. Expenses

Make sure both parties know upfront who is to be responsible for incidentals, costs and expenses incurred by the consultant in the course of their duties.  This will need to be taken into account by the consultant when negotiating fees and costs, especially if large amounts are required to be expended for special equipment or products in the course of the consultants work.  Specify this in the contract.

4. Confidentiality issues

The nature of consulting means that a consultant does not just work for one firm, but provides services to a variety of different organisations on an outcomes or project basis.

This being so, there is a fair chance that your consultant may end up working for your competitors at some point.  Stipulate the confidential nature of the information that they will be privy to in the course of their engagement.  Make sure you have an appropriately drafted Confidentiality Agreement to clarify these issues or incorporate appropriate confidentiality provisions into your written Contractors Agreement.

5.Due Diligence

When hiring a consultant, it is important to perform your due diligence seriously.  Take the take the time to speak to referrals and satisfy yourself that the consultant is suitably qualified and experienced to undertake the task at hand.  If someone doesn’t seem to “fit” with what you are looking for, keep searching until you feel confident that the skills and experience of the consultant mirrors the needs of your organisation.

6. Protect your intellectual property rights

A consultant may produce certain works (or intellectual property) in the course of their engagement in which are vested intellectual property rights.  For example, plans, software, writing, designs, etc.

It is important to clarify the ownership of any intellectual property created by the consultant in the course of their work.  Will the consultant retain ownership, or will it vest in the hiring business?  Consider whether you need an Intellectual Property Rights Agreement.

You can find more information, professionally drafted Consultants Agreements and other documentation here:-

Consultants Agreement
Incorporated Contractor Services Agreement or Independent Sole Trader Contractors Agreement
Confidentiality Agreements
Assignment of Intellectual Property or Intellectual Property Licence
Employment Contract Pack