Hiring a Consultant

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When you've finally chosen your consultant, you'll probably be tempted to jump into the work right away. However, your next best step is to draft a contract. Writing a contract may feel like the last thing you want to do after a long selection process. However, neglecting to establish a legal basis for this new consulting relationship can result in everything from an awkward misunderstanding to a drawn-out lawsuit. Once the contract is written, there's one more step you should take before your consultant begins working. If you haven't done so already, take the time to establish clear in-house roles. For example, who will be the project coordinator and what are his or her responsibilities? You may decide to form an advisory committee of board members and others who can lend expertise. Or you may create a steering committee of managers. In any case, it's essential that all relevant parties know their responsibilities and how they will be held accountable.

A well-written contract contains several key elements.

Good contracts address critical aspects of the nonprofit-consultant relationship. The key elements of a solid contract include the following:

  • Background—provides general information about the organization and an overview of the organization’s need for assistance
  • Consultant Duties and Services—describes contract start and end dates, expected tasks and deliverables, and deliverable formats and due dates
  • Client Agreement—outlines what information and systems the consultant will have access to, who the in-house contact person will be, the organizations’ level of effort/commitment, method and schedule of payment, and expense policies
  • Contract Changes—explains the process for altering the contract
  • Contract Termination—explains how the organization-consultant relationship can be ended, if necessary
  • Confidentiality—establishes what type of information should be considered confidential and for what time period
  • Records and Ownership of Property—clarifies who will own rights to specific material produced by the consultant during the course of the project
  • Indemnity and Applicable Law—specifies who will be liable, under what conditions, and for up to what amount, and how indemnification will be handled
  • Independent Contractor—clarifies that the consultant is a contractor and not an employee in order to avoid conflict with IRS policies
  • Non-assignment—ensures that the consultant you hired is the person actually doing the work

More detailed information on each of these contract elements is contained in the document, “Key Contract Elements.” Download this document by clicking on the link.

Click to open interactivity Check your understanding of contract elements.

Check your understanding of contract elements.

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Creating a contract isn't as difficult as it may seem.

Writing a contract may seem like a lot of work, but keep in mind that, when you have access to a good sample contract, much of the document will be written for you. Your work will be to:

  • Add the information specific to your organization, consultant, and project – much of which you have already developed in creating your RFP
  • Decide which clauses are applicable to your specific situation

If possible, have your attorney review the contract before it's signed. A lawyer may be aware of legal issues that specifically relate to your project.

Click to open interactivity This sample contract can help you create your own consultant contract.

This sample contract can help you create your own consultant contract.

Click to download the Sample Contract.

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