If you are enrolling prospects to become clients, the ultimate step is a signed agreement and ... [+]
If you are enrolling prospects to become high-paying clients, the ultimate step is a signed agreement and collecting your first payment.
My definition of high-paying clients is this: those who pay you five and six figures for your services. But the following agreement opinions apply to lower value deals, too.
An agreement document—avoid the word contract—should be created to be signed by the client. I am not an attorney, and do not provide legal advice in this column. But I do read legal textbooks on the subject, hire attorneys to help create these documents, and interview many attorneys for this column. (If you think my attorneys make me include that disclaimer, you would be correct.)
With the disclaimer out of the way, let us examine some agreement document items in the spirit of business development education. Here is a checklist of deal point items to consider in your agreements with high-paying clients:
Time Period Of The Agreement. What time period is covered? There should be a start and end date. If it is an annual retainer, have the courage to get a new agreement signed every year.
The Parties To The Agreement. What are the official names and addresses of the professional providing the service and the client? What are the legal names of the entities, not just the DBAs (doing business as)?
The Financial Consideration Of The Agreement. Recap of fees and hourly rates, how expenses are managed, and payment options (check, credit card, PayPal, Square, or other means).
Scope Of The Agreement. This is the recap of what you will do and what is out of scope. There must be a meeting of the minds. You do not want any misunderstandings about the client’s expectations.
Definition of Confidential Information. “Confidential Information” shall include all information, written or oral, disclosed or made available directly or indirectly, through any means of communication or observation.
Confidentiality Obligations. Terms regarding holding specific information in confidence.
Non-Use Of Confidential Information. Terms regarding the way confidential information is to be used or not used.
Force Majeure. Obligations shall be extended by a period equal to a force majeure (forces beyond the control of the professional that prevent the professional from meeting the obligations). Typically, these might be war or “acts of God” such as tornados and earthquakes, but now might include pandemics.
Governing Law. Consider asking for the right to do whatever it takes to make the client satisfied. If the client is not liking your service, ask them to inform you so you can have candid conversations about making them happy. Regardless of where the client lives, this agreement should be governed by the laws of your state (you do not want to have to defend yourself out of state because of the costs of time lost and travel expense). Consider a clause like this: If any dispute shall arise regarding this agreement, the client and professional shall try to resolve such dispute through collaboration, then through mediation, and, if that fails, binding private arbitration.
Signatures. This does not necessarily have to be managed the old-fashioned way with quill pen to parchment. There are evolving ways to make it easy on the prospect with email.
Bottom line: the deal is not done until you have a meeting of the minds and money changes hands. Hope for a happy marriage but have language in the agreement if it comes to a divorce. If expert assistance is required, the services of appropriate attorneys should be sought.
