Consulting contract preparation and negotiation skills

¶ … Contracting

An effective consulting contract is one that clearly stipulates the scope and deliverables of the project. Both the client and the consultant must have a detailed understanding of each element of the contract (Block, 2011). This paper identifies the steps and processes involves in preparing a consulting contract as well as managing contract negotiations. Attention is specifically paid to necessary contracting skills, the importance of the different sections of a contract, the different approaches to drawing up a contract, the appropriate setting for holding the contracting meeting, and important factors to anticipate during the negotiation process.

Necessary Contracting Skills

The first step in the consulting cycle is to negotiate and enter into a contractual agreement with the client. For the consultant to win the contract, however, they must possess and demonstrate certain skills, capabilities, and competencies. First, it is important for the consultant to exhibit a deep understanding of the service they purport to sell (Gray, 2004). This is important for convincing the client that the consultant has the necessary expertise and experience to solve the problem at hand. The consultant must also have strong sales skills (Biggs, 2010). They must possess a thorough understanding of the client's problem. They must also show how they can solve the problem and why their service is the best compared to others in the market. Outstanding problem solving ability can be beneficial to negotiating the contract as the client gets the assurance that the right consultant is addressing their problem. Finally, successful contracting requires excellent people skills (Biggs, 2010). Consultants interact with clients almost daily when addressing the client's problem. Accordingly, the client must be convinced that the client is able to interact professionally and communicate effectively.

Approaches to Drawing up a Contract

There are different approaches that can be used to draw up a consulting contract. Generally, a contract may be written or unwritten. In some instances, the client and the consultant may enter into consulting relationship without a written agreement. Whereas this often minimizes the formal aspects of contracting process, it may be disastrous. A written agreement is always the best option (Gray, 2004). The agreement explicitly defines the project's scope deliverables as well as the expectations of both parties. This is crucial for keeping each party committed to the agreement. In the event of an unfulfilled expectation, either of the parties can easily take legal action on the other. More importantly, a written agreement ensures the relationship between the client and the consultant remains strictly professional.

Appropriate Setting for Contracting Meeting

The process of contracting starts with a meeting between the client and the consultant. For the client, this meeting is important for evaluating the consultant's ability to solve their problem as well as specifying expectations. For the consultant, the meeting is important for showing the client what they can do to solve the problem. There are various venues in which the meeting may be held, including the client's premises, the consultant's premises, or a neutral premise such as a hotel boardroom. Arguably, the client's premises provide the most ideal venue for the contracting meeting. The consultant should be willing to go to meet the client. This often demonstrates the consultant's interest in assisting the client.

Important Factors in Contract Negotiation

Negotiating a consulting contract may not be as easy it may seem. There a number of important factors the consultant must anticipate as far as the negotiation process is concerned. One of these factors is the consulting rate (Biggs, 2010). One may not be sure whether to charge their service on a fixed or hourly basis. The client may prefer the fixed approach, while the consultant may be inclined to the hourly approach, or vice versa. This would likely be an important aspect during the negotiation process. Even if the consultant is certain about the charging approach, they may not be sure about the amount. Consultants often want to avoid appearing cheap or exploitative. Other factors that may be important during the negotiation process include who to staff or manage the project and their qualifications, whether subcontractors will be involved or not, and who to pay for logistics such as travel. The client may want answers to these questions.

An important aspect of the negotiation process also entails setting ground rules (Block, 2011). This is important for ensuring successful outcomes. The ground rules may relate to aspects such as promises, responsibility, mutual consideration, and contract re-negotiability. For instance, the consultant may set a rule to offer only what they have or to allow re-negotiation of the contract in the future if necessary. Setting ground rules is important for guaranteeing the expected outcomes.