CONSULTANCY AGREEMENT BETWEEN KEY EMPLOYEE & CLIENT

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What is included

Between Consultant – Key Employee – Client

Consultancy Agreement  where the client’s details and variables in the contract are contained in a schedule, making it a handy form for use in the field.  The Consultancy Agreement is couched as an offer, accepted by the client providing further instructions or asking the consultant to perform work.

The Schedule allows the consultant to specify work done by hourly rate or fixed fee, and to define the scope of the retainer.

This Consultancy Agreement  includes:-

  • Acceptance of offer
  • Interpretation
  • Engagement of the consultant
  • Term
  • Consultant to employ key employee
  • Remuneration to be paid to the consultant
  • Billing arrangements
  • Interest on unpaid costs
  • Out of pocket expenses
  • Expenses & disbursements
  • Restrictive covenant
  • Confidentiality
  • Termination
  • Retention of documents
  • Disclaimer
  • Governing law.

 

 

11 pages long.

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BETWEEN KEY EMPLOYEE & CLIENT
What is it?

A consultancy agreement between a key employee and a client is a contract that formalizes the relationship between a client and a key employee of a company who provides consulting services. This type of agreement is typically used when a key employee of a company is engaged directly by a client to offer their expertise on a specific project or for a specific period. This arrangement can happen with the consent of the employer or as a separate engagement if the employee is acting as an independent consultant outside their employment.

### Key Elements of a Consultancy Agreement Between a Key Employee and a Client

1. **Parties Involved**:
– Identification of the client and the key employee providing the consulting services, including their contact information.

2. **Scope of Services**:
– Detailed description of the consulting services to be provided by the key employee, including project objectives, tasks, deliverables, and timelines.

3. **Fee Structure**:
– Breakdown of fees, including hourly rates, project fees, or retainer arrangements, and any additional costs (e.g., travel expenses, materials).

4. **Payment Terms**:
– Methods of payment, payment schedules, due dates, and policies regarding late payments or additional expenses.

5. **Confidentiality**:
– Provisions to protect the confidentiality of information shared during the consultancy, including any proprietary or sensitive data.

6. **Intellectual Property**:
– Clauses addressing the ownership and rights to any intellectual property created during the consultancy, ensuring clarity on who retains these rights.

7. **Duration and Termination**:
– The term of the agreement, including start and end dates, and the conditions under which the agreement can be terminated by either party, including notice periods and any associated fees or penalties.

8. **Non-Compete and Non-Solicitation**:
– Clauses that may prevent the key employee from competing with the client or soliciting the client’s employees or customers for a specified period after the agreement ends.

9. **Liability and Indemnity**:
– Clauses limiting the key employee’s liability and indemnifying the key employee against certain claims.

10. **Dispute Resolution**:
– Mechanisms for resolving disputes, such as mediation or arbitration, and the governing law and jurisdiction.

What are the benefits?

 

### Benefits of a Consultancy Agreement Between a Key Employee and a Client

1. **Clear Expectations**:
– **Defined Roles**: Clearly outlines the scope of services and expectations, ensuring both the key employee and the client understand their responsibilities.
– **Deliverables**: Specifies deliverables and timelines, providing a clear framework for the consulting engagement.

2. **Professionalism and Credibility**:
– **Formalisation**: Establishes a formal relationship, enhancing the professional standing of the key employee and the perceived value of their services.
– **Accountability**: Holds the key employee accountable for delivering the agreed-upon services, ensuring consistent quality.

3. **Confidentiality and IP Protection**:
– **Safeguards**: Protects sensitive information and intellectual property through confidentiality and IP clauses, fostering a trusting environment.

4. **Legal Protection**:
– **Binding Contract**: Serves as a legally binding document that protects the interests of both parties in case of disputes.
– **Risk Management**: Includes clauses that limit liability and manage risks associated with the consulting engagement.

5. **Financial Security**:
– **Payment Terms**: Clearly defined payment terms ensure timely compensation for the key employee’s services.

6. **Flexibility**:
– **Customizable Terms**: Allows for the customization of services to meet the specific needs of the client, which can be clearly outlined in the agreement.
– **Adaptability**: Can be adjusted to reflect changes in the consulting relationship, such as extending the duration or modifying the scope of services.

### Considerations and Challenges

1. **Conflict of Interest**:
– **Employer Consent**: If the key employee is still employed, it’s crucial to have the employer’s consent to avoid conflicts of interest or breaches of employment contracts.
– **Alignment of Interests**: Ensuring that the interests of the key employee, client, and employer (if applicable) are aligned.

2. **Non-Compete and Non-Solicitation Clauses**:
– **Restrictions**: These clauses need to be carefully crafted to protect the interests of the client without unduly restricting the key employee’s future opportunities.

3. **Legal and Tax Implications**:
– **Compliance**: Ensuring the agreement complies with relevant legal and tax regulations to avoid potential liabilities.

### Example Scenario

A key employee in a technology company, who specializes in cybersecurity, is approached by a client to provide consulting services on a new security protocol implementation. The employee’s company agrees to the arrangement, allowing the employee to engage with the client directly. A consultancy agreement is drafted, specifying the services to be provided, the fee structure (e.g., $200 per hour), confidentiality clauses, IP rights, and the duration of the project (three months). The agreement includes a non-compete clause preventing the employee from providing similar services to the client’s direct competitors for six months after the project ends.

### Conclusion

A consultancy agreement between a key employee and a client formalizes the consulting relationship, ensuring clarity, professionalism, and legal protection. By clearly defining the terms of engagement, such agreements help both the key employee and the client align their expectations, facilitating a productive and positive consulting experience. This arrangement can be particularly beneficial when handled with the consent of the key employee’s employer, ensuring all parties benefit from the engagement.

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