Consultancy Agreement Template

A consultancy agreement is a contract between a consultant (or consulting firm) and a client that sets out the terms of the consulting engagement. It covers what services will be provided, how much the consultant will be paid, who owns the work product, and what happens if things go wrong.

Key Elements:

• Scope of services: What you'll do (and importantly, what you won't do)
• Deliverables: Specific outputs, reports, or outcomes you'll provide
• Fees and payment: Rates, invoicing, and payment terms
• Duration: Project timeline or ongoing arrangement
• IP ownership: Who owns the work you create
• Confidentiality: Protecting sensitive information
• Liability: Limits on your exposure to claims
• Termination: How either party can end the arrangement

A proper consultancy agreement protects both you and your client with clear, enforceable terms.

Without a Written Consultancy Agreement:

• Scope creep: Clients expect more work without additional payment — "I thought that was included"
• Payment disputes: No clear terms on when, how, and how much you get paid
• IP ownership conflicts: Who owns your methodology? Who owns the deliverables? Disputes arise
• Unlimited liability: Without caps, you could be liable for consequential damages far exceeding your fee
• Employment misclassification: HMRC may reclassify you as an employee, triggering back taxes and penalties
• Difficult termination: Either party may be trapped in an arrangement they want to exit
• Confidentiality breaches: No recourse if client shares your proprietary information

Written agreements with clear terms help avoid these costly problems.

Comprehensive Consultancy Coverage:

• ✓ Parties — consultant and client identification
• ✓ Scope of services — detailed description of what's included
• ✓ Deliverables — specific outputs and acceptance criteria
• ✓ Fees — day rates, hourly rates, fixed fees, or retainer
• ✓ Expenses — what's reimbursable and approval process
• ✓ Invoicing — frequency, format, and payment terms
• ✓ Late payment — interest and collection rights
• ✓ Duration — project period or ongoing arrangement
• ✓ IP ownership — work product and pre-existing IP
• ✓ Confidentiality — mutual protection of sensitive information
• ✓ Data protection — GDPR compliance provisions
• ✓ Liability cap — reasonable limits on exposure
• ✓ Insurance — PI insurance requirements
• ✓ Termination — notice periods and immediate termination grounds
• ✓ Post-termination — handover and continuing obligations

Related documents: Consultants typically also need NDA, Service Agreement, and Invoice Terms.

Don't Make These Critical Errors:

• Vague scope: "Provide marketing advice" is too broad — specify exact deliverables, meetings, and outputs
• No change control: Without a process for scope changes, you'll do extra work for free
• Missing payment terms: "Payment on completion" doesn't specify what completion means or when payment is due
• No liability cap: Without limits, you could be liable for millions — far exceeding your fee
• Forgetting IP: Assuming the client owns everything or you own everything — specify clearly
• Employee-style terms: Control over hours, location, and methods may create employment relationship with tax consequences
• One-sided termination: Client can terminate instantly but you need 90 days notice — balance the terms
• Missing insurance clause: Clients increasingly require PI insurance — include requirements and proof

Our template addresses all these issues with comprehensive, balanced provisions.