Retainer agreements for consultants: What to know
Consultants can be an asset to any business, providing expert advice and customized solutions to meet specific needs. But how do you ensure that your consultant is committed to your company long-term? A retainer agreement can help.
What is a retainer agreement?
A retainer agreement is a contract between a consultant and a client that outlines the terms of their working relationship. In essence, it’s a commitment by the consultant to provide ongoing services for a set period of time, usually one year.
Why use a retainer agreement?
There are a few key benefits to using a retainer agreement:
1. Consistency: With a retainer agreement, you can ensure that your consultant will be available to work on your projects throughout the year, which can provide consistency and stability for your business.
2. Predictability: A retainer agreement can also provide predictability in terms of cost, as you’ll typically agree on a set fee for the year instead of paying hourly rates or project fees.
3. Priority access: Retainer agreements often come with priority access to the consultant, meaning they will prioritize your projects over any ad-hoc work that comes their way.
What should a retainer agreement include?
When setting up a retainer agreement, it’s important to include the following:
1. Scope of work: Clearly outline what services the consultant will provide and what is excluded from the agreement. This should be as specific as possible to avoid any confusion or misunderstandings.
2. Payment terms: Discuss how much the consultant will be paid, when they will get paid, and any payment schedule or structure.
3. Duration: Agree on how long the retainer agreement will last and any renewal options.
4. Termination clause: Include a clause that outlines how either party can terminate the agreement early and what the consequences will be.
5. Confidentiality: Make sure there is a confidentiality agreement in place to protect sensitive information and trade secrets.
6. Deliverables: Specify what deliverables the consultant will provide, and when they will be expected to deliver them.
7. Communication: Agree on how often you will communicate with one another and how progress updates will be provided.
In conclusion, a retainer agreement can be an effective way to ensure a long-term commitment from a consultant while providing predictability, consistency, and priority access. When setting one up, be sure to include the key elements outlined above to protect both your business and the consultant.