5 Lessons I Learned About Contracts as an Education Consultant
I launched my consulting business in October of 2017 and since then, I've had a beautiful, beautiful experience of being able to work with hundreds of school leaders across the country.
I started my consulting business with no blueprint. I didn't go through a business accelerator program and I didn't have this fancy business plan. I literally started out of a season of transition and knew I wanted to make money and have a big impact.
Since launching my consulting business, I have served over 50 clients and I have learned a lot of things about contracts. When you are first starting your consulting business, contracts can feel super scary, like you are signing your life away. Since I launched my consulting business, I have signed a lot of contracts and learned a lot of lessons. Contracts don’t have to be scary. With the right knowledge, they can be a tool to protect you and your business.
I want to share five lessons I have learned about education consulting contracts. I want to name upfront that I am not a lawyer and this is not official legal advice. This is simply me just sharing my experience of the lessons that I’ve learned in hopes that you might find them meaningful and can apply these lessons in your own consulting journey. These are also 5 lessons but not the only lessons worth noting.
Let me first share two pieces of background knowledge. The first is a little bit about how the contract process could potentially work. Once you get to the point where you and your potential client have made a decision to engage in a formal partnership together, then it's time for a contract. You should always have a contract. Even if it's a close friend or work bestie. No matter how deeply you know the person, you should always have your agreements in writing. That way, both of you are on the same page and have a neutral source of answers in case there are questions that come up during the course of the consulting engagement.
The second piece of background knowledge is the two types of business models you could have within your consulting business. The first is called B2B which stands for “business to business”. Within a B2B model, you have a business and you are engaging in a contract with another business. So for example, if you have a contract with a school or a school district, then that would be a B2B. Even if you are coaching teachers, if the contract is with the school and not the teachers, that's considered B2B. In a B2B model, there's two contract possibilities, 1.) the organization could provide you with a contract or 2.) you could provide the contract to the business.
The second business model is B2C or “business to consumer”. B2C is when your contract is directly with the individual you are serving, meaning the teacher, principal, or whomever is your target client. The target client is entering directly into a contract with you. In a B2C model, you must provide the contract or terms of services.
In both B2B and B2C scenarios, you could be in the position of having to provide the contract, but in the B2B model, the organization could be providing a contract. Consequently, one of the questions that will need to be answered when developing a B2B relationship is who will be providing the contract. You might have a preference of wanting to provide your own contract, and that's totally within your right.
Regardless if the organization is providing the contract or you are providing your own, you need to know what the contract says.
The best way to be clear on the terms outlined in a contract is to leverage an attorney for a contract review….and lawyers do cost money. For a $1,000 contract, it may not be cost effective to hire a lawyer to review your contract as the cost of their services could cost close to the entirety of the contract. As an education consultant, whether you leverage an attorney to review your contracts or not, you always want to know what your contracts say and what to look for within your contracts to ensure you are protected.
Here are five aspects of contracts I have learned to pay particular attention to:
Lesson #1 - The Contract End Date
Your contract should name the date that the contract goes into effect. It will also name the contract end date. For example, if your service is 1-on-1 coaching, your contract end date means that the agreement will no longer be valid after the end date. So let's say you have a coaching client and it is a six-month coaching relationship. You make the end date exactly six months from the contract start date. You want to be aware if your policy allows your client to rollover one coaching session to the next month in the event that the final month comes and they decide to roll over a coaching session. If your contract start and end dates were extremely tight and exactly six months, that means that your contract will no longer be in effect with that rollover session if it's after the end date listed within your contract.
For this reason, there are instances when you may want to give yourself a little wiggle room and set a contract end date of 15 to 30 days after you anticipate the engagement ends. If for one reason or another life happens, you have the flexibility to move a session or rollover something and the contract is still in effect.
Lesson #2 - Maintaining Intellectual Property
This lesson is particularly important in B2B relationships. Typically B2B organizations use some sort of independent contractor agreement. This means the organization is bringing you on as an independent contractor, and not an employee, to complete services. Many times in independent contractor agreements, particularly ones that are provided by an organization, there is default contract language that the organization maintains intellectual property rights for anything that you develop. So for example, if the organization has hired you to deliver a professional development session for a school and the organization maintains intellectual property rights, that means that whatever you create for that engagement, they own the rights to. This means they could take that professional development session and they could use it within their own organization. They could also have the rights to take your session and sell it because they own the intellectual property rights.
You always have the right to negotiate changing the language of an organization’s contract such that you maintain your intellectual property rights. I have done it a number of times and each time it was never a big deal.
You could have a consulting engagement in which you are creating tools and resources that an organization will use in their org-wide programming and they may wish to maintain the intellectual property, you just want to be aware of this in advance.
Lesson #3 - Payment schedule and terms.
A payment schedule is essentially when you anticipate payment. As a consultant, you determine the rules in your business. You determine how much you should be paid and when.
Is your client paying you all upfront or do they pay a deposit?
Or are they paying you on a monthly basis?
Or are they paying you for the services rendered for the past month?
Do you allow refunds and if so, under what circumstances?
You have to be really, really clear on your payment schedule and payment terms and include this in your contract.
There are some school districts and organizations that don't allow for consultants or vendors to bill in advance of services, services have to be rendered in order for them to process an invoice. This is one of the questions you want to ask your client in advance. You always have the right to ask questions.
In the contract, rather than just saying the total contract was for $5,000, be sure to include the payment schedule of when the client will be billed and when payment will be due. Your contract should also outline any fees for late payments.
The headline here is if there is ever a question about payment you should be able to point back to the contract.
Lesson #4 - Late/Tardy Policy
This lesson is most applicable to 1-on-1 coaching. If someone is actually late to the coaching session, what happens? If the coaching session is an hour-long conversation and someone is late, how long do you wait? Do you give them a 5-minute grace period? 10 minutes? 15 minutes?
If they have to reschedule, how far in advance must they give you notice in order for you to approve the reschedule? If they are a no show, what happens? At what point do they forfeit the coaching session versus having the opportunity to reschedule?
You want to be really clear about your late and no-show policy and this should be included in the contract/coaching agreement. There should be no questions about expectations, no questions about how you will operate together in the coaching relationship.
Whatever you have identified as your policies, you must hold your clients accountable to them. So if you say your policy is that your client can't reschedule coaching sessions within a 48-hour window, then you don't reschedule when you receive a request to reschedule with 24 hours notice. You can always point back to the contract that they signed in advance as acknowledgment of that policy.
Lesson #5 - Process for terminating an agreement.
The pandemic caused a lot of consultants to realize the impact of a termination policy when in-person engagements were now canceled. Consultants who had not thought about their termination policy found themselves in a position of losing income their business was depending on.
Your contract should always clearly state your termination policy. How far in advance must they provide notice of canceling the contract? Is there a portion of the payment that will still be due if the contract is canceled?
For consultant engagements that are billed monthly, I have seen cancellation policies that require 30 days’ notice in order to terminate the contract and the client will still be billed for the following month but the remaining payments will be voided.
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