Establishing professional services contracts
There are many issues to consider for professional services firms when establishing professional services contracts.
Firms must take care to ensure that their contracts (among other things):
- clearly set out the scope of work to be undertaken;
- include provision for variations to the scope of work (where appropriate) and adequate clauses for fee variations as a result of that work;
- clearly set out rules for engagement of third parties and reimbursement for expenses;
- contain appropriate clauses for payment of professional fees and “stop work” clauses for events of non-payment;
- have appropriate timeframes for completion of work and include suspension or extension clauses where appropriate;
- ensure the safety of employees of the firm for any on-site work;
- include obligations on the client to deliver correct information and instructions and contain limitations of liability if instructions or information provided is incorrect;
- provide the firm the ability to terminate if the client is behaving inappropriately or if the relationship between the parties breaks down irreconcilably;
- do not require the firm to indemnify the client for anything more than their insurance coverage and contains appropriate limitations of liability; and
- are compliant with any legislative or professional body requirements as to minimum terms or disclosures to clients.
By ensuring that these items are all properly addressed, professional firms can ensure that they properly protect themselves from risk and give themselves the best possible opportunity to ensure that they are paid properly for their work.
Hillhouse Burrough McKeown has extensive experience in establishing professional services contracts and can advise clients on all aspects of these matters.