A consulting agreement is a document between you and your client that formalizes the project you’ve outlined in your consulting proposal.
The agreement commits both you and your client to the project: the responsibilities, deliverables, payment schedule, and more.
Consulting agreements and consulting contracts are the same thing. They are interchangeable: use whichever language you prefer.
By the end of this post, you’ll learn everything you need to know about the consulting agreement: their different forms, what to include in them, templates & examples, and best practices for closing out a consulting contract so you can get paid on time and in full.
(NOTE: This article is for informational purposes. It is not legal advice. Consult with an attorney before drafting and sending your consulting agreement/contract.)
A well-prepared consulting agreement communicates confidence, expertise, clearly sets expectations, and shows the client how the engagement will lead to a clear ROI for them.
A consulting agreement is a document that formalizes the project you’ve outlined in your consulting proposal.
Once both you and your client sign the document, the project is on.
In that sense, a consulting agreement can come in many forms, as listed below.
A consulting agreement is a legally-binding document that formalizes an engagement with your client. It binds both parties to the engagement, fees, delivery schedule, etc.
A consulting proposal is a document that formalizes the engagement you and the buyer have discussed verbally. This time on paper confirm you’re both on the same page. This is also when you will detail what outcome you’ve agreed on with the buyer, how you’ll measure the success of the project, and pricing options.
For many consultants, their proposal also serves as their consulting agreement or contract. We’ve worked with hundreds of consultants in our coaching program that have landed 5 and 6-figure deals using this approach.
A statement of work is a legally-binding agreement between a client and a vendor which describes every step of the project you’re delivering. It outlines who does what, and by when.
A master of service agreement is a type of contract between a client and a vendor where they agree upon the terms for future agreements. Its purpose is to settle details and expectations for both parties during a consulting project.
(Note: Which form you use is highly dependent on your industry, expertise, type of work, and relationship with your client)
No matter which format you choose, remember this: your contract is more than just a piece of paper. It’s an opportunity to demonstrate and confirm value.
A well-prepared consulting agreement communicates confidence, expertise, clearly sets expectations, and shows the client how the engagement will lead to a clear ROI for them.
Since many consultants use their consulting proposal as their consulting agreement, you might be wondering…
“What’s the difference between a consulting proposal and a consulting agreement?”
“Why would you decide to split the two?”
This depends on your consulting business.
Even in my first consulting business, I generated hundreds of thousands of dollars working with large organizations, and the proposal that I sent served as the agreement.
Because my consulting proposals.
I used the same consulting proposal template that we share in our Clarity Coaching Program — one that has been used by thousands of consultants to generate hundreds of millions of dollars in new business.
Try and use your consulting proposal to serve as your consulting agreement. This shortens the sales cycle and gets the project moving forward much more quickly.
However, depending on you or your client’s business, you might not be able to combine your proposal and agreement.
Here are several reasons why you might separate your consulting agreement and consulting proposal into separate documents:
Ultimately, this is something you can ask your client about:
“I will provide you with a proposal that will outline the details we’ve discussed along with some options for how we can best work to achieve this outcome.”
Then review that proposal with the buyer and include an area for them to sign. If they push back and ask for a longer or more ‘standard’ agreement you can let them know that you prefer to keep things simple so you can start the engagement with them sooner. Often that will be enough for them to say “Okay, that’s fine.”
While it’s desirable to combine your consulting agreement and proposal. But if that’s not possible for your business, you’ll need to create your consulting agreement.
Keep your consulting agreement as short as possible. Only include the key details necessary in order to move the project forward.
Every consulting agreement should be custom to the project and your client. The only time this is not the case is when you are providing a productized service or program.
Many of the things you’ll include in your consulting agreement will be found in your consulting proposal.
However, in your consulting agreement, you’ll include more details about the project.
In general, here’s what you should be including in your consulting agreements:
Keep your consulting agreement as short as possible. Only include the key details necessary in order to move the project forward.
The longer and more complex your agreement is, the higher chance your client will want to get lawyers or their legal team involved.
Lawyers might be necessary for certain types of consulting projects, but they will slow down the sales process and often delay an intended start date between the back and forth that often occurs.
Next, I’ll show you a few templates and examples that you can use as a starting point for your consulting agreement.
Here are a few different consulting agreement templates we’ve sourced from around the web that serve as good starting points.
Are you thinking of using your consulting proposal as your consulting agreement? If so, use our consulting proposal template. It’s been used by thousands of consultants to close millions of dollars in new business from clients like Nike, Google, Boeing, MLB, PWC, and many more.
We recommend that you get on a call with the buyer to review the proposal together. In one of our consulting studies, we found that 39% of consultants deliver their proposals this way —and it typically leads to a higher win rate.
This consulting agreement template from Eforms is a good, minimal template for your consulting contracts. It’s a great starting point if you need something in addition to your consulting proposal.
This statement of work template from Zapier is excellent for outlining the tasks that you’ll do (and just as importantly, won’t do) to protect you from scope creep. It will put you and your client on the same page when it comes to the project’s deliverables.
This Master Service Agreement from NitroPDF lays out the expectations for both you and your client for your engagement. It has plenty of room for you to customize it to make it work for your unique consulting projects.
Depending on your industry and level of risk and liability exposure, you may need to hire an attorney to prepare a consulting agreement template. That way, your consulting agreements are tailored to your specific business and ensure your business is protected. The peace of mind and legal protection will be worth the few hundred dollars you invest.
Even in my first consulting business, I generated hundreds of thousands of dollars working with large organizations, and the proposal that I sent served as the agreement.
Take these templates, tweak them, and make them work for your unique consulting business.
So you’ve finished your work for the client. How do you actually close out the contract and ensure you get paid?
First, schedule a time to meet with your client.
At this meeting, review the work that you’ve been doing. For example, that could mean:
Think “past, present, future:” where they started, what you’re doing now, and the results you can create for them in the future.
Show your client that you’ve completed the work at specific dates as stated in your consulting proposal/agreement. By doing this, you’re formally closing out the engagement.
However, if there is more value that you can create for your client, now is the time to talk about that value.
The best source of new business is existing clients. And the best time to ask them for new business — whether a continued project or a referral — is right when you’ve completed a successful engagement.
In most cases, that engagement was to accomplish specific things. But likely, you’ve identified more areas where you can create value.
Make it clear that you’ve delivered what you said you would deliver to close the engagement. Then, help them see the future opportunities if they were to continue working with you (if that’s the case).
This is also where you ask your client for a referral and a testimonial, both of which will help you secure more consulting work.
The best source of new business is existing clients. And the best time to ask them for new business — whether a continued project or a referral — is right when you’ve completed a successful engagement.
Your consulting agreements and contracts not only make the consulting process easier — they ensure you get paid on time.
They’re also the perfect opportunity to strengthen your relationship with your clients.
There’s no “one-size-fits-all” agreement that works for every type of consultant on every type of project. You’ll need to create one (or work with an attorney to create one) that works for your unique consulting business model, consulting offers, fee structure, etc.
If you’d like our help creating bulletproof consulting proposals that help you win consulting projects at the highest rate and ensure you don’t leave money on the table, and develop strong relationships with your clients, our customized Clarity Coaching Program is for you.
We’ll work hands-on with you to develop a strategic plan and then dive deep and work through your ideal client clarity, strategic messaging, consulting offers, fees and pricing, business model optimization, and help you to set up your marketing engine and lead generation system to consistently attract ideal clients.
