Consultancy and Professional Services Agreements

Introduction

Organisations rely on consultants, advisers, designers, engineers, auditors and other professionals for expertise they do not have in-house. Professional services contracts are different from contracts for goods or works: the output is often advice or design, quality is harder to define, and the professional's duty of care, independence and liability are central concerns.

This Consultancy and Professional Services Agreements training course explains how to procure, draft and manage contracts for professional services. Participants learn how to define scope and deliverables, choose fee structures, set the standard of care, manage key personnel and conflicts of interest, allocate intellectual property, limit liability, require professional indemnity insurance and manage performance and change.

The course is relevant to both clients appointing consultants and firms providing professional services.

Course Objectives

By the end of this training course, participants will be able to:

• Explain the distinctive features of professional services contracts
• Define scope, deliverables and assumptions clearly
• Select appropriate fee structures and payment terms
• Understand the standard of care and fitness for purpose
• Manage key personnel, independence and conflicts of interest
• Allocate intellectual property and confidentiality obligations
• Address liability limits and professional indemnity insurance
• Manage consultant performance, change and termination

Target Audience

This training course is suitable for a wide range of professionals, including:

• Procurement and contract managers
• Clients appointing consultants and advisers
• Consultancy and professional services firm managers
• Project managers
• In-house legal advisers
• Public sector commissioning officers

Training Methodology

The course uses sample appointment documents, scope definitions and case studies. Participants draft scope and deliverable descriptions, compare fee models, review liability and insurance provisions and manage simulated performance issues with a consultant, considering both client and consultant viewpoints.

Target Competencies

• Scope definition
• Fee structure selection
• Standard of care understanding
• Liability and insurance review
• Consultant performance management
• Change and variation control

Day One: Professional Services Contracting

• Types of professional and consultancy services
• How professional services differ from goods and works
• Standard forms of appointment in overview
• Procurement of consultants and selection criteria
• Common problems in professional services contracts
• Client and consultant expectations
• Exercise: reviewing a sample consultancy appointment

Day Two: Scope, Deliverables and Fees

• Defining scope, objectives and deliverables
• Stating assumptions, exclusions and client inputs
• Lump sum, time charge and percentage fees
• Milestone payments and success-based fees
• Expenses, disbursements and rate escalation
• Avoiding scope creep and fee disputes
• Workshop: drafting scope and deliverables

Day Three: Standard of Care and Key Obligations

• Reasonable skill and care compared with fitness for purpose
• Key personnel and replacement provisions
• Independence and conflicts of interest
• Confidentiality and data protection
• Intellectual property in reports and designs
• Reliance and third-party rights
• Exercise: analysing standard of care clauses

Day Four: Liability and Insurance

• Limitation of liability for professional advice
• Net contribution and proportionate liability clauses
• Professional indemnity insurance requirements
• Duration of liability and limitation periods
• Collateral warranties and assignment of rights
• Negotiating liability provisions with consultants
• Workshop: reviewing liability and insurance terms

Day Five: Managing Consultants

• Mobilisation and kick-off with consultants
• Monitoring progress, quality and deliverables
• Managing changes to scope and fees
• Handling poor performance and disputes
• Suspension, termination and handover of work
• Evaluating consultant performance at the end
• Personal action plan for professional services contracts