Consultants are service providers with special legal needs. You need a five- legged chair to support your legal needs. If you have a consulting firm, you must use several methods to protect yourself from unnecessary liability.
The business consultant is subject to unlimited liability in the event the consultant is negligent in providing services. Choosing the proper form of incorporation will prevent your customers and creditors from seeking to be paid from your personal assets such as your investments and house if the business is insolvent.
Unless you limit your liability in your contracts with your customer (e.g. the amount of revenues paid by the customer in one year), then you could be liable for unlimited damages. See below for the list of key contract issues.
Your IP is the lifeblood of your business. You must be contractually free to use everything you have learned before your next engagement and everything you learned at this next engagement- and so on. Your contract must clearly articulate this right of reuse.
Be sure to acquire E + O (Errors and Omissions) insurance with limits of at least $1MM.
Create good systems and procedures to provide an excellent work product to your customer. Learn to recognize red flags of customer dissatisfaction which can later lead to costly collection disputes.
Top Contract Issues for Service Providers
- Damages Limited
- No consequential damages
- IP ownership- you must be able to re-use your IP
- Good recitation of scope of services (SOW)
- Warranty Limited by Time or Scope
- Indemnities from Customer
- Remedies (such as re-performance) Limited
You must include these issues in your contract or you will face severe financial risk if your customer claims you failed to submit adequate work (this would be called negligent work or malpractice, it is the concept same as a doctor or lawyer).
I met Charlie Brown as a fellow member of the board of a charitable giving organization. His energy and commitment and organizational leadership impressed me initially as he took charge of our annual fund raising efforts and eventually chaired the board. I first engaged CorpLaw Associates professionally on a matter involving my partnership in a technology consulting firm. Most recently, CorpLaw Associates worked with me to help one of my professional services clients form a limited liability company. Charlie’s services included helping us to determine the structure, funding, and operation of the LLC; drafting the operating agreement; filing the certificate of formation; and advising, from a legal point of view, on a variety of issues we faced. Charlie not only had a very good grasp of best practice in these areas, he was very patient and a good teacher when it came to explaining the legal and business reasons behind his recommendations. Formation of the LLC required building consensus among several US offices of this client and ultimately the approval of its global board of directors and that would not have been possible without Charlie’s help.
Tom C., Organizer, Executive Recruiting Industry
I have my own consulting business and have been using CorpLaw for my legal services for several years. Charlie is uniquely qualified to advise consultants, having been the GC at a major consulting firm, and his approach is very practical for the small firm. He takes the time to understand my unique business needs, so I feel like I’m getting a real advisor and not an off-the-shelf answer to my issues. I get great advice, personal attention, and most importantly I get no surprises on fees. Charlie is great about flagging issues in advance, and working creatively to protect my interests without creating unnecessary paperwork. And his annual LLC maintenance plan keeps all my documents in order for a low flat fee. I would recommend Charlie to any consultant without hesitation.
Chris D., CEO International Consulting Firm
“We’ve had the good fortune to work closely with Charlie Brown during the past few years, and we’ve found Charlie’s expertise and professionalism to be exceptional.
Charlie quickly learned our business and has been instrumental in helping us with legal and strategic decisions. His knowledge of standards and practices beyond our own expertise has given us insight into the strategies of customers and associates. In complex negotiations with Fortune 100 companies, his contributions led us to hold our ground and acquire important liability protections. He’s ensured that we have implemented required legal protections that are critical for the health of a growing business.
Although legal issues can be complex and challenging, Charlie himself is always pleasant, sensitive to our deadlines, and flexible. He stays within quoted budgets, and he consistently demonstrates keen business acumen.
Charlie not only captured exactly our thoughts from the conversation the three of us recently had but also that again…he explained/broke-down the situation so well in his email to their procurement chief, so clearly and in a way that we feel we are best likely to get the response we want from this potential customer. Thank you very much!
Any business owner knows that having a good legal advisor is essential. Charlie’s work goes far beyond “good.” We look forward to working with Charlie as our business continues to grow.
Charlie’s candor allows me personally to understand & make decisions quickly that I feel are in our best interest.”
Dean and Kym H., Owners, SaaS Solution Company
I’m glad you’re on my side. Thank you so much for your competence, thoroughness and kindness. It is always nice to know I am in good hands. Thank you so much for your great work on my behalf. I have enjoyed your knowledge, communication, thoroughness, and professionalism. Thank you for your patience and fine work.
Dr. David G., Counseling Business Owner
After over 20 years of working for bigger firms and other people, I elected to establish my own consulting firm and needed help all the relevant and necessary organizing documents. Importantly, Charlie helped me separate cleanly from my prior organization and, as is usually the case these days, this separation contained several challenges with important and large financial consequences. Charlie helped advise and negotiate a successful split and helped me focus on moving forward. Further, Charlie helped advise me on the ongoing tasks in the successful operation of my firm.
Charlie is a very good listener and has a wonderful personal style which put me at ease and gave me great comfort. He is highly credible, has been around the block and is fully engaged. He is my go to guy for all legal issues.
Roy H., CEO Executive Recruiting Firm
Thanks for your help, generosity and timely advice. Your understanding of contracts and the methods to structure risk and expectations was outstanding. Your ability to provide contractual support was critical to the success of my consulting firm.
Hal K., CEO Consulting firm
I hold a Vision of Success for my company and I just believe that securing the rights to that name and all its potential is essential. Thanks for the offer to review my use of the (R) symbol, at no charge. I really do appreciate that, and everything you do for me and my business.
Thank you for your superb assistance, professionalism, and expertise.
Troy C., Owner Consulting Firm
When we were launching our new company, Charlie was referred to us by a partner of a white-shoe law firm who had done work with him in the past. Having started several new ventures previously, I knew the role we wanted our corporate attorney to play, and Charlie fit the bill precisely. At the outset, he listened carefully to the objectives of each of our capital partners and then laid out an organizational roadmap for us that was balanced, concise and on point. Throughout the process of negotiating our partnership agreement, Charlie offered both highly professional advice and considered recommendations based on his past experience, which allowed us to quickly reach a consensus on matters that otherwise might have become contentious. He is a practical, commonsense legal practitioner who delivers high-quality, cost-conscious work product. Charlie receives our highest endorsement.
-Bob D., Partner, Strategy Consulting/Merchant Banking Firm
“When setting up my consulting firm and structuring contracts with clients and other firms, I needed legal support for traditional reasons (e.g., operating agreements, contracts) as well as understanding the legal arena relating to professional services and more specifically, consulting services.
Charlie’s deep experience in providing counsel to consulting firms was particularly helpful to my colleagues and me. He balanced a refreshing level of pragmatism with keen insight into potential issues and opportunity areas, and offered alternative courses of action. He helped me to understand the business implications of these actions. Given his expertise in advising both consulting firms as well as corporations (my client base), he was able to see both sides of a legal position and help me to negotiate a reasonable outcome for both parties. In addition, Charlie was particularly effective at working with many stakeholders with different personalities and objectives, including client executives, attorneys, and members of my firm.
I would not hesitate to recommend Charlie to other consulting firms.”
– Pete S., President of Strategy Consulting Firm
“I was a partner in a technology consulting company and I engaged Charlie Brown to help me research a potential business issue with my partners. Accomplishing the project promptly was crucial and the outcome was highly important to me personally. Charlie quickly assessed the relevant issues in the documents and enabled me to make an informed decision”.
– Tom C., Partner, Technology Consulting Firm