What is a Consultant?

A consultant is someone who has a strong background or expertise in a certain area. They’re generally hired for a specific job and to evaluate the strength of an organization and make suggestions on how to make it more successful. A consultant is much more like an independent contractor than an employee.

Below the advantages and disadvantages of hiring a consultant are discussed. You can decide if employing a consultant is appropriate for you business.

Advantages of Hiring a Consultant

Here are some of the key reasons your business would hire a consultant:

  • Additional skills: Hiring a consultant can open access to some of the skills that are scarce or nonexistent in your company;
  • Experience: Consultants are usually hired for their experience and expertise in a particular area. Whether you hire a consultant for training or to set up a project, you rely on his or her expertise to get results within a specified time, which can enhance productivity;
  • Outsider perspective: A consultant will often provide an outsider’s perspective to the company’s undertaking, which can help prevent the company from becoming too insular in its thinking;
  • Reducing Costs: Experience of the consultants cuts training time and ensures the company avoids expensive pitfalls. Unlike regular employees, your company doesn’t have to maintain consultants on your payroll once the project you hired them for is complete. Your company saves on both benefits and payroll taxes;
  • Flexibility: Consultants often work on a flexible schedule. This can benefit your business as there is no long-term commitment to consultants;
  • Lowering the risk of legal action: Full-time employees are protected under Commonwealth and State laws and have the ability to take legal action against your business, should they feel their employee needs are not being met. This is not the case for consultants who are not covered under these regulations.

Disadvantages

Here are some of the disadvantages of hiring a consultant:

  • Higher Cost: Consultants sometimes cost more than regular employees because of their expert knowledge and the experience they have in the particular area of business they are hired for;
  • Lack of control: It is hard for your business to control the way consultants work as most of the time they work on their own and may work away from the office. Consultants may also have a few modes of employment hence at times your business needs may not take priority;
  • Quality control: If you’re hiring a stranger, you really know nothing about whether their skills will help or hinder your project. And consultants often work on their own time, in their own way. This lack of visibility can hide poor-quality work;
  • No knowledge of in-house procedures: Consultants don’t know your business or your organization and procedures as well as you do. They have to go through a learning period the first time you engage them.

What to Include in Your Consultant Services Agreement

Beyond the sort of information present in any contract—the signers names and addresses, for example, and the date the contract becomes effective—a Consultant Services Agreement should lay out exactly what the consultant is being hired to do and how they’ll be paid for it.

Here are some things to keep in mind when you’re writing your Consultant Services Agreement:

  • Detailed description of the project;
  • List of responsibilities;
  • Background and Services: Basically, what is the consultant being hired to do. You’ll want to include what background the consultant has and what services they’ll provide. For example, a startup might hire an SEO consultant to evaluate their website and help search engines discover it;
  • Payment: Consultants are paid in a variety of ways. Sometimes, they may be paid a fixed wage or on commission, but more often than not, a consultant is given a lump sum, either up front, on completion of the work, or some combination of the two;
  • Support and reimbursement: Depending on the job, the consultant might get an office from which to work, a secretary, or a company car for the duration of his or her time. You should make sure that’s noted in the Consulting Agreement. Furthermore, make sure you spell out if the consultant will be reimbursed for expenses they incur during the course of the agreement;
  • Liability: Since a consultant isn’t an employee, you’ll want to be clear about responsibilities and insurance in case of an accident.

An Important Note About Intellectual Property

The LawPath Services Agreement has provisions that protect the company’s confidential information. They’re a lot like what you’d find in a Noncompete Agreement or a Non-Disclosure Agreement. Since consultants often see the inner workings of an organisation, it’s important to make sure both parties know who owns what information and who’s allowed to talk about it. It’s a great idea to include a the noncompete provision if a consultant is touching any sensitive or proprietary data.

“Unsure where to start? Contact a LawPath consultant on 1800LAWPATH to learn more about customising legal documents, obtaining a fixed-fee quote from one our network of 600+ expert lawyers or any other legal needs.”

Dominic Woolrych

Dominic is the CEO of LawPath, dedicating his days to making legal easier, faster and more accessible to businesses. Dominic is a recognised thought-leader in Australian legal disruption, and was recognised as a winner of the 2015 Australian Legal Innovation Index.