Before establishing a formal business relationship, wise IT project managers protect their business interests with appropriate legal contracts.
During the initial stages of project development, IT professionals often rely on informal records based on e-mails sent back and forth with the client. While e-mail does provide a record of communication between you and your customer, legally, it can’t stand in for a signed project agreement that clearly outlines the scope and expectations of a project.
As part of a good project risk management strategy, it’s especially important to have a consulting contract or project agreement in place before any money changes hands.
A Project Agreement Is the Foundation of Project Risk Management
Having a signed IT project management agreement before you begin an engagement can reduce or eliminate complications that could spring up during your project.
Solid project agreements or contracts are a critical first step in project management, as well as a vital part of your project risk management plan to protect your business. Defining all project elements early and in writing may help prevent legal trouble down the line, saving you thousands of dollars in legal costs and countless hours in a courtroom.
A sound project contract also helps to ensure that you receive the compensation that you and your client have agreed upon. Too often, a project is well under way when a client suddenly decides not to pay, tries to lower the price of the job, or changes project terms. If any of these things happen and your interactions with your client are not governed by a contract, you could lose a lot of time and money, and your good relationship with your client could quickly go south.
Consulting Contracts for IT Project Managers
In general, consulting contracts spell out each party’s responsibilities, as well as:
- Project reporting
- Termination rules
For tech project managers, a consulting services agreement typically spells out the work you are to do and defines the terms of your working arrangement with the client. It lays out the limits of your responsibilities to the client, as well as the terms for your pricing and payment.
A consulting agreement also protects your intellectual property rights and establishes confidentiality standards that protect both you and your client. It limits any losses for the work you perform and prevents your client from hiring away your key employees. This type of project agreement also limits your liabilities should your client suffer any losses as a result of errors or omissions on your part.
In addition to the main consulting agreement, depending on the job, project managers may need other, additional contracts. These agreements might include employment, network installation and maintenance, staffing and placement, or subcontractor and independent contractor agreements.
Subcontractor or independent contractor agreements are particularly important because they govern the relationship between you and any subcontractors you may hire to work on a project. Such contracts clearly outline who owns licenses and intellectual property, and prohibit your subcontractor from stealing your client’s business or from being hired away from you by the client.
Is it Time To Hire an Attorney?
If you’re in the early stages of project development, and think that you’ll have to spend a lot of money on a lawyer to create all the contracts you’ll need, don’t worry.
Knowing that many small IT firms and sole proprietorships don’t have the financial resources to have a legal professional draft agreements for every engagement, TechInsurance launched a company that specializes in affordable template project agreements just for IT project managers and other tech professionals and small-business owners.
ContractEdge (www.contractedge.com) offers complete sets of project contract templates and samples for tech project managers. ContractEdge software guides you through a list of questions to automatically populate each template project contract, creating a solid first contract draft that will be valid in any state. Each agreement template can be customized and used again and again.
If you think a contract might need further customization, you can always hire an an attorney to review the initial draft, at a much lower price than if the lawyer had drawn up the contract from scratch.
Writtten by Brenna Lemieux - check her out at Google+ or Twitter