There are many misunderstandings about consulting proposals and engagement letters. They not only serve as a binding contract – they spell out the work you will do for the client . I always use a combination document that includes a proposal and engagement letter. The combination letter culminates by asking the client if the agreement correctly states the work they desire and if the terms are satisfactory.
The letter is not a sales job – I assume that you have already won the client or that he/she is considering using your services. Here are some basics or the “bones” to constructing a combination proposal and engagement letter.
- Situation – brief paragraph about the project the client wants to hire you for and why he/she is hiring a consultant and not doing it “in-house.”
- Type of Agreement – that your letter is the only working agreement between you and the client – any services beyond the scope of work will require another agreement.
- Methodology & Scope of Work – a chronological list of what you will do for the client in separate easy to understand numbered sentences or paragraphs.
- Deliverables – a numerated list explaining exactly what you will deliver in writing or by other means tied into the above Scope of Work.
- Timing – the delivery date of your work in part or in whole by an expressed date or within a time frame from the acceptance of the letter by the client.
- Fees – the exact fee you will charge for the completion of the engagement. Should also include a request for a retainer and define reimbursable out of pocket expenses.
- Prevailing Party Clause – what happens if there is a court proceeding relating to this engagement. The prevailing party may be entitled to attorney fees in addition to the other amounts and remedies decided by a court.
- Acceptance – requesting the client to sign and send the required retainer.
Caveat – As always, ask an attorney to prepare your legal work.
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