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Negotiating Payment Terms
Prior to signing an agreement, the parties must determine how the consultant is to be compensated for their work. The client is usually charged an hourly rate for consulting work. Sometimes, a flat rate per period or project may be used instead.
Technical consultants sometimes also require the payment of a retainer or contingency fee to guarantee their services. A retainer is an upfront deposit paid prior to delivery of services and a contingency fee is a percentage or amount the consultant receives for reaching an objective.
Types of Technical Consultants
Development Technical Consultant – Works to solve technical issues in the development of software or hardware.
Engineering Technical Consultant – Proposes technical solutions to a company’s obstacles and needs.
Hardware/Software Design Technical Consultant – Assists an engineering team or operates independently to design a product.
Process Technical Consultant – Audits an organization and provides technical solutions that improve their manufacturing operations.
Technical Training Consultant – Trains end-users on how to use software programs or system hardware.
Technical vs. Functional Consultant
Although many roles may overlap under the title of “technical consultant,” it is generally understood that technical and functional consultants are two separate but complementary roles.
A functional consultant assesses the client’s needs and translates those requirements into a functional solution with specs for a software solution. To work in this field, an individual must be proficient in customer relationship management (CRM) systems.
A technical consultant uses the functional consultant’s specs and, upon client approval, codes the software-based solution. Technical consultants need to be fluent in advanced business application programming (ABAP) and JavaScript.
Sample
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TECHNICAL CONSULTANT AGREEMENT
This Consultant Agreement (“Agreement”) is made effective as of [MM/DD/YYYY] by and between [CONSULTANT NAME], with a mailing address of [CONSULTANT ADDRESS] (the “Consultant”) and [CLIENT NAME], with a mailing address of [CLIENT ADDRESS] (the “Client”).
1. SERVICES. The Consultant agrees to provide the following services to the Client: [DESCRIBE DEVELOPER’S SERVICES] (“Services”).
2. COMPENSATION. In consideration for the Services to be provided, the Client agrees to pay the Consultant $[AMOUNT] per hour.
3. PAYMENT METHOD. The Consultant shall be paid, in accordance with section 2, upon the Client receiving an Invoice from the Consultant.
4. TERM. The Services shall commence on [MM/DD/YYYY] and end on [MM/DD/YYYY].
5. RETAINER. As an advance on future Services to be provided, the Client is required to pay the Consultant a retainer in the amount of $[AMOUNT] every ☐ week ☐ month ☐ quarter, beginning on [DATE] (“Retainer”). The Retainer is non-refundable.
6. CONTINGENCY. As part of the Consultant’s pay, there shall be a contingency fee arrangement in accordance with [PERCENT]% of [CONTINGENCY REQUIREMENTS].
7. NON-DISCLOSURE. The Consultant agrees not to disclose or use the Client’s proprietary or confidential information without prior written consent, except as needed to perform the Services, recognizing that such actions would cause irreparable harm to the Client.
8. EXPENSES. The Client shall be responsible for the following expenses: [LIST EXPENSES TO BE PAID BY CLIENT].
9. INDEPENDENT CONTRACTOR STATUS. The Consultant is an independent contractor, and neither the Consultant nor their employees or contract personnel are or shall be deemed the Client’s employees.
10. TERMINATION. Either party may terminate this Contract upon [#] days’ written notice.
IN WITNESS WHEREOF, the parties have executed this Agreement on [MM/DD/YYYY].
Consultant’s Signature: ____________________ Date: [MM/DD/YYYY]
[CONSULTANT PRINTED NAME]
Client’s Signature: ____________________Date: [MM/DD/YYYY]
[CLIENT PRINTED NAME]