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Monthly tips to improve the business and practice of members of The Society for the Advancement of Consulting, LLC - Issue #37: October, 2006

How to collaborate

How to collaborate without losing your shirt or the client:

  • Don't create collaborations unless there is clear business on the table. Otherwise, they are theoretical and never appropriate if true piece of business comes along. Moreover, it's fool's business to spend time managing relationships that aren't actively involved in business.
  • Someone has to run the project and be the engagement manager. This rarely works with multiple contacts. One person subcontracts to the other; one person invoices; one person periodically communicates with the buyer. All of those are the same person, preferably you.
  • Make it clear who provides what intellectual property or methodology, and who delivers what and when. There is no need for both of you to participate in everything, and, in fact, that creates excessive labor intensity.
  • Agree on expense policies and reimbursements, as well as when client fees will be distributed to both parties. Keep some fees in escrow to cover unforeseen expenses and/or unexpected project changes. Don't forget, if the project fails you may have to refund fees, and if one partner has spent the money or refuses, you could be liable for it all.
  • Work product can get tricky. What you develop specifically for the client belongs to the client. What you brought with you remains yours. However, what each partner brought should remain his or hers and not be "automatically" absorbed by the other partner. You probably need to make this explicit.
  • With multiple authors, a publisher will insist on one of them being the prime decision maker. Similarly, one partner has to have the authority to make decisions with the client without saying, "We'll get back to you." That means, on the minor side, that you know who will pick up the dinner tab, and on the major side, who will tell the client, "I'm sorry, but that request is not within the scope of our project, though we'd be happy to amend the current proposal."
  • Determine what happens with follow-on and/or spin-off business. Do you both participate even if the work demands only one of your methodologies? Are you in this together, ad infinitum, no matter what? Or are you only collaborators on the project at hand?
  • Make plans to comfortably handle the possibility of the client wanting only one of you in the future. I've seen this scores of times. The client is simply more comfortable with one than the other. Do you fall on your sword and say, "Both of us or nothing," or do you pay a commission to the partner while continuing the work? I advise the latter.
  • Have an internal "out." In other words, what if your partner fouls up royally? Do you have the option of getting rid of them and bringing in someone else? What if the client says, "You're fine, but dump the dummy"? You need a buyout or some mechanism so that all is not lost.
  • Make sure it's someone you can trust with your wallet. If you need a 40-page legal document to cement the collaboration, it's probably not a good one.

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