Contract Review (Seriously?) - Beyond Fees to Stewardship and Value

This past week - three different clients/contacts talked about the need to review either their contract or their relationship with their consultant.  The circumstances include;

•  A conversation with the CFO about spend resulted in the client realizing that their contracted fees felt greater than actual 'work' or services.

•  A consultant team lead changed - the new lead is struggling to match the expectations of the client - even though the predecessor got it right for so long.

•  A new Total Reward Leader with new/different expectations meets multiple consultants and or providers who are still doing the same things - not realizing they have a 'new' client - with a different way of working and view of 'success.'

Frankly, after 25 years working to create great client/consultant partnerships, this is more of a common occurrence than you might think.  A lot of effort goes into establishing your consulting relationship and supporting contract.  But, handling changes in the relationship or simply allowing your agreement and relationship to 'age' without review happens all the time.  

The Result: many times, it's ok......little is noticed.  Sometimes: needs changed, new expectations weren't met, some asks, 'why so much' and relationships suffer (sometimes unvoiced until something 'broke').  

That's sad - and avoidable. 

Contract Reviews - What People Think About

Contract reviews often focus solely on fees - negotiating rates and deliverables - missing a crucial inputs to 'getting things right.'  Further, that narrow focus misses the opportunity to foster stewardship and maximize the value.  A little broader approach gets to better outcomes for both parties and a more satisfying long-term partnership.

And it does NOT have to be a big effort......

Rethinking the Contract Review Process

A more effective approach involves modernizing the agreement to reflect the actual activities, timing, insights and interactions required for success and satisfaction.

1. Independent Activity Mapping

We use a templated approach asking both the client and consultant to independently describe the key activities and meetings necessary for the year ahead. This exercise helps identify potential gaps in expectations and ensures all critical components are considered.  

2. Collaborative Alignment

Once both parties have completed their activity mapping, a facilitated conversation happens to compare results. This process involves conversation and productive debate, leading to a more accurate and mutually agreed-upon scope of work.

3. Satisfaction Assessment

We include a 'satisfaction segment' focusing on areas for improvement to enhance the effectiveness of the relationship. It provides an opportunity to address unspoken concerns or "micro-abrasions" that may erode satisfaction and trust over time.  It also gets to an understanding of 'ways of working' that can be very productive.

4. Fee Evaluation in Context

Only after establishing clarity on the scope and relationship expectations are fees discussed. This approach ensures that compensation is aligned with the actual engagement requirements and real and perceived value delivered.

Benefits of a Comprehensive Review

This modernized approach to contract review offers several advantages:

1. Improved Alignment:  By clearly defining expectations and activities, both parties are better positioned for success

2. Enhanced Trust:  Open discussions about satisfaction and potential improvements foster a stronger, more transparent relationship.

3. Value-Based Pricing:  Fees are determined based on the actual scope and value of the engagement, rather than arbitrary rates.  (And, lets not talk about 'benchmarking' fees please......following our approach is much more realistic)

4. Long-Term Partnership:  This process lays the foundation for a more sustainable and mutually beneficial relationship.

By adopting this more holistic approach to real stewardship, consultants and clients can build stronger, more effective partnerships that deliver greater value over time. This process not only modernizes the agreement but also reinforces the principles of mutual success that are essential to long term partnerships.  

It's absolutely the relationships we believe in and work to create - whether we are helping you select a new partner or reaffirm the foundation on your existing partnership.  

We want that for you.  

We are here to help.  

Are you ready?