BACKUP VIIIiconConsultant Contracts:Some Who-HowQuestions
Charles Harris, a lawyer who is expert in computer negotiations, ticks off a list of contract questions very similar to the Who-How from the newspaper world.
His list:
1. “Who?” Who from the contracting firm is doing the work? A junior member? If so, you might ask, “Can he perform? Will the consulting firm still bill me the full rate?” Find out the track record not only of the firm but also of the people actually doing the work. Write their names into the contract if you can. Spell out the qualifications of substitutes you’ll use if the original people leave the consulting firm before finishing the assignment.
2. “What?” Describe the task as clearly and precisely as possible. And in my opinion you might consolidate the “What?” and the “How?” here. Is there a right way and a wrong way of accomplishing the “What?”? Find out the right way before signing the contract.
3. “When?” Can you negotiate a penalty if the firm misses a deadline? And how about a bonus if it comes in early?
4. “Where?” Will the consultants do the work in your office? Theirs? On your computer? On someone else’s?
5. “How much?” Obvious.
In my opinion, you’d also do well to keep asking the “Why?”—to make the consultants justify whatever they have in mind for you. Why not? You’re the one spending the money.
Also, at least consider the following:
1. Thinking small. Don’t bargain over the Who-How simply for the whole project; break it up into parts. “You say, ‘For thismuch money we expect to at least get a machine in the door,’” Harris suggests. “‘For this much money we expect to get the following diskettes for the following programs.’ ‘For this much money perhaps we’ll talk about customizing software.‘” If a consultant flubs an early part of the work or specifies the wrong programs or equipment, then you can more easily send him packing. “But,” you worry, “can a rival consultant pick up the pieces?” Well, you simply insist that the original consultant do his work in as standardized a way as possible. See if he can use a program like dBASE II or III—software with which thousands of other consultants are familiar.
2. Making the consultant give you the source code of the new software. That’s another pick-up-the-pieces kind of protection.
3. Insisting that any manuals for his software be complete and in plain English. If your consultant can write only computerese, in fact, you might not even want to bother with negotiations.
4. Bargaining if possible for a software warranty. Then, if you discover glitches in the software after it’s in use, the consultant won’t charge you to correct his own mistakes. You might not succeed here. But try.
5. Possibly requiring the consultant to give you a discount on modifications or expansion of your system.
6. Negotiating for full or part ownership of the software he may develop for you. But don’t count on getting rich from the sale of the programs. Adam Green, a software training expert, tells of a computer-store salesmen who, in that way, would appeal to customers’ greed. A taxidermist, for instance, might hear this pitch: buy from me, use the right consultant, and you’ll make a killing in specialty software for taxidermists. “The consultants would usually intend to finish a job writing this specialty software,” Green said, “but it would drag on, and the customers would run out of money, and the things usually didn’t get finished.” Very likely youwon‘twant full ownership, because it would reduce the consultant’s interest in perfecting his brainchild.
7. Forbidding the consultant from selling the new software to your competitors. Antitrust complications might arise if you don’t bear the financial risks of software development. If you do, however, you’re within your rights to demand exclusivity, just as the consultant is within his rights to charge you more for it. “Trade secret” is a key phrase both here and on the issue of ownership. “I recommend to clients that they go fortrade-secret protection because copyright law protects the information only in the way it’s presented,” says William Wewer, a Washington lawyer who specializes, among other things, in intellectual-property law. In other words, an unscrupulous consultant might bypass the copyright law by using a different programming code to duplicate your new software’s functions.
8. Making the consultant pledge that he won’t violate any trade-secret laws or copyrights. You don’t want to suffer because someone else has plagiarized or pirated software. Be certain you’ll own themastercopies and instruction manuals that the consultant buys. Try to register immediately with the software company as the buyer or user of the disk. You want to know about updates of the product and about debuggings, which you won’t find out about with a pirated copy. A shady Massachusetts consultant has resold the same dBASE II program ten or fifteen times. The buyers think he is purchasing it for them and that he’s going to supply a version modified for their needs. “But halfway through the work,” Green says, “he just walks off.”
9. Hammering out a confidentiality agreement, if necessary, to protect company secrets. You don’t want an outsider blabbing to competitors.
10. Making the consultant agree in writing that he is working as your independent contractor, not your employee. Protect yourself against unfair Workmen’s Compensation claims and in similar ways.
11. Trying to write into the contract your right to a full explanation whenever you want one. Make the consultant justify his recommendation for a certain computer or a certain program; he owes you at least oral explanation and perhaps a written one. How much experience has he himself had with the product? Is he going by someone else’s word? Whose? How certain is he that the software-hardware combo that worked for the other person will work for you? Can he arrange a demonstration of the combo so you can see for yourself how the software runs?
12. Remembering that there’s only so much protection the law can give, especially at the micro level. Trade-secret and copyright laws can be vague and expensive to enforce—a major stumbling block to a small business. Your best protection is simply to deal with a reputable consultant whose credentials you have checked.
13. Choosing the right lawyer, if you can afford one, for the contract. He needn’t call himself a “computer lawyer.” Agood contracts lawyer or intellectual-property expert, if conversant with computers, might also work out.
If the job is simple enough, don’t negotiate in the same detail that GM does when installing a $10-million mainframe. Again, even with small tasks, do sign a contract or write a letter similar to the sample one on page 114. And if you can afford it and the job’s important enough, think about still-another contract—for a second consultant to check up on the first.