Turnaround Consultant Engagement Contracts & Letters
Turnaround consultant engagement contracts range from simple one-page documents
to 50-page books. As a service to the turnaround consultant profession, I
would like to try to standardize an engagement letter for all of us.
In the following section, I will outline how I write turnaround consultant engagement contracts. I base this outline on writing scores of contracts and my experiences in negotiating the “fine points.” Honestly, no two contracts are ever the same. Nevertheless, in the turnaround consultant profession, there is a need for some boilerplate. Admittedly, what follows is not boilerplate, but a broad outline. Soon, I will write some boilerplate that we can use … so check back to this website.
Turnaround Consultant Engagement Letter Outline
Paragraph A: Identify the contracting parties (you and the
client)
Paragraph B: Scope of Work including subparagraphs Schedule
(times on-site), Responsibilities (what is your role) and Chain of Command
(who you report to and who reports to you)
Paragraph C: Compensation including subparagraphs for Continuing
Compensation, Deposits, Success Bonus, Payment Options and Terms
Paragraph D: Testimony (How you client will compensate you
if a court calls you to testify after the engagement is over.)
Paragraph E: Support Services (Client will provide all secretarial
and administrative services during he engagement.)
Paragraph F: Right to Output (Typically client owns)
Paragraph G: Personnel (Take a large fee if the client hires
your turnaround consultant as an employee.)
Paragraph H: Confidentiality Agreement (Each side agrees
to hold information of the other confidential.)
Paragraph I: Independent Consultant (Statement that you
are an independent contractor.)
Paragraph J: Limitation of Liability (Not responsible for
more than fees paid and only for gross negligence)
Paragraph K: Indemnification (You want the client’s
board to protect you as it does its regular CEO)
Paragraph L: Termination (How to end contract by both parties.)
Paragraph M: Governing Law (What state’s or country’s
laws apply)
Paragraph N: Arbitration (Require all disputes to settle
in arbitration and in what city and state)
Paragraph O: Authorization (The client states the client’s
board has approved this contract.)
Paragraph P: Entire Agreement (Client warrants that your
contract contains all agreements between you.)
Follow this outline and you will have a strong contract that will clearly spell out what you need to do and prevent disagreement with the client in the future.
Typically, my contracts are 4 pages long when we follow this format.
To help me pay for this web site, I would like to recommend a helpful publication for restructuring professionals. If you are a long-term practitioner or just starting out, you should buy the turnaround consultant handbook by Dan Betts, “The Insider Secrets to Saving Your Business: The Step-by-Step Turnaround Guide.”
This training manual is great addition to your professional library, and you should consider including this guide as part of your package of materials when your client engages you. It is an easy-to-understand guide for your client so you will not surprise him by the drastic actions that you must take to save his company.
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