You didn’t get into coaching to write contracts. If you did, you would have gone to law school - and you’d now be in a profession for which the phrase “lawyer jokes” generates over 40 million search results on Google.
That said, coaches do need contracts. For one thing, if there’s ever a dispute, you’ll be glad to have something in writing that documents what you and the client agreed to at the beginning. Well-written contracts can also reduce your legal risk if something goes wrong and can, if appropriate, protect your intellectual property. They can also help protect you from being taken advantage of financially, as Chans Weber, founder and CEO of Leap Clixx explains:
It is much easier to extract money from a difficult client if you have a written agreement detailing what is charged and what is 'included' and it minimizes the embarrassment of resolving misunderstandings over money matters.
However, limiting your risk is only a small part of the value of a contract. “Contracts are about more than wrapping your clients up in red tape and telling them what they can’t do,” explains Ethan Taub, CEO of Loanry. “Think of your contract as relationship insurance: it does all the hard, boring work of keeping the relationship on rails, so you can focus on the coaching.”
Career coach Gracie Miller of Live Life Purpose Coaching elaborates on this point. “The reason for contracts is to make sure that both parties are on the same page about what services are being provided as well as what services are not included (such as time between sessions to answer questions, review resumes, or other special requests a client may have).”
That said, contracts are not a tool that you wield against your clients; clients benefit from contracts as well and your clients should be happy that one exists. Fred Garcia, president of The Logos Consulting Group, explains how both parties benefit:
Contracts are tools to set expectations between the coach and the client. For clients, it determines what services they can expect to receive, for how much, and over what period of time. For coaches, contracts protect them from over-servicing clients and being underpaid. If there is ever disagreement or confusion, both parties have something objective to refer back to.
Linda Mueller, certified life coach of TheExpatPartnerCoach.com, emphasizes that this mutual benefit should come through as the contract is presented to the client:
The presentation of the contract is also important as all of this is taking place as the client/coach relationship is forming. I present it as a mutually beneficial agreement that will enable us to fully focus our time on the coaching relationship without getting distracted by administrative details. It is helpful to review the contract verbally on a high level to be sure that the client understands the key points before signing.
In the next 3 sections, we will cover some best practices used by coaches on the awarenow platform as well as other experts, for how to create and use contracts that position you for success.
Contracts for Coaches Tip #1
Define the Relationship
The most important part of a contract is to define the work that is to be performed, how you, as the coach, will be paid, and what happens if things go wrong. Brian Robben, CEO and founder of Robben Media, stresses that there should be no ambiguity here:
In the contract, clearly communicate your services, their contributions, and the payment terms. There should be no confusion. Also include the terms of what happens if the agreement is terminated, or terminated early. By having every scenario filled in with a contract, you can relax knowing you're covered.
Mueller gets into some specific details on how these various areas can be broken down:
- Contact & Coach Credentials: Name and contact information for coach and client. Coaching credentials and experience should also be stated.
- Situation Overview: Purpose of engagement including goals and timeline.
- Description of Coaching & Coaching Relationship: Description of the coaching process, roles and responsibilities. State that the client is responsible for their actions and for taking action, as well as communicating honestly.
- Services Provided: Outline length of coaching program, number and duration of sessions, detail regarding session logistics, services provided between sessions (eg, communication, reviewing documents), fees and your cancellation policy.
- Legal Disclaimers: Clearly state that coaching is not a substitute for mental therapy. Also include detail on your termination and refund policies, as well as confidentiality.
Rahul Gulati, founder of GyanDevign, adds to the above that coaches can consider including specific language around “things that the consultant will not do”, “an ‘About Me’ section to differentiate yourself”, and an “FAQ section at the end”.
Author and life advocate Jenn Drakes of ICANNWORLD, agrees with many of the above elements, also adds “definitions to ensure clarity on the meaning of key terms and language used in the contract” and notes that “it is important that the SOW also call out dependencies, especially related to the client, as many times their failure to act presents delays that are outside your control.”
Contracts for Coaches Tip #2
Address ‘Unique to You’ Issues
While most coaches will need to use most of the elements covered in the first section of this guide, many will also have aspects of their business model that should also be addressed in a coaching contract.
For example, if you’re an independent contractor, Lauren Blair, legal writer of FreeAdvice.com, suggests that this status be explicitly defined as follows:
An independent contractor agreement should define the relationship between the contracting parties. It should make the independent contractor status clear by stating that the services or work is being performed as a non-exclusive, independent service provider, and not as an employee, agent or other representative of the hiring entity. It should also state that the independent contractor will determine the method, details and means of performing the scope of work, and that the hiring entity has no right to direct, control or determine the manner or method by which the work is performed.
Such clauses need not only reflect the legal structure of your business, but also your business model. CEO and co-founder Laurence J. Stybel of Stybel Peabody Associates explains how he uses contracts in this way:
I ALWAYS insert this paragraph into every contract. I call it No Fault Divorce paragraph. The goal is to assure my client corporation that I will not have them pay for a coaching assignment when there is little to no commitment on the part of the coachee for success. I don't want to waste my client's money or my time. I want my interventions to end successfully. In one month, I can usually tell whether it will be a journey to success or failure.
Contracts for Coaches Tip #3
Don’t Reinvent the Wheel
While many elements of a coaching contract - including many of those discussed in the first part of this document - require customization for each client engagement, this customization can still exist within a template. For example, the start and termination date of an engagement may change from client to client, but the overall language discussing start and end dates often need not be. The International Coaching Federation has contract templates to get you started.
In addition, many contract terms may never need to change at all from client to client and can simply be copy and pasted. Such terms are often referred to as “boilerplate” and Shushan Barsegyan, Esq. of Full Circle Business Law recommends their use:
Boilerplate gets a bad reputation, but it's very important. Boilerplate language includes things like who is entitled to attorneys fees if a dispute arises, whether the contract is meant to be the entire understanding of the parties or if there are other documents that contain additional terms, and how the contract can be modified.
Still, like anything involving contracts, coaches need to be careful with how they use templates and boilerplate, especially when modifications do become necessary. Legal coach Lisa Fraley of Lisa Fraley Legal Coach LLC notes the potentially negative ‘butterfly effect’ of modifications made without sufficient care:
I often see coaches getting tripped up when they attempt to use the same contract for all of their programs and repeatedly edit the contract for new clients. What most coaches don't realize is that when they edit one section of the contract it often affects several other sections. The coach can end up putting themselves at risk by making edits which directly negate other sections that can result in them having to give refunds, accept late payments, or reschedule calls - and yet they don't even realize it.
As such, David Reischer of LegalAdvice.com strongly recommends that your contracts be drafted and modified by an drafted by an attorney:
The contract if it is a business relationship should be drafted by a qualified attorney to avoid disputes between the parties. A qualified attorney will be sure to include all the important details such as a refund policy, cancellation policy, disclaimers, expectations, payments, goals, milestones and dates…The cost of hiring an attorney if there is a dispute and filing a legal claim through the court system will be very expensive so it is best to try to avoid that outcome with a clear written contract.
Contracts are important to ensure that you and your client are on the same page about the nature of your engagement and to document this in case there are misunderstandings later. They can seem daunting to put together, but by effective use of templates, boilerplate, and legal advice, they need not drain significant time or resources away from your business on an ongoing basis.
Contracts can also provide legal protection if a relationship gets very contentious, but trying to enforce contracts through the legal system or a dispute arbitration system should only be a last resort, and only where there is significant money or other issues outstanding. Luke Smith, founder of We Buy Property In Kentucky, emphasizes this point:
We have clients that will sign a contract and then later back out. Although we have a contract, we let them back out. The contract is more for our protection while we’re working with them. If for whatever reason they decide not to fulfill the contract with us, then we walk away. We want to do business with people that want to do business with us. We’re never going to force someone to stay with us just because we have a contract.
We wholeheartedly recommend that approach.
Photo by Kelly Sikkema