The popularity of our physician consultant database has shown us that physicians love being able to use their expertise for consulting gigs. In our physician communities, we often get questions about how much doctors should get paid for consulting work as well as how to structure consulting arrangements and compensation. Part and parcel to these questions, we sometimes see requests for physician consulting contract templates or examples. Although a full contract is not always necessary, setting the terms of engagement either via a statement of work, consulting agreement, or formal consulting contract is an important aspect of engaging in consulting work that should not be overlooked. This article will cover what a physician consulting contract or agreement should include, what things to look out for, and other best practices.
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Do I need a consulting contract or an agreement for my physician consulting gig?
The consulting agreement or contract serves as a legally binding agreement between the physician and the consulting company, and allow both parties to plan accordingly with terms like payments, deadlines, non-disclosure agreements, and more. While it’s always nice to have something in writing that outlines the terms of engagement, sometimes the individual contracting process can significantly increase the opportunity cost of taking on work as well as delay the start of the work. If it's more trouble than it's worth for either party, there's a good chance that a consulting opportunity that needs a quick turnaround time won't go forward if it requires lots of back and forth negotiations. Therefore, for one time straightforward consulting gigs, you may want to sign a standard agreement or contract that is given to you by a company or engage in good faith with a reputable consulting company.
However, if you’re going to do a lot of this work with different companies, you'll want to create a standard consulting agreement or contract template that you can easily give out or tailor to your consulting gigs which is designed specifically for your protection and according to your preferences.
Also, if you plan on working with one company repeatedly over a long period of time or entering into a longitudinal consulting agreement for a more substantial project, it's well worth the upfront time and effort to establish a solid contract that outlines each party’s responsibilities and obligations to ensure a smooth working relationship.
Having your own consultant agreement will not only make engaging easier, but will signal to the opposing party that you are a seasoned professional, which may allow you to command higher rates or make you more likely to get a gig.
As such, we highly recommend that those doctors who intend on regularly engaging in consulting work have a customizable template prepared, which can easily be tailored to a specific situation. This will also preclude the loss of momentum that sometimes leads to people losing consulting gigs because a company gets the information they need elsewhere prior to the logistics of engagement with you being completed. Additionally, when you have your own agreement, it's more likely that you will get the things that are important to you than when you have to ask to have them added to someone else's contract, and less likely that you overlook the exclusion of something that protects you when reviewing someone else’s contract.
What’s the difference between a physician consulting agreement and a physician consulting contract?
In some cases, there may be very little difference, but strictly speaking, an agreement is a less formal statement of work that simply states the terms of engagement, whereas contracts usually have a lot more legal terminology about warranties, indemnification, and liabilities. The more involved your arrangement, the more likely a contract is appropriate. However, in most cases for one off projects or short term assignments, an agreement or statement of work may be sufficient and more practical from an efficiency standpoint.
What should a standard physician consulting agreement or contract include?
While it's not be possible to have a single contract that covers every possible situation, particularly as consulting agreements tend to vary widely in scope and terms, you should consider including the following elements into your consulting agreement or contract template. These can then be tailored to the specific engagement.
Dates - State the date that the contract goes into effect.
The Parties Who Are Entering into the Contract - You want to know who is ultimately responsible for paying you and upholding the terms. While you may have secured a consulting gig through a third party, you need to establish who is legally responsible for ensuring that the terms are honored. Many contracts will include not just the names of the parties, but also their business names if different than the brand name, along with addresses and other contact information.
Usually the beginning of the agreement will state something along the lines of, “The ______ (‘client’) would like to hire _______ (‘consultant’) to perform consulting services pursuant to the terms of the contract.”
The Scope of the Work/ Services Provided, Duties, and Deliverables - This section delineates what you will do for the company. Be as specific as possible, outlining any deliverables. State that anything in addition to the specified services will be negotiated separately and added as an addendum to make it clear that other requests will require additional payments and terms. This avoids situations where you agree to one hourly rate based on virtual work, and then they ask you to come for an in person component and expect you to do it for the same rate. If there is anything that you know for sure you do not want to do, you can also include it here. Also make sure that you specify what the client has to give you to make it possible for you to do your job and complete it on time (background materials, etc.).
Deadlines and Timeframes - While you don’t want to be renegotiating a contract every 2 months, you also don’t want to be stuck with the same rate for 4 years, so include dates for auto-renewal or renegotiation. Additionally, the company will want to ensure that you don’t take 6 months to complete a task that they need completed in 1 month, so this section will also outline deadlines for you to complete the work.
Compensation - This is of course one of the most important parts of the contract, where you agree to how you will be compensated for your work. It may be as simple as listing an hourly rate, but if there are nuances or different fees for different tasks, outline them here. If any portion of the compensation is contingent on success or other factors, put the terms here.
Payment Terms - Specify when the payments will be made, as well as invoicing and time-keeping policies, and if applicable and allowable in your state, late fee policies. If you charge a retainer, specify that it has to be paid before the start of the work. If you’re submitting hours and invoicing them, outline how many days after the invoice is submitted that payment is expected and what happens if payments aren’t made on time. The company may also have certain requirements about the invoice time frame or details that they want included on the invoice. Specify the means of payment and who pays any related transaction fees. For credit card payments and wire transfers, there can be associated fees, so you want to state if there is a preferred method of payment. If this is a contract with a company that has operations outside of the United States, specify the currency.
Intellectual Property and/or Likeness Agreements - A good consulting agreement for physicians should include what they can and cannot do with your work. For example, if you don’t want them to have free reign to produce commercials or advertisements using your face or words, you should spell out that any content produced from your work that has your name, quotes you, or otherwise features you is approved by you. You may also want to include a timeline for how long they can use this content, as the company or its products could look different in a few years, and your willingness to be publicly associated with the brand may change.
Confidentiality and/or Non-disclosure Agreements (NDA) - Consulting work will generally give you access to information about a company’s product, decision making process, or future plans. Not surprisingly, they will want to protect themselves from you sharing this valuable information with others. It is not uncommon to have a confidentiality clause that outlines what you can’t share for a specified amount of time, and what the consequences are if you violate those terms.
Exclusivity - As you are likely being paid as a 1099 physician, you do not have an employee relationship with most consulting agreements. However, some companies may have terms about working for other similar companies. If you have concerns about this clause, voice them upfront - for example, “I’m also a consultant for company ___, which shares a common business model. While I will not tell them about your plans, I want you to know this.” If they agree it’s okay for you to be in both roles, confirm this in writing and include this in the clause so that there’s no issues later.
Independent Contractor - Most consulting agreements include a statement that says the consultant is an independent contractor and that the agreement does not constitute an employment or partnership agreement with the company/client. What this means, practically speaking, is that you pay your own taxes, and you are your own boss.
Termination Clause - If there is a known end date, put it here. Similarly, if the agreement will be over once the deliverables have been fulfilled, state that. If however, this is an ongoing agreement, put the terms specifying how to end the relationship here. Include how much notice is required, what you get paid out for if there is any trailing compensation related to your agreement, and under what circumstances either party can terminate immediately (for example, breech of contract, not paying on time or poor quality of work after an attempt to remediate).
Litigation and/or Arbitration Clause for Disputes - Hopefully it doesn’t come to this, but you want to make sure there is a fair dispute process. In most cases, the company will have deeper pockets then you, so protect yourself from a situation where you have to spend a lot of money getting what you’re due. For example, a clause saying that the person who is in the wrong will pay legal costs will ensure that you can go after due payments without having to spend more money chasing the payments than you were due. This clause will also state the jurisdiction where the agreement will be enforced and the state whose laws will apply if legal proceedings occur. Again, as the one with the smaller pockets, try and keep all this local to you, or the need to travel or hire an out of state attorney may practically preclude you from enforcing the contract.
Entire agreement - Many contracts will state this this agreement represents the entire agreement between the two parties and supersedes any other communication or oral agreements if not included herein.
Signatures and roles - The last part will be a place for each party to sign and indicate their role within the respective companies, as well document the date of execution.
As always, note that we are not attorneys, and if you need help drafting or reviewing a contract, you should contact one. If you need an attorney, we have a list of lawyers for physicians specializing in various fields that have been recommended by our members. Things like indemnification clauses or shareholder agreements can become quite complicated, so if you have these in your contract, it’s an especially good idea to run them by someone.
Learn more about indemnification clauses in contracts.
What are good guidelines to follow for a physician consulting agreement or contract?
As you saw above, we used the word specific often. These agreements should not leave much to interpretation, and not leave anything to assumption. Define all terms, give concrete timelines and descriptions for any deliverables, and in general, add details for whatever is known or agreed upon.
Whenever possible, make all terms mutual instead of one sided. This applies to things like confidentiality and indemnification clauses as well. Just as your client wants to protect their business and reputation, you should as well.
As with your physician contracts, you want to keep an eye out for anything that resembles a non-compete clause. This may be a separate clause, or be veiled within the confidentiality or exclusivity or intellectual property clauses. Be very careful about signing something that will preclude you from taking on other work that you might want to take on. If you feel their request is reasonable and you don’t need to take it out altogether, at least make sure there’s a time frame associated with it so it’s not indefinite/forever.
If you are producing a deliverable, be wary of anything stating they could ask for a refund later. For most physician work, you produce a product that reflects what the knowledge/expertise is at the time. However, for example, if new data or a new product comes out and renders your work obsolete for some reason, you don’t want there to be any possible clawback of funds. Some companies will try to include “warranties,” and you should be careful about agreeing to these unless for some reason applicable to your services.
Conclusion
All in all, you want your consulting agreements and contracts to be as clean and clear as possible. Do not leave room for disagreements or differences in interpretation. While most physicians engage in work in good faith, remember that some of these companies have many layers of management, and that employees leave. Just because you like and trust the person you’re interacting with doesn’t mean that you will have the same experience with others in the company.
In general, most physicians in our communities echo that they love consulting positions, and complaints tend to be few and far between. However, when they do happen, it’s often related to payment issues or a discrepancy in expectations about responsibilities. Having a well drafted consulting agreement or contract can help to prevent or mitigate these frustrations.
Additional consulting resources for doctors
Search our database of local contract attorneys for physicians if you need help putting together your consulting contract.
Explore our medical consulting opportunities for physicians page for more information about consulting.
Join our Physician Side Gigs Facebook group to sign up for our consulting database to find out about future consulting opportunities that meet your criteria. Both the group and database are free to join, but you must be a physician.