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| Wednesday, 01 December 2010 15:05 |
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Taylored Comments Reviewing Agreements by Lowell Wolf, Consultant When was the last time you reviewed your agreements? The contracts/agreements used in your business should be reviewed at least once a year. Similar to your smoke detector batteries at home, keeping your agreements up-to-date protects one of the most important assets of your life – your business! The need for review, of course, becomes even more important when there is a change to the basic structure of your company or you begin to enter new lines of business. And then the politicians, either in your state legislature or in Washington, D.C., may come up with another well-meaning law that can catch you off-guard. Of course you have several contracts you use in your business . . . Right? Well, one or two basic agreements just aren’t enough to protect your ASS(ets) anymore. The primary purposes of contracts are to:
One of the biggest “show stopping” issues an IT Provider faces every day is the possibility of losing or damaging a client’s data. You must, at a minimum, use a contract that covers every situation in which you may access your client’s data. The contract should, generally, make the client responsible for backing up their data. You should be able to avoid liability for the consequences of lost customer data except in the most extreme case of intentional harm or gross negligence. It’s hard to imagine any component of a client’s hardware or software that doesn’t have some connection with their data. Even a UPS that hasn’t had its battery replaced in two years could be the cause of significant data loss. Consequently, whenever you offer a service to your client, whether it takes the form of help desk support, firewall maintenance, spam filtering, server monitoring, etc., loss of data must be the subject of at least a paragraph of the respective agreement. We’ve seen many IT Providers begin offering some form of managed service without covering the terms and conditions of that service in an agreement. We hear that “they’ll get around to it first chance they get.” Then a “huge” business opportunity appears and the contract gets pushed back again, and again. Not only that, we’ve seen managed service programs evolve over a couple of years without any change to the managed service agreement. You may have twelve MSP clients under twelve different forms of service arrangements. You must think through your MSP business model and the associated agreement rather than allowing it to evolve haphazardly. This in turn will allow a smoother sales effort and will tremendously reduce the amount of time it takes to invoice all of the different managed service permutations that have been created over time regardless of the PSA business system you use. Onto the next subject of people who perform work for you: employees and contractors. This area of law can be complex and courts are often sympatheic to employees claiming unfair treatment. If a case is brought against your firm, defending your actions and practices can be very expensive. There are a few basic agreements all employers should use:
Fortunately, bad things don’t often happen to good people. But I think we’ve all learned the lesson that life, after all, is not always fair. These are just a few of the agreements you should be reviewing in your business. Be prepared. Cross the t’s and dot the i’s. You’ll sleep much better. Call me at (816) 737-3681 extension 42 if you would like to discuss these or other matters.Comments (0)
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