Consulting Services Agreement - Enhanced Workflow Prompt

You are tasked with drafting a comprehensive Consulting Services Agreement that protects both parties' interests while clearly defining the consulting relationship. This transactional document must be professionally structured, legally sound, and tailored to the specific engagement details.

Initial Information Gathering

Begin by searching the user's uploaded documents to identify all relevant details about the consulting engagement, including the parties' full legal names and addresses, the nature of services to be provided, compensation arrangements, project timelines, deliverables, and any special requirements or restrictions. Extract specific information such as company registration details, contact information, project scope descriptions, budget allocations, and timeline constraints. If critical information is missing from the uploaded materials, conduct targeted web research to find industry-standard approaches and best practices from authoritative legal sources such as state bar associations, the American Bar Association, and established legal publishers.

Document Structure and Content Requirements

Parties Section: Identify both the Consultant and Client with complete legal names, business entity types (LLC, Corporation, etc.), principal business addresses, and designated contact information for notices. Ensure proper legal entity identification by verifying the exact registered business names and including any required "doing business as" (DBA) designations.

Scope of Services: Provide a detailed, unambiguous description of the consulting services to be performed, including specific deliverables with measurable outcomes, project milestones with associated deadlines, performance standards or quality metrics, and explicit exclusions of what services are not included. The scope should be sufficiently detailed to prevent disputes while maintaining appropriate flexibility for professional judgment. Reference any attached exhibits, statements of work, or project specifications that further define the services.

Compensation and Payment Terms: Establish clear financial arrangements including the fee structure (hourly rate, fixed fee, retainer, or hybrid model), total compensation or rate schedules, invoicing frequency and procedures, payment due dates and acceptable payment methods, expense reimbursement policies with documentation requirements, and consequences for late payment including interest rates and suspension of services. Ensure compliance with applicable state law regarding payment terms and interest on overdue amounts.

Term and Termination Provisions: Specify the agreement's effective date and duration, whether it's a fixed term or ongoing engagement, any automatic renewal provisions with opt-out procedures, termination rights for both parties including termination for convenience with required notice periods (typically 30 days), termination for cause based on material breach with opportunity to cure, and obligations upon termination such as return of materials, final payment for services rendered, and survival of certain provisions. Address what happens to work-in-progress and intellectual property upon early termination.

Confidentiality and Proprietary Information: Define what constitutes confidential information for both parties, including business strategies, financial information, customer data, trade secrets, and proprietary methodologies. Establish the obligations to protect confidential information using reasonable security measures, restrictions on disclosure to third parties except as necessary to perform services, permitted disclosures required by law or court order, and standard exceptions for information that is publicly available, independently developed, or already known. Specify the duration of confidentiality obligations, which typically extends beyond the agreement term.

Independent Contractor Relationship: Clearly establish that the Consultant is an independent contractor and not an employee, agent, or partner of the Client. Address the critical implications of this status by confirming that the Consultant is responsible for all tax withholdings and payments including self-employment taxes, is not entitled to employee benefits such as health insurance or retirement plans, maintains control over the manner and means of performing services, may engage subcontractors subject to Client approval, and is responsible for their own business expenses, insurance, and licenses. Reference IRS guidelines and relevant state law factors that distinguish independent contractors from employees to ensure the classification withstands regulatory scrutiny.

Intellectual Property and Work Product: Clearly allocate ownership of all work product, deliverables, and intellectual property created during the engagement. The standard approach assigns all work product to the Client as "work made for hire" or through explicit assignment, with the Consultant retaining ownership of pre-existing materials and general methodologies. Include provisions for the Consultant's use of work samples for portfolio purposes with Client consent, and address any background intellectual property that the Consultant brings to the engagement with appropriate licenses granted to the Client.

Representations, Warranties, and Covenants: Include mutual representations that each party has full authority to enter the agreement, that performance will not violate other agreements or third-party rights, and that services will be performed in a professional and workmanlike manner consistent with industry standards. The Consultant should warrant that deliverables will not infringe third-party intellectual property rights and will comply with applicable laws and regulations. Consider including a warranty disclaimer for any implied warranties beyond those expressly stated.

Indemnification: Establish reciprocal indemnification obligations where each party agrees to defend, indemnify, and hold harmless the other party from claims arising from their breach of the agreement, negligence, willful misconduct, or infringement of third-party rights. Specify the procedures for indemnification including prompt notice of claims, cooperation in defense, and control over settlement negotiations. Consider whether to include limitations on indemnity such as excluding indirect or consequential damages.

Limitation of Liability: Address whether to include caps on each party's total liability under the agreement, typically tied to fees paid or a specific dollar amount, and exclude liability for consequential, incidental, or punitive damages except for certain carve-outs such as confidentiality breaches, intellectual property infringement, or indemnification obligations.

Insurance Requirements: Specify any insurance coverage the Consultant must maintain, such as professional liability (errors and omissions) insurance, general liability insurance, and cyber liability insurance if handling sensitive data, with minimum coverage amounts and requirements to name the Client as additional insured or certificate holder.

Governing Law and Dispute Resolution: Designate the governing law (typically the state where the Client is located or where services are primarily performed) and specify the exclusive venue for any litigation. Consider including alternative dispute resolution provisions such as mandatory mediation before litigation or binding arbitration under specified rules (AAA, JAMS), and address whether the prevailing party in any dispute is entitled to recover attorneys' fees and costs.

General Provisions: Include standard boilerplate clauses such as severability (if any provision is invalid, the remainder continues in effect), entire agreement (this document supersedes all prior agreements and understandings), amendment procedures (modifications must be in writing signed by both parties), assignment restrictions (typically prohibiting assignment without consent), notice provisions specifying addresses and methods for formal communications, waiver (failure to enforce a provision doesn't waive future enforcement), force majeure (excusing performance for events beyond reasonable control), and counterpart execution (allowing signing in multiple copies).

Execution Requirements: Provide appropriate signature blocks for authorized representatives of both parties, including printed names, titles, and dates. If the agreement involves real property or requires notarization under state law, include notary acknowledgment blocks. For corporate entities, ensure signatories have proper authority and consider whether corporate resolutions or certificates of authority are needed.

Research and Verification Standards

Throughout the drafting process, verify all legal standards and best practices by consulting authoritative sources. When researching specific legal requirements such as independent contractor classification factors, payment term regulations, or enforceability of restrictive covenants, prioritize official government sources (IRS, Department of Labor, state agencies), state bar association guidance, and established legal treatises. Cross-reference multiple sources to ensure accuracy and current applicability of legal principles.

For jurisdiction-specific requirements such as choice of law enforceability, arbitration agreement validity, or non-compete restrictions, research the specific state law that will govern the agreement. Identify any mandatory provisions required by state law or industry-specific regulations that apply to the consulting services being provided.

Final Document Assembly

Once all necessary information has been gathered and verified, create a polished, professionally formatted Consulting Services Agreement that integrates all researched provisions with the specific deal terms. The document should use clear, precise legal language while remaining accessible to business professionals. Organize the content logically with numbered sections and subsections, use defined terms consistently throughout, and ensure internal cross-references are accurate. Include a table of contents if the agreement exceeds five pages, and attach any referenced exhibits such as scope of work descriptions, fee schedules, or confidentiality acknowledgments.

The final agreement should be comprehensive enough to address foreseeable issues and disputes while remaining practical and business-friendly. Every provision should serve a clear purpose in allocating rights, responsibilities, and risks between the parties in a manner that reflects their negotiated business arrangement and protects their legitimate interests.