Legal matters matter

Legal matters matter

shaking hands

28 February 2023

Mike Taylor introduces the updated EMCC UK commercial coaching agreement, which is available for all our members to use in contracting with their clients and suppliers. Find the agreement on our Commercial contracting page.

Let’s start with a question for experienced coaches, mentors and their organisational clients: How many of us discuss the legal aspects, or the risks we run, when agreeing how we’ll work together? The answer is very few. Yet both parties run significant commercial risks which could have a material impact on business success. Legal matters.

An updated and enhanced agreement

In 2011, legal contracting was a gap in setting standards and professionalising the coaching and mentoring industry. The industry standard legal agreement created by EMCC back then closed that gap and simplified legal discussions for both parties’ benefit at the outset of new relationships.

Twelve years later, 2023 sees an updated and enhanced agreement. It includes recent legislative changes, such as handling personal data and bribery law; and for the first time, consulting services are included for coaches and mentors who have a multi-service customer proposition.

Why does the market need an industry standard agreement?

The agreement is designed for buyers and sellers of coaching, mentoring and consulting services, who are in business-to-business assignments. It is for buyers who are organisational customers (rather than individual coachees), and sellers who are coaching companies, partnerships, or individual coaches. The agreement reduces risks and brings clarity in key commercial issues.

Some organisations and coach/mentors have fit-for-purpose contracts that work effectively for both parties, but these are few and far between. Common market practice often lies at one of two extremes, which we’ll look at in turn:

• No written contract
• Long (25 pages plus) ‘standard supplier agreements’ mandated by procurement departments

No written contract

If there is no written contract, an implied contract still exists, and what has been agreed orally forms the basis of a contract. I’ve heard coaches say that this is acceptable, as they’ve never had a problem. But the absence of a written document means that key risks can go uncovered, while other risks can be subject to misunderstanding (or worse), with unexpected consequences.

I’ve had a case of a customer whose key budget holder changed, and the new person refused to pay coaching invoices. Coaches with no written agreement suffered, while those with one didn’t.

Examples of key risks

For the coach or mentor:

What will be the payment terms, and the consequences of late payment?
Who owns the know-how (intellectual property) which coaches and mentors bring?
Critically, what’s the maximum I might have to pay if the client decides to sue me?

For the organisational client:

What is confidential information, and the consequence of a confidentiality breach?
Who owns any written materials we pay for?
How can we be assured that the coach or mentor has the skills, expertise and experience needed, and is operating to best-in-class standards?

Standard supplier agreements

A long ‘standard supplier agreement’ can include terms and conditions which don’t reflect the nature of the service being provided or sought. Procurement departments prefer similar contracts to keep their portfolio of agreements standardised. But an agreement designed for IT services, for example, will be very different to an agreement for coaching or mentoring. I’ve seen several cases of a sledgehammer that missed the nut, with very one-sided and onerous conditions for the seller.

Making legal matters easier to discuss

Legal formalities are unfamiliar for many coaches and mentors. Discussions about agreements can feel uncomfortable as they can imply a lack of trust at the outset of building the coaching or mentoring relationship.

Perhaps surprisingly, legal matters also conjure the same feelings for many HR and L&D professionals who are inexperienced and untrained in commercial documentation. Even when procurement departments are involved, they may be unfamiliar with coaching and mentoring services. Yet legal topics can and should be addressed simply up front, setting a strong foundation for mutual future success.

Having a market standard document makes that much easier to do. Complex legal points have already been negotiated by market practitioners and client representatives, leaving users free simply to personalise the document for their own use.

Who created the industry standard agreement?

EMCC UK led the initial and updating project, together with legal advice and support generously provided by City law firm Osborne Clarke; and the roles of buyer and seller were covered separately by experienced senior practitioners.

Much debate and challenge within the project team recognised the nature of the coaching and mentoring service. All acknowledged that a balanced agreement which works for buyer and seller was critical to the document’s ultimate acceptance in the market.

A market test gathered the views of coaches, clients and other interested parties. Market feedback also confirmed that the agreement is much appreciated by the industry. Several large private and public sector organisational clients have been using it since 2011.

The agreement is available free to EMCC members as a benefit of membership.

The agreement and how to use it

The standard agreement is available here. Frequently asked questions and a ‘How to Use’ note are also provided, and include a comprehensive, easy-to-read commentary for each clause in the agreement.

The agreement contains clauses on all the key risks identified above. It also includes clauses covering key operational matters, including information security, handling personal data, short-notice cancellation fees, and the usual standard legal terms and conditions.

Even if the customer insists on using their standard agreement, the EMCC standard agreement’s clauses provide alternative wording to compare and use in negotiation. Don’t accept some buyers’ lazy argument of ‘other coaches have already signed this’! Both parties have the right to re-negotiate any clause they wish.

Three versions of the standard agreement are available, one for each of the different structures a coach or mentor might be working under:

• A coaching company
• Coaches or mentors working in formal partnership
• Independent coaches or mentors

A separate multi-services agreement has also been produced, using the same format and structure for each of the three organisational structures.

In summary

The market standard commercial coaching agreement reduces risks for all parties. It makes it easier for both parties to discuss legal and commercial issues at the outset of a new relationships, and adds to the professionalism of your business.

The FAQs provide a comprehensive explanation for every clause in the agreement. It can be shared with buyers and sellers alike.

The agreement is market tested and balanced, having been prepared for the benefit of all parties. It is ready to be tailored for any coaching, mentoring or consulting assignment, or to compare with and negotiate customers’ proposed agreements.

Many customers are thrilled it works for them. Because it reduces the often unspoken risks on key topics, the agreement will provide solid foundations for commercial success and better business for all.

We encourage EMCC members to add it to their usual new customer or supplier set-up practice.

Mike Taylor is an award-winning mentor, coach and business advisor. He brings 15 years’ prior experience in board and senior executive roles in international organisations, including leading negotiations on many commercial legal agreements. He is a former board and advisory board member of EMCC in UK.

Contact Mike Taylor here: [email protected]

Image by Cytonn Photography on Unsplash