Consultancy Agreement Template for Consultancy Businesses (UK 2026)

Consultancy AgreementConsultancy

Last updated: February 2025

Why Consultancy Businesses Need a Consultancy Agreement

Consultancy-to-consultancy agreements govern the engagement of specialist or associate consultants by a consulting firm to deliver client work. These are distinct from freelancer contracts because the associate operates at a strategic level and may represent the firm to clients. The agreement must address how the associate presents to clients, billing arrangements between the firm and associate, shared professional liability, and the critical non-solicitation provisions preventing the associate from developing direct relationships with the firm's clients.

Key Clauses for Consultancy

  • Associate representation and client-facing conduct requirements
  • Billing arrangements covering firm rate versus associate rate
  • Shared professional liability and PI insurance requirements
  • Non-solicitation of clients and non-competition provisions

Common Mistakes

  • Not clearly defining the relationship as consultancy-to-consultancy rather than employment, risking IR35 classification
  • Failing to include robust client non-solicitation provisions appropriate to the strategic nature of the associate's client exposure

Template Sections

  • Associate representation and conduct guidelines
  • Billing and payment arrangements
  • Non-solicitation and non-competition provisions

FAQ

How do I ensure a consultancy associate arrangement is not caught by IR35?

The arrangement must demonstrate genuine self-employment indicators: the associate should have the right of substitution, control over how they deliver the work, bear some financial risk, provide their own PI insurance, and work for other clients. The agreement should reflect these indicators authentically rather than just including standard IR35 clauses, as HMRC looks at the substance of the arrangement.

How should a consulting firm protect client relationships when using associates?

Include robust non-solicitation clauses preventing the associate from directly approaching the firm's clients for a defined period of typically 12 months after the engagement. Require all client communication to go through the firm, prohibit the associate from providing contact details to clients, and include a liquidated damages clause for breaches. These provisions are generally enforceable if reasonable in scope.

Related Templates

Consultancy Agreement Template for Professional Services Businesses (UK 2026)

Freelancer Contract Template for Consultancy Businesses (UK 2026)

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This is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.

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