According to Michael Lasky, partner with Davis & Glibert LLP, there are 12 rules agency executives should follow to ensure win-win agreements with their clients:
1. Write a “dear new client” letter. “This is the ‘authorization to proceed letter,’” Lasky says.
2. Know your client. “Who is the financially responsible entity? Who at the client has authority? Is security necessary?”
3. Develop clear compensation standards. See main article text.
4. Determine the length of your contract. Should address term, renewal, early kill protection, notice of termination and payment during the notice period.
5. State your payment terms. “Does the agency have the option of charging a finance charge or suspending work for invoices remaining unpaid for more than 60 days?”
6. Avoid unpaid invoices. “Get the client to acknowledge ‘amounts due’ and ‘amounts owing.’”
7. Understand indemnification. “Strong indemnity is needed for investor relations, product launches and contests,” Lasky says. “Make sure that the client’s indemnity covers expenses incurred by agency in connection with any subpoena, discovery demand or similar directive served upon agency relating to litigation involving client and a third party.”
8. Follow a document retention policy. “Think Enron. ”
9. Be slow to grant exclusivity. “Limit personnel that are subject to exclusivity according to office, account team or service.”
10. Be sure who owns the work. “The agency should own the work unless and until the client pays up.”
11. Protect your people. “Get a recruitment fee if your client hires an employee or freelancer, and scale it to the employee’s compensation,” Lasky says. “Enforce this practice even after the assignment ends, and offer the client reciprocal protection.”
12. Ink the deal. “Give someone other than the key client contact responsibility for getting the agreement signed.”