If you don’t have the signed scope of work or the master services agreement or money in your hand, you’re absolutely putting yourself in a position of weakness and you are likely to get taken advantage of.

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– Hey everybody, Drew McLellan here from Agency Management Institute, this week coming to you from beautiful and warm San Diego. We just wrapped up a webinar with Attorney Sharon Toerek, who is an amazing attorney who specializes in working with agencies, and she serves many AMI agencies and I am always grateful for her and her advice. But one of the questions that came up in the webinar, I get asked all the time, and so I answered it and then I asked Sharon to answer it. And the question was, we have a prospect who is raring to go and they want us to get started right away, but we can’t get them to sign the scope or the master services agreement, so should we get started? And the answer, the short answer is absolutely not. The longer answer is, look, I get that you want their business, I get that you want to work on the project, I get that maybe it’s a cashflow issue for you and you want to get going, but you’ve got to take hold of the leverage and the negotiating power that you have, and not give it away. And if you start that work before they’ve signed the documents, you are giving away your greatest leverage, and so absolutely do not start the work. Sharon added to my absolutely non-answer, that if you feel like you absolutely have to start it, should then, at the very least, get paid upfront. But if you don’t have the signed scope of work or the master services agreement or money in your hand, you’re absolutely putting yourself in a position of weakness and you are likely to get taken advantage of. And by the way, if this is a prospect and you can’t get them to sign the documents that you’re going to need them to sign every time you do work with them in terms of scope of work – obviously, you only need one master services agreement – then that tells you a lot about what they’re going to be like to work with. So don’t miss that red flag and don’t give up your power in negotiating by starting on the work. If they really want to get going and they’re really anxious for the work and anxious to work with you, they will at least negotiate with you the terms of the scope of work or the master services agreement. Maybe there’s something in there they don’t like. But if they’re not willing to talk to you about it and negotiate it out, they are not going to be a great client in the long term. And in the short term, you’re setting yourself up for a pretty big risk. Okay? Hopefully that was helpful. I will see you next week.

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