AMA: Contracts

⏰ Today in 5 minutes or less:

• Use contract terms and language to reinforce your value, professionalism, and agility.

• Structure your payment terms around the outcomes you deliver, not your hours.

• Protect yourself with specialty clauses that hold up.

• Know when (and when not) to call an attorney.

❓Ask Me Anything: Contracts That Reinforce and Protect Your Value

We’re back with another more questions from indie consultants.

This one is about drawing the line around your time, value, and working relationships using contracts.

Q: Can I protect myself from a client terminating an agreement? Should I include a ‘kill fee’ for early termination?

A: I know other people do this because they believe in getting paid for the work they did. But actually, I don’t believe you should include a kill fee in your contract. 

First, I think showing your flexibility and agility to changing situations is part of your value. As an alternative, we run a 15-day termination period at Keenan Reid. I also make sure to talk about the flexibility we offer during the sales process. 

Second, you need to accept as an indie, part of not having a full-time job means having to absorb some sort of risk. And for me, this is one of those risks that I’m willing to absorb. 

Lastly, this clause is rarely ever used. At KRS, we only experience early termination in extreme budget situations on the client’s side. In those cases, I still would have cancelled the fee because maintaining the relationship is far more valuable than the costs.

Q: How should I handle time off or vacation if I’m working on a retainer contract?

A: If you have a good working relationship with your clients, then they will also support you in taking care of yourself. And there are a couple of ways to do this.

One, it’s a good idea to include a maximum number of working days or hours in your retainer contract. This way, you can still make up that time in case you take planned or unplanned vacations. 

Another option is to bake some time off allocation into the contract. This is the best option if you have a retainer contract that requires you to be full-time. For example, I would include the time off a number of unpaid days per year or per quarter. I would also state that I’m required to provide notice of those vacation days in advance.

Q: How can I set limits of rework and client approval process — in terms of contractual language and successful onboarding?

A: This is a contract clause you need to watch out the most if you’re a marketing services provider.

It’s not something we regularly do at Keenan Reid, but from what I’ve seen from others — they typically provide up to three (3) reworks. For any subsequent revision, they can charge a separate hourly rate or a fixed rate for every extra revision.

What other questions about indie consulting do you have?

Send me an email at [email protected] and we’ll feature them in the next one.

Responsible AI Use with Usman Lakhani

AI is changing the game. But without the right governance, it’s a ticking time bomb. 

That’s why I was excited to chat with Usman Lakhani – expert in AI governance with over 20 years of experience in IT strategy and data ethics. 

As an advisor at Info-Tech Research Group, Usman helps companies minimize AI risks and ensure responsible tech use. 

In this interview, he shares actionable insights on how consultants (and anyone who uses AI, really) can navigate the complexities of AI governance – ensuring it’s both powerful and ethical. 

Check out the full podcast episode here:

Let's start with the basics. What is AI governance? 

Usman: Governance, in general, is about making sure no one can point a finger at you and say you were irresponsible – whether that’s with how you use someone’s data or how your AI models behave. It’s about minimizing reputational risk and avoiding harm. 

 Now, AI governance specifically is a bit trickier because AI is evolving so fast. In simple terms, AI governance means that for every product, service, or interaction where AI plays a role – either as the main driver or a supporting tool – we need to make sure it’s safe, responsible, and doesn’t create future problems. 

It’s a continuous process. As AI changes, our governance practices have to evolve too. 

Think of it like an old email rule: if you wouldn’t want it on the front page of the Wall Street Journal, don’t put it in an email. 

The same principle applies to AI – you have to assume anything you create or digitize could be absorbed and scaled by an AI system. 

What happens when AI goes wrong? Especially if governance isn’t considered or gets ignored? 

Usman: First and foremost, it leads to a breakdown of trust – and trust is the cornerstone of any business relationship. Once you lose it, it's incredibly hard to get back. 

For example, here in Ontario, there was a healthcare data breach that resulted in very personal information being sent to the wrong people. It triggered huge reputational damage for the Ministry of Health and brought in the privacy commissioner. 

Now, with AI, mistakes don't just stay contained. They get amplified. If bias or bad data makes it into the system, it compounds decision after decision after decision. 

And because AI decisions can be opaque – you don’t always see what data fed the model – it becomes much harder to course correct once things go wrong. 

In the old world, you could go back to the root and fix the problem. In the AI world, each bad decision just accelerates once the train leaves the station. 

That’s why AI governance isn’t a luxury; it’s a necessity. 

Small errors – just 1% off here and there – compound over time into big problems. 

How can independent consultants like us help clients overcome these challenges? And how should clients themselves start thinking about this? 

Usman: The biggest thing we can offer is literacy. Most people outside of tech hear words like "responsible AI" or "model bias" and immediately feel intimidated. 

Part of our job is breaking that jargon down into plain language. Governance doesn’t have to sound scary – it’s about protecting data privacy, ensuring fairness, and being accountable. 

There are already frameworks available to give you a checklist of principles – like fairness, transparency, and safety. You can apply these based on your client's specific needs. 

You don’t have to apply everything at once. The real trick is to prioritize and focus on the handful of governance principles that matter most to that client right now. 

Start small and build up over time. Eventually, you can get them to a place where their approach is fully compliant and durable. 

And for clients, it’s important to realize that this isn’t just a technical exercise – it’s about trust, brand reputation, and responsible growth. If they think of governance as a strategic advantage rather than a regulatory burden, they’ll be much more successful with AI in the long run. 

What We Can Learn from Usman Lakhani: 

1. AI governance is the next strategic opportunity. Even if you’re not an AI expert, it helps to start advising clients on responsible AI use. Familiarize yourself with frameworks like the NIST to help them minimize risks and build trust. 

2. Automating bad decisions amplifies risks. Before automating a process, make sure that it’s not a flawed one first. Work with clients to optimize and test models regularly, ensuring that decisions are still aligned with goals and AI doesn’t amplify bad outcomes. 

3. Avoid AI hype; understand what really adds value. AI isn’t a one-size-fits-all solution. For every business problem, consultants must help in critically assessing whether AI is the right fit or if other tools can do the job more efficiently. This saves time, money, and frustration for everyone. 

⭐️ The answer is 45 handshakes. Each handshake is between two people, and each pair shakes once. The formula would be: n(n-1)/2, where n = number of employees.

🤔 Did you get it right?

Remember, the path to success is paved with continuous learning and embracing fresh perspectives.

Let's stay connected, share ideas, and elevate your consulting business.

Stay curious, friends.

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