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Why starting work for a client without a contract, is like having sex without a condom!

We've won a client virtually and they want us to start working for them, but they don't want to sign a contract because of the uncertainty in the market at the moment. What should we do?

We’re obsessed with winning in the PR industry. It’s the adrenaline rush that we all seek. A new client klaxon within an agency is great for buzz and morale. Even sweeter when you’ve pitched against a rival and you’re mates with some of the people on the losing team, what with the banter that then ensues.

However, I’ve always cautioned against getting too carried away at that stage if the fee and contractual terms haven’t been agreed, as, according to the old proverb, ‘there’s many a slip ‘twixt the cup and the lip’.

I think that starting work for a client without a contract is a bit like having sex without a condom. It might be great, impulsive, last for ages and be the start of a beautiful thing, but there’s a plenty of risk involved. And I wouldn’t shout about it.

A contract, much like a condom, offers great protection. To both parties. Particularly re payment amounts and payment terms, the length of the relationship, intellectual property ownership, non-solicitation of staff, confidentiality etc. Entering into a contract is also a professional thing to do and is best practice. Could you imagine using a law or accountancy firm without a formal agreement?

A work around, perhaps, is to use a client budget approval form with extensive terms and conditions attached to it. Those terms and conditions should be a distilled version of the clauses that would normally be in a lengthier client/consultancy agreement. Getting a client to sign this is usually quicker and easier and affords probably enough protection for you to be comfortable with.

So, I would be concerned if a client didn’t want to sign a contract or, at the minimum, a budget approval form with adequate Ts and Cs. I’d be worried that the relationship wasn’t going to last very long and I’d be hesitant to even call it a win and get everyone at my agency over excited.

Written by Graham Goodkind who is a Dutch Uncle – a new type of non-exec business adviser – to several agencies in the marketing services sector, in addition to being founder and chairman of Frank.

If you have got a question for our agony (Dutch) uncle regarding any issue relating to the running, operations, business or financial aspect of a PR agency, either as an owner, manager or executive, then email and your question may be featured in a coming issue.

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