Client Confidentiality Agreements



Prior to the start of consulting work, your client will usually request that you sign a letter of confidentiality or a non-disclosure agreement. This is a document that an organization uses to state that employees or parties who are doing business with the company are required to keep private information confidential. A confidentiality agreement is typically customized for the individual and may include the name and address of both parties, their signatures and the date. The consultant should treat this as a legal agreement.

Why do businesses request a confidentiality agreement?

Business owners and their representatives need to know that a consultant has their best interests at heart. They want to know the consultant will never reveal business secrets gleaned through observations and conversations or by seeing documents and data. In fact, businesses are usually advised to request letters of confidentiality even when a consulting contract covers just a short time span. It’s considered good practice and good protection.

What types of information might be revealed?

If you’re new to consulting, you’ll find that organizations may need to reveal their inner most secrets to a consultant in order to get the job done. This could include financial information, trade secrets and internal personnel issues. In fact, managers may reveal more than is necessary to a consultant, enjoying a sympathetic ear from someone who is outside of the company’s politics.

Do businesses trust consultants?

There’s no one answer to whether businesses trust a consultant, but some do have the misconception or fear that consultants can’t be trusted and are likely to reveal company secrets. Because most consultants are trying to retain their clients and to get referrals, it is unlikely they will reveal confidential information. They may, however, inadvertently mention something to someone else in the course of a conversation. Businesses believe that signing a letter of confidentiality will help the consultant remember to be tight-lipped.

What about conflicts of interest?

During the interview stage, some businesses may ask if you will continue to work for their competitors. This is a tricky question and you should think long and hard about the best answer. You may find that it’s appropriate to tell your potential client that although you work for competitors, their business needs are unique and that you tend to individualize the advice and work that you perform for each company. Therefore, it really isn’t a conflict of interest.

On the other hand, if the contract is long and lucrative, or if the client is very important to your business, you may decide to agree that you won’t work for competitors. Whichever approach you take, stick to your word so that you can build a trusting relationship.

Should you sign a confidentiality agreement?

You may find that signing a confidentiality agreement is a condition of doing business with a particular organization. If you have hesitations, however, you may want to bring the letter to a lawyer to ensure your interests are also protected. By doing this, you can make sure the confidentiality letter is a fair and legal agreement for all concerned.


Comments

  1. Jenny Sutton says:

    It is right that clients should expect the consultant to keep information they are provided as confidential.
    But what I am often puzzled by is the fact that their own employees do not have the same confidentiality obligation – in fact I have often employees disclosing information to third parties or socially that I am sure their companies would be shocked to hear being publicly discussed.

  2. Felicity says:

    Thanks for your comment, Jenny. I’ve heard that some employers require confidentiality agreements, but don’t think I’ve seen it. It does seem to be an oversight. Perhaps it’s difficult to enforce?

  3. Mike says:

    I have the opportunity to do some consulting work, but the client wants me to agree to not even disclose that I’m working with them (or have worked with them). It’s a very interesting project that pays well, but if I can’t disclose what I was doing it just creates a large gap on my resume.

    Has anyone else experienced this? Any advice?

  4. That’s a tough position to be in, Mike, but I think there’s a way around it. On your resume, you would state your employment as working for a client in the industry in which this client resides. Then you speak about it in very general terms.

    Example: Confidential client in Pharmaceutical Industry. Performed analysis, created plan and implemented a project for training global sales representatives.

    (just off the top of my head) Hope this helps. I often do proprietary work that I can’t show to clients, so I just speak about it in general terms. They respect the fact that I won’t tell any one else about their confidential information.

  5. Mike says:

    Thanks, Felicty. That’s great advice.

  6. Lew Sauder says:

    Excellent advice. In addition to protecting confidential information from competitors, I also advise consultants to avoid sharing information with their spouses or friends in casual conversation. You never know where it will be repeated and come back to haunt you. As for content, I use the rule of thumb that it can be shared if it is found on the client’s Web site or in their commercials.
    Lew Sauder, Author, Consulting 101: 101 Tips For Success in Consulting

  7. Felicity Thinks says:

    Excellent points, Lew. Thanks for contributing.

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