Consulting agreements between academics and industry provide opportunities for enrichment in every sense of the word – both academically and financially. It is important however that the academic consultant take the time to carefully read and understand the agreement they are being asked to sign, and to ensure that it is consistent with their institution’s policies.
Beware of agreements which transfer all rights to all your future IP to the company. Negotiate to remove the clause. Beware of overly restrictive non-compete clauses, which prevent the academic from consulting for anyone else, even after the consulting contract has been terminated. Be aware of the terms of any stock option plan: make sure they are clear and reflect your understanding of the plan. Clarify any ambiguities, and ask for changes. For example, negotiate for registration rights and acceleration rights, and ensure that all plans are structured to minimize tax consequences (and that the proper elections are made).
Finally, academics should make sure the contract correctly reflects the relationship.
Ask questions and negotiate for what is important to you. Be aware of your institution’s policies and do not violate them. Protect your academic rights. Limit the transfer of IP to that developed during the term of the consulting agreement, and obtain good professional advice if any areas of difficulty remain.
- Academics entering into consulting agreements should get good legal advice, and make sure that their agreements are consistent with the policies of their institution.
– – –
This article is provided for informational purposes only and does not create a lawyer-client relationship with the reader. It is not legal advice and should not be regarded as such. Any reliance on the information is solely at the reader’s own risk. Clausehound.com is a legal tool geared towards entrepreneurs, early-stage businesses and small businesses alike to help draft legal documents to make businesses more productive. Clausehound offers a $10 per month DIY Legal Library which hosts tens of thousands of legal clauses, contracts, articles, lawyer commentaries and instructional videos. Find Clausehound.com where you see this logo.