This article was first published in the March 2019 edition of SA Coaching News.
I am sure you have heard the story of the 2 rules: the first is I am always right, the second being, if I am wrong, then revert to rule 1. This can be applied to coaching projects, where rule 1 is that there will always be scope creep, and the second rule is that there will always be learning along the way, which inevitably brings us back to rule 1. The question we all need to answer, is “How do you minimise rule 1?”
This is why we enter into contracts, in business in general, and in the field of coaching. As a coach, the objective is to enable optimal learning for your client at the best possible return for your time (which includes time you spend outside of the coaching relationship preparing for, or reviewing the coaching session). A coaching intervention has a life, and as the coach you want to add the maximum value to your client within the contracted time, so you can’t afford to be side tracked in any way.
Coaching has evolved into a mainstream industry and profession, and coaches will be increasingly held to the highest standards by their clients, client sponsors and professional bodies. So, to be successful and maintain demand, you need to be focused on delivery against the defined objectives and outcomes of the coaching relationship, and to be prepared to manage situations where the temptation arises to digress. The contract is a means of doing just that: it creates the boundaries, defines the scope and stipulates the life of the intervention.
There are different levels of contract depending on who you are contracting with, and you may be asked by a Client or Sponsor to sign their companies’ contract. When using the client’s contract, ensure the contract is balanced and equitable for both parties. Don’t forget that you have every right to have someone in the legal profession scrutinise a client or sponsor’s contract before you sign it. You have developed your coaching model over a period of time, and you use it to earn your living, so protect your intellectual property.
A point to keep in mind is practicality and balance in creating the coaching contract, and there are definitely differences between contracting with businesses and with individuals. As an example, a contract for life coaching will probably be far more compact than a commercial contract with a sponsor or organization.
In a “tripartite” contract situation, where there is a sponsor and a coachee involved, the sponsor contract and coachee contract may differ slightly in length and in the attention that it pays to different parts the contract. For example, the coachee contract may not include details of the coaching fee or payment terms.
Contracts don’t always need to be written either. Verbal contracts are also legally valid, provided they are covered by the regulatory umbrella including the Constitution of the Republic of South Africa, the POPI Act and Consumer Protection Act, and meet the requisite elements. In fact, in South African law, the only time that contracts must be in writing is for the purchase of land or buildings! However, that isn’t an excuse not to have a coaching contract, and you will find – with experience – that a good contract will be a valuable foundation to a great coaching relationship.
There are 6 standard requisite elements that must be established to demonstrate the formation of a legally binding contract, and it is good practice to turn each of these elements into a question that needs to be answered each time we contract with a client. The elements are:
- Mutuality of obligation
- Competency and capacity
- Certain circumstances, a written instrument.
In any contract there is a commercial aspect and a normative aspect. Contracting with a sponsor or organization could include a detailed commercial contract, focusing on the business aspects, including methodologies, deliverables, cost, and guarantees and you need to ensure that it is well balanced in the interests of all parties, and provides opportunities and guarantees for ensuring the best environment for success of the intervention.
Contracting with the client within the organization or as a private client is normally done as part of an introductory session led by yourself. When you and the client have agreed, this can be signed as a formal document or it can be verbal. As a precaution, when I enter into a verbal contract, I will follow up with a written summation of the conversation highlighting the salient points of the contractual agreement. The terms of the contract must be clear so that each party knows what they are committing to.
Some of the sections that should be addressed by your coaching contract (both with the sponsor organisation and with the coachee) are:
What is coaching? Clearly explain what coaching is and how it differs from mentoring, counselling and psychotherapy.
- Coaching model/approach: include an explanation of your particular approach and way of working with clients. This section can also include an explanation of the variety of coaching models, philosophies and frameworks that you may choose to use, as well as details of your training and experience as a coach.
- Clarifying responsibilities and expectations of different parties (coach, coachee, sponsor), which could include the responsibility of the coachee to apply the learning and insights from a coaching conversation, who will be responsible for reporting back to the sponsor and what format the report will take, how feedback will be done by coach, coachee and the sponsor and when feedback or reviews will take place.
It is also important to clarify the responsibilities of the sponsor to support the coachee in their journey. If the organisation wants change, it has to open the doors for change to happen and this needs to be written into the contract.
Also, you need to include a performance clause in the contract to protect you, and allow you to terminate the contract though lack of commitment on the part of the client and/or coachee. Remember that you don’t have to stay in a coaching relationship if the other party doesn’t play their part.
- Defined outcomes, objectives and goals. It is important to ensure that the sponsor’s outcomes, objectives and goals are realistic and aligned to the coachee’s outcomes, objectives and goals. This is probably the most critical area of the coaching contract, and the area which needs the most detail, examination, reflection and attention, as it is here that the coaching process can be derailed by scope creep or by one of the parties not supporting the other’s outcomes, objectives and goals.
- Confidentiality and what can be shared, and how: this is particularly important when you are working in a sponsored situation (where someone other than the coachee is paying for the coaching) or when working with different members of a team or group in an organisation.
- What is confidential?
- What is not confidential?
- Under what circumstances will you break confidentiality (for example, if you become aware of illegal activities, activities that will compromise the sponsor in any way or if the coachee makes you aware that they – or someone they know – intend causing self-harm or harming others).
- If a circumstance arises where you are required to break the confidentiality of the coaching relationship, agree on how you will handle it. For example, if the coachee shares that they were paid a bribe in order to award a contract to a service-provider, will you give the coachee an opportunity to report this internally to the relevant authorities, and will you impose a set timeframe for this to happen?
- Ethical code: coaches who are members of a professional coaching body are required to conduct themselves in accordance with a code of professional ethics and conduct. Many coaches will supply a copy of their professional code of ethics to their clients, or at least explain what is contained in the code and how it affects the client.
- Complaints: this is linked to the point above, but it is important to outline how, where and when complaints will be handled. It is also important at this stage to ensure that the client knows that the first stage of most formal complaint procedures with coaching professional bodies it to encourage stakeholder engagement before the relationship deteriorates to a point where a complaint is laid.
- Duration: number, length and regularity of sessions. This section may also refer to things like transport and accommodation if the coach or client has to commute. Additionally, if coach, client and coachee are not based in the same town or country, this section of the contract might outline alternatives to face-to-face meetings like telephonic, Zoom or Skype, what proportion of the coaching intervention will consist of online coaching, and how these will be handled.
It may be a good idea to also agree on where coaching will take place (inside or outside of the work environment) and who will be responsible for ensuring that a suitable venue is available. If the session is cancelled by either party, you may also want to detail who will take responsibility for re-scheduling and for securing the venue for the new coaching session.
- Evaluation, tracking and monitoring (coach, coachee, sponsor): the coach may want to include a variety of pre- and post-coaching assessments and scorecards to measure the effectiveness of the coaching intervention. It is also important to build in regular progress reviews and updates, who will be involved, how they will take place and when. When the objectives, outcomes and goals of the coaching intervention are established, milestones should also be identified if possible so that progress can be tracked.
If the client requires you to submit reports on the coaching process, agree with all parties on what needs to be reported, and what will remain confidential. You might also want to discuss who creates and submits these reports, and who gets to see them: if the coach is responsible for the reports, does the coachee get to see and discuss the contents before they are submitted?
Record-keeping, feedback and review: explain what records you keep as the coach, and what you may share (for example, if you become professionally credentialed, you may need to provide details of the number of hours you have coached with client contact details for verification).
You also need to agree on who will take, make and keep notes of the sessions and whether or not these will be shared, and with whom and what kind of review or reflection will take place outside of the coaching session.
One of the key success factors in a coaching relationship is an effective, two-way feedback process. This means that the coachee feels safe giving the coach feedback on what they may need from the coach, and also that the coach is able to give the coachee constructive feedback without the coachee feeling judged or alienated.
- Costs and payment terms: this is pretty self-explanatory but you may want to include a clause to address a situation where payment is not made as agreed. Let’s use an example where you, the coach, book and pay for your own airfare, relying on receiving payment from the client by a certain date in order not to be charged interest on your credit card or bank penalties. If the client doesn’t pay on the agreed date, who will bear these costs?
Some coaches charge a percentage of their contract fee up front to cover hard costs like airfare and accommodation. If you include assessments in your coaching approach, you will also need to cover the costs associated with these, and may choose to invoice them as a separate item.
- Breach of contract: legally, there are 4 major types of breach of contract:
- Late performance, in other words if the coachee agrees in the coaching contract to implement agreed actions between one coaching session and the next, and doesn’t do so habitually, you can invoke this clause. This, however, relies on coach and coachee having agreed to a specific timeframe.
- Incomplete or unsatisfactory performance: this happens when the coachee does what they agree to do, but does so in a sloppy, half-hearted way that compromises the effectiveness of the outcome.
- Improperly refusing to comply with the contract: imagine a situation where you are coaching in an organisation and it comes to getting your invoice paid, and the sponsors in Finance or HR with-hold payment despite the payment terms outlined in the contract and despite the milestones having been met?
- Preventing performance: often, in the workplace, a coachees’ performance will depend on the performance of the people around them. For example, if a coachee designs an action in the coaching session and their immediate superior prevents them from implementing the agreed action, the environment is not supportive of what the coaching agreement has set out.
- Cancellations, cancellation periods and cancellation fees: it is important that you detail how a contract may be cancelled (from both parties’ perspectives), and how long a cancellation period needs to be under what circumstances. If a client cancels the contract before completion due to a change in circumstances (let’s say that the company is down-sizing and retrenching), do you build in cancellation fees or penalties to ensure that you are not suddenly left with a huge hole in your income?
- Termination process: the contract must cover a specific period and not be open ended, at the end of the contract, should the client wish to continue, you can enter into another contract. Again, this must have a finite life because it allows you to plan the intervention and follow a concise plan from beginning to end.
We never know what life will throw in our path, and so we need to ensure that our contracts will cover what will happen in the case of early termination as well as what will happen when the full contractual period ends. What plans will you and your coachee co-create to make sure that the effects of the coaching are sustained and the coachee doesn’t backtrack? Will you maintain contact on a regular basis and check in with each other? Does the coachee create their own developmental path that will continue after the coaching relationship ends?
Having said all this about the importance of contracts, we must understand that relationships govern how we conduct our business and they develop over time as we establish ourselves and earn the trust of the client. This applies to contracting to an organization or with an individual, and the contract itself only becomes necessary when the Client / Service provider relationship breaks down irreparably. I use the word irreparably with caution, because there is a lot that can be done before it reaches this level. The extent of this window depends entirely on the level and depth of the relationship.
We also need to bear in mind that each coaching session will have a form of a contract in terms of contracting with the coachee about what you will be covering in the individual session and what the coachee wishes to achieve as a result of the session. When contracting for each session, make sure that it is in alignment with the overall coaching contract, and if it’s not, you may need to re-contract.
Contracts are not set in stone. If, during the course of the coaching relationship, you find that the original objectives, outcomes or goals become meaningless (and this may be due to outside forces beyond your control and which were not foreseen at the outset of the coaching relationship), it is perfectly okay to agree to re-contract but make sure that you get agreement from all of the stakeholders.
For example, the sponsor organisation may restructure as a result of changes to the economy, and you may be required to work with your client on exploring alternative means of earning a living. Or a coachee’s personal circumstances may change: they may become an expectant parent, lose a loved one or go through a divorce. These are all major changes that will naturally impact the original coaching agreement and contract. What is important is that you – the coach – are alert to these changes and that you ensure that the coaching contract is amended to accommodate them.
Good contracts make for a good foundation, and good coaches keep fine-tuning and improving their contracts to keep up with the times and with changes in their clients’ circumstances. Here are some great reads on coaching contracts:
http://www.metasysteme-coaching.eu/english/toolbox-iii-client-agreement-skills-in-coaching/ – very comprehensive and some nice ideas about the main contract and sub-contracts eg session contracts, triangular contracts (third party contracts)
https://www.juliehay.org/uploads/1/2/2/9/12294841/coaching_contract_set_up_idta_news_jun_2011.pdf – nice way of breaking up contracting into procedural, professional, psychological – has some very good questions
https://www.thepositiveencourager.global/establishing-a-coaching-contract/ – some nice ideas for prep work for the client to do so that the contract is explicit and both parties are clear on outcomes and expectations.
This article was Co-Authored by Megan Hudson of SA Coaching News and Dave Hudson.