Many of my most successful consulting clients provide some form of professional service to very large companies. It might be technology consulting, public relations, digital media marketing, executive coaching, management consulting, sales training... well, you get the picture. Big companies need what smaller companies sell and they need lots of it these days. That's the good news.
The less good news is that the contracts keep getting more and more restrictive. Before long, I won't be surprised if one of my clients is asked to climb to the top of Mt. Washington at 2:00 a.m. in their pajamas, just to get the darned contract signed! Slight exaggeration, perhaps, but things are becoming ridiculous.
So, I was not surprised to see contracts being presented to my clients that include
a broad restriction on how the customer's name may be used [if at all]. And that's too bad.
All consultants are eager to tout the clients with whom they do business. It is a common, inexpensive marketing tool which tells the world how well-connected they are. It's a natural extension of providing services to the client and quite valuable.
Here is a sample of the type of dreaded restriction I am speaking of:
No Publicity. Consultant shall not disclose to third parties [including denial or confirmation thereof] the existence or terms of this Agreement, or the fact that BIG Client is purchasing or has purchased anything from Consultant, without BIG Client's prior written consent in each instance. Consultant further agrees not to advertise, reference, reproduce, or display BIG Client's name or any BIG Client's trademark without BIG Client's prior written consent in each instance.
So, how does this hamper your legitimate use of BIG Client's name? Well, if you agree to this kind of provision, without tailoring it, here is what you
cannot do [without BIG Client's prior written consent, in each instance]:
- add BIG Client's name to your web site as a client
- use BIG Client's name as a referral with a prospective client
- list BIG Client anywhere on your LinkedIn profile
- mention BIG Client in your client newsletter, not even to highlight them
How might you protect yourself and carve out some reasonable exceptions from this restriction? Two possibilities. First, carve out the services you are providing as an exception to this restriction. Second, ask the client for advance permission to list them and their logo on your web site:
No Publicity. Other than as required to provide the Services hereunder, Consultant shall not disclose to third parties [including denial or confirmation thereof] the existence or terms of this Agreement, or the fact that BIG Client is purchasing or has purchased anything from Consultant, without BIG Client's prior written consent in each instance. Consultant further agrees not to advertise, reference, reproduce, or display BIG Client's name or any BIG Client's trademark without BIG Client's prior written consent in each instance. BIG Client agrees that Consultant's listing of its name and logo on Consultant's web site for marketing purposes shall not constitute a violation of this provision.
Will BIG Client agree? If you don't ask, you'll never know.
Sometimes BIG Client will agree that you can list them at the successful conclusion of the engagement, a not unreasonable position to take. After all, they want to be sure you and they have concluded a mutually satisfactory relationship before they agree to exceptions from these kinds of restrictions.
Besides, the point is not what the carve out looks like. The point is that without a written exception in the contract, if you violate a restriction like this, BIG Client could hold you in breach of the contract, which has its consequences.
One final note.
As with your other contract obligations, make sure you track these restrictions. Be sure your employees know each contract's restrictions going forward and that they understand the importance of respecting them. I know it seems unnecessarily burdensome to build a spreadsheet to track contract obligations, but it is probably far less burdensome than responding to a client's demand letter after a violation.
Rear Admiral Grace Hopper may have said that "It's easier to ask forgiveness than it is to get permission"... but your lawyer wouldn't agree!
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