Regulatory Open Forum

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

Hello An,
There is a lot to be said about structuring a consulting agreement. I have two recommendations for you:
1. Give them a fixed offer for a regulatory strategy ("kick-off project") . It shouldn't take long and it will allow you the opportunity to see what they have and how far its developed.
2. Afterwards, charge them on an hourly basis. You can provide estimates on how long it would take but the project management is the responsibility of the project manager; not the RA consultant. 


Good luck.
Shimon 

P.S. I wouldn't mind chatting with you on the phone after you decide that you are really going to do it.
Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

Hi Ann,
Because it's difficult to forecast how an early-stage project will progress, I like to keep things simple and usually bill for hours worked, but If the client requires a cap on bills, they will be  alerted to allow them to extend the agreement.  This applies especially when the client requires an estimate on the number of hours required for each stage of a project For later stage projects,  you might  sometimes get a job where the number of hours can be accurately estimated, for example a technical report e.g. Quality Overall Summary.
Good luck with your new endeavour,
Steve


------------------------------
Steve Binysh
Acta Pharma Services Ltd
RUISLIP
United Kingdom
------------------------------

Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

I've worked several contracts and it has always been structured as an hourly contract in my experience (and remember to compensate for a higher tax rate for a self-employed business. I would absolutely discuss it with an accountant before agreeing on any figures. I went with an LLC, which wasn't too difficult to start on my own with a little legal help, and ultimately the taxes were better, but I wish I had known more about what I was in for before I jumped). I wouldn't want to go with a stipend per project, as there are too many unpredictable issues that can arise that might leave you working 60+ hours a week to complete it, without appropriate compensation. With regulations changing frequently, you want some wiggle room to allow for those changes that won't be at your expense when they are out of your control. You still want to discuss predicted milestones and have regular meetings with whomever you report to about status updates, new circumstances, delays, regulation changes, etc. In particular if they are a startup, they don't necessarily know exactly what directions they might take in the next coming months or years so it's best for all involved to have flexibility. Otherwise your contract will need to be regularly updated to include new projects that will likely come your way. Best of luck to you!

------------------------------
Kimberly Leffert
Ballwin MO
United States
------------------------------

Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

I bill an hourly rate and specify a maximum number of hours I can bill under the agreement without approval from the client to bill more.

I ask for a retainer and bill against the retainer.  With a startup, be sure the retainer high enough that you will feel reasonably satisfied if that's the only amount you ever receive.  Keep the retainer low enough that the startup will pay it by writing a narrow scope of work.  I agree a regulatory strategy is a good place to start.

Even the time required to do a regulatory strategy can vary a good bit.  It might not take much time to confirm that it really is a "straightforward 510(k)" and lay out the associated path.  On the other hand, if you find, for example, that there are two potential predicates, neither of which is a slam dunk for an SE determination, meaning that the device might have to go De novo instead, that's really three regulatory paths you will have to investigate, along with advantages and disadvantages of each one over the other two.

------------------------------
Julie Omohundro, ex-RAC (US, GS), still an MBA
Principal Consultant
Class Three, LLC
Durham, North Carolina, USA
919-544-3366 (T)
434-964-1614 (C)
julie@class3devices.com
------------------------------

Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

I'm so excited for you! What an excellent opportunity.

Echoing Julie's wise comments - working against a retainer is prudent. Otherwise you place yourself at risk for late payment, non payment, etc, which can cost you time, money, relationships, and lost opportunities. 

A retainer protects both you (from not being paid for services rendered) and also the start-up. In some companies, project management may not track billed hours closely enough to avoid overages which can have bad impacts on budget. Retainers are an excellent built in control to protect both parties and allow them to focus on the work at hand.

Track your time per task, and determine what your billable increments will be. This can vary - I've seen people bill hourly, I've seen smaller increments used. Smaller increments (15 min or 10 min) are harder when getting started tracking time, but are useful in two ways.

First, they let the start-up more clearly see what was done and often ease them approving work done. Second, they help you learn how long it takes you to perform certain activities (researching one predicate, checking on one standard, creating a template, populating a template, etc...) This helps you in the future when you are scheduling and planning your own utilization for the next contract. No two projects will ever be the same, but having a ballpark idea of time required by tasks helps.

There are also hours which are not billable, so it's important to track those as well and get a sense of your billable/non-billable ratio. Your billable hours need to be at a rate which allows you to do the work, even considering the non billable time you're putting in. 

(If you choose to not work against retainer, one possibility is to include a built in discount for prompt payment. If they'd pay X$ for payment within 30 days, they'd pay 5% less for payment within a shorter time. Also, consider what your late payment policy is - is there a surcharge? How much? At what point will you cease work until payment commences? All said, it's simplest and safest for all to work against retainer.)

Joanne


------------------------------
Joanne Pelaschier RAC,PHD
Sr. Regulatory Specialist
Milpitas CA
United States
------------------------------

Original Message:
Sent: 30-May-2017 16:04
From: Julie Omohundro
Subject: How do you structure a consulting contract?

I bill an hourly rate and specify a maximum number of hours I can bill under the agreement without approval from the client to bill more.

I ask for a retainer and bill against the retainer.  With a startup, be sure the retainer high enough that you will feel reasonably satisfied if that's the only amount you ever receive.  Keep the retainer low enough that the startup will pay it by writing a narrow scope of work.  I agree a regulatory strategy is a good place to start.

Even the time required to do a regulatory strategy can vary a good bit.  It might not take much time to confirm that it really is a "straightforward 510(k)" and lay out the associated path.  On the other hand, if you find, for example, that there are two potential predicates, neither of which is a slam dunk for an SE determination, meaning that the device might have to go De novo instead, that's really three regulatory paths you will have to investigate, along with advantages and disadvantages of each one over the other two.

------------------------------
Julie Omohundro, ex-RAC (US, GS), still an MBA
Principal Consultant
Class Three, LLC
Durham, North Carolina, USA
919-544-3366 (T)
434-964-1614 (C)
julie@class3devices.com
------------------------------

Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

Thank you all very much for your feedbacks :). Y'all are awesome. You guys have been so instrumental throughout my regulatory career since the first day I joined and took the first lesson of the RAPS certificate. I don't post a lot but I do follow all the discussions and these posts have been very helpful. Thanks again. 
Working on the contract now and taken each and every advice into consideration. Crossing my fingers :)

------------------------------
An Dao
Head of Regulatory Affairs
Icell Kealex Therapeutics
Houston, TX
------------------------------

Original Message:
Sent: 30-May-2017 21:44
From: Joanne Pelaschier
Subject: How do you structure a consulting contract?

I'm so excited for you! What an excellent opportunity.

Echoing Julie's wise comments - working against a retainer is prudent. Otherwise you place yourself at risk for late payment, non payment, etc, which can cost you time, money, relationships, and lost opportunities. 

A retainer protects both you (from not being paid for services rendered) and also the start-up. In some companies, project management may not track billed hours closely enough to avoid overages which can have bad impacts on budget. Retainers are an excellent built in control to protect both parties and allow them to focus on the work at hand.

Track your time per task, and determine what your billable increments will be. This can vary - I've seen people bill hourly, I've seen smaller increments used. Smaller increments (15 min or 10 min) are harder when getting started tracking time, but are useful in two ways.

First, they let the start-up more clearly see what was done and often ease them approving work done. Second, they help you learn how long it takes you to perform certain activities (researching one predicate, checking on one standard, creating a template, populating a template, etc...) This helps you in the future when you are scheduling and planning your own utilization for the next contract. No two projects will ever be the same, but having a ballpark idea of time required by tasks helps.

There are also hours which are not billable, so it's important to track those as well and get a sense of your billable/non-billable ratio. Your billable hours need to be at a rate which allows you to do the work, even considering the non billable time you're putting in. 

(If you choose to not work against retainer, one possibility is to include a built in discount for prompt payment. If they'd pay X$ for payment within 30 days, they'd pay 5% less for payment within a shorter time. Also, consider what your late payment policy is - is there a surcharge? How much? At what point will you cease work until payment commences? All said, it's simplest and safest for all to work against retainer.)

Joanne


------------------------------
Joanne Pelaschier RAC,PHD
Sr. Regulatory Specialist
Milpitas CA
United States
------------------------------

Original Message:
Sent: 30-May-2017 16:04
From: Julie Omohundro
Subject: How do you structure a consulting contract?

I bill an hourly rate and specify a maximum number of hours I can bill under the agreement without approval from the client to bill more.

I ask for a retainer and bill against the retainer.  With a startup, be sure the retainer high enough that you will feel reasonably satisfied if that's the only amount you ever receive.  Keep the retainer low enough that the startup will pay it by writing a narrow scope of work.  I agree a regulatory strategy is a good place to start.

Even the time required to do a regulatory strategy can vary a good bit.  It might not take much time to confirm that it really is a "straightforward 510(k)" and lay out the associated path.  On the other hand, if you find, for example, that there are two potential predicates, neither of which is a slam dunk for an SE determination, meaning that the device might have to go De novo instead, that's really three regulatory paths you will have to investigate, along with advantages and disadvantages of each one over the other two.

------------------------------
Julie Omohundro, ex-RAC (US, GS), still an MBA
Principal Consultant
Class Three, LLC
Durham, North Carolina, USA
919-544-3366 (T)
434-964-1614 (C)
julie@class3devices.com
------------------------------

Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

Thanks An for posting this question. I also want to thank all the people who responded. I'm still relatively new to independent consulting and figuring these things out as I go.

Best

------------------------------
Michael Nilo
Network Regulatory Partners
Nilo Medical Consulting Group
Portland OR
United States
------------------------------

Original Message:
Sent: 30-May-2017 22:25
From: An Dao
Subject: How do you structure a consulting contract?

Thank you all very much for your feedbacks :). Y'all are awesome. You guys have been so instrumental throughout my regulatory career since the first day I joined and took the first lesson of the RAPS certificate. I don't post a lot but I do follow all the discussions and these posts have been very helpful. Thanks again. 
Working on the contract now and taken each and every advice into consideration. Crossing my fingers :)

------------------------------
An Dao
Head of Regulatory Affairs
Icell Kealex Therapeutics
Houston, TX
------------------------------

Original Message:
Sent: 30-May-2017 21:44
From: Joanne Pelaschier
Subject: How do you structure a consulting contract?

I'm so excited for you! What an excellent opportunity.

Echoing Julie's wise comments - working against a retainer is prudent. Otherwise you place yourself at risk for late payment, non payment, etc, which can cost you time, money, relationships, and lost opportunities. 

A retainer protects both you (from not being paid for services rendered) and also the start-up. In some companies, project management may not track billed hours closely enough to avoid overages which can have bad impacts on budget. Retainers are an excellent built in control to protect both parties and allow them to focus on the work at hand.

Track your time per task, and determine what your billable increments will be. This can vary - I've seen people bill hourly, I've seen smaller increments used. Smaller increments (15 min or 10 min) are harder when getting started tracking time, but are useful in two ways.

First, they let the start-up more clearly see what was done and often ease them approving work done. Second, they help you learn how long it takes you to perform certain activities (researching one predicate, checking on one standard, creating a template, populating a template, etc...) This helps you in the future when you are scheduling and planning your own utilization for the next contract. No two projects will ever be the same, but having a ballpark idea of time required by tasks helps.

There are also hours which are not billable, so it's important to track those as well and get a sense of your billable/non-billable ratio. Your billable hours need to be at a rate which allows you to do the work, even considering the non billable time you're putting in. 

(If you choose to not work against retainer, one possibility is to include a built in discount for prompt payment. If they'd pay X$ for payment within 30 days, they'd pay 5% less for payment within a shorter time. Also, consider what your late payment policy is - is there a surcharge? How much? At what point will you cease work until payment commences? All said, it's simplest and safest for all to work against retainer.)

Joanne


------------------------------
Joanne Pelaschier RAC,PHD
Sr. Regulatory Specialist
Milpitas CA
United States
------------------------------

Original Message:
Sent: 30-May-2017 16:04
From: Julie Omohundro
Subject: How do you structure a consulting contract?

I bill an hourly rate and specify a maximum number of hours I can bill under the agreement without approval from the client to bill more.

I ask for a retainer and bill against the retainer.  With a startup, be sure the retainer high enough that you will feel reasonably satisfied if that's the only amount you ever receive.  Keep the retainer low enough that the startup will pay it by writing a narrow scope of work.  I agree a regulatory strategy is a good place to start.

Even the time required to do a regulatory strategy can vary a good bit.  It might not take much time to confirm that it really is a "straightforward 510(k)" and lay out the associated path.  On the other hand, if you find, for example, that there are two potential predicates, neither of which is a slam dunk for an SE determination, meaning that the device might have to go De novo instead, that's really three regulatory paths you will have to investigate, along with advantages and disadvantages of each one over the other two.

------------------------------
Julie Omohundro, ex-RAC (US, GS), still an MBA
Principal Consultant
Class Three, LLC
Durham, North Carolina, USA
919-544-3366 (T)
434-964-1614 (C)
julie@class3devices.com
------------------------------

Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------

One thing I learned early on from a colleague who had been consulting of 20 years - always include a Force Majeur clause.  This covers acts of God, critical personal events (e.g., death in the family), and so on.  You can find good examples on-line, then tailor one to suit.  I actually had a client try to penalize me for not being able to fly to California the day after 9/11; fortunately, there was a Force Majeur clause in the contract. The contract should not only describe your services, fees and estimated costs, it should also protect you.

------------------------------
Arvilla Trag
Iron River MI
United States
------------------------------

Original Message:
Sent: 29-May-2017 17:51
From: An Dao
Subject: How do you structure a consulting contract?

Hi all, 

I'm interested in branching into regulatory consulting and have landed a first potential consulting client - a startup working on software-based diagnostic tools.  The next step in our conversation is drawing up a contract, and I'd like to get a sense of the best practices in structuring a consulting contract.  In particular, do you tend to use hours for billing, or draw up contracts based on particular milestones?  If you measure in hours, do you agree ahead of time how long a project should take, and how do you handle unexpected delays?  If milestones, what milestones might be appropriate for an early stage startup with a product, but which hasn't yet developed a regulatory strategy?

Any other do's and don'ts and lessons learned would be appreciated!

------------------------------
An Dao
Head of Regulatory Affairs
Houston, TX
------------------------------