Renegotiation invariably involves going back on a promise or commitment. The need to renegotiate a deal does not mean the original negotiation was a failure and yet in most instances renegotiation is a way out. Before the process can begin, we need to understand that in some way and in some degree we are going back on our promise or agreement made earlier. That is why the approach is so critical.
Let's say you are a contractor of long standing. Yet you got to raise your fee by half to your most popular client who has been part of your growing up to the present day status you hold. You have been doing projects and you're meeting people and yet you are in a dilemma ?? how on earth do I tell him? Here are some tips on how to work your way out of this and other traps frequently encountered by consultants at contract-renewal time. Consult a lawyer if you think you need legal advice. Set clear rules of engagement in terms of how the client is going to communicate with you and react during meetings. Once you get through that process, it's developing and implementing an agreement with the price and scope that allows you to have the right relationship post-renegotiation.
Right Time for Renegotiation?
In theory you can renegotiate at any time within the period of contract. A breach can occur and you can always find something. Sometimes it can be pretty material in the future. So you can really go for renegotiation at any time without wasting time.
Money Is The Concern
Most contractors think of money when they consider renewing with an old client. It's never easy asking for more money as the clients sometimes openly resent it. Be ready to rationalize when you want to increase your fee with existing clients. One way is to cite increases in expenses built into cost overheads. The other alternative is to restructure your charges rather than increasing your hourly or daily rate. This could mean asking for reimbursement for mileage if a client requires you to travel to his office.
Intellectual Property
Consider renegotiating intellectual property terms of your agreement if you had given away all rights to the intellectual capital you created, whether it's software code or a slick design. This has lot to do with renegotiation rather than cursing yourself. Suppose that in performing work for a client, a programmer writes code that she recognizes could have commercial value beyond the client's specific needs. The client, satisfied with the results of the project at hand may not want to go to the trouble of realizing the additional value the programmer has created.
Avoid Client Phobia
Renegotiation can be without fear of offending or alienating your client. Think about your business and the bottom line. Be prepared to walk if they refuse to give in."
