Avoid Confusion
A well-drafted agreement clearly defines responsibilities and fees. If you are being paid a flat fee you will need to know your obligations to avoid doing additional work that will cost you time and money. For example, a computer software developer turned consultant would like to limit his work to software development and specifically exclude other work, such as program testing.
Getting Payments on Time
A consultant is paid consulting fees which can be worked out in several ways. You can determine typical consultant rates - what companies pay consultants for their hours, days, projects and expert opinions. Many consultants negotiate a standard up-front retainer and specify a timetable for being paid. If the consultant is not paid on time, the work does not proceed. Specifically defined payment arrangements ensures you are paid for your work in a timely manner. Also include a clause addressing how any future disputes should be handled, saving you and your client lawyers' fees and court costs.
Intellectual Property
As an employee, the ownership of any copyrights or patents on work that you create usually belongs to your employer. A consultant usually retains the ownership of intellectual property for work that is developed. If you developed software, you can use it again and charge more for less work, because you have already developed the tool that you own. A written agreement clarifies your rights to intellectual property.
Finally, have the agreement reviewed by a lawyer if you seriously want to engage in consulting work as a well-drafted written agreement is worth the expense. You can create a first draft and then have it reviewed by a business lawyer to finalize the document to be used in the future.
