Competition for business is fierce, especially in this economy.

Large businesses providing Staff Aug and Consulting (IBM, Accenture, etc.) give the Clients the Agreements that will rule their relationships.

Everyone else, is provided the Standard Agreement the Client wants them to sign. Mom-and-Pop shops will sign anything just for the opportunity to land some requirements: they know they have nothing to lose, no assets a successful suit brought against them can attach.

The problem is then for the vast majority of vendors, those responsible professional recruiters that want to provide quality services, the fruits of their hard work, but can’t compromise the survival of their business by entering into an abusive, one-sided ‘Standard Staffing Agreement’ as written by overly jealous lawyers working for their prospective clients.

A clause lawyers love specifies that the Client should be able to deny payment or even request reimbursement for work done on T&M (time and material) basis, even months or years after the services have been delivered; at their sole discretion.

Projects do fail at times. Of the many reasons for failure, the Contractor’s work accounts to 15% of them, at most. Lack of ‘buy in’, champion or sponsors on the Client side; bad project management (often provided by the Client); environmental changes (being laws, rules, business plans, etc.), lack of funding, bad specifications, etc. play a much larger role.

Who is the weakest link? Who is more likely to be blamed for such ‘failure’? The vendor, of course. Especially because that will be the only way to recover most of the cost, which is now classified as ‘waste’.
That is why is unfair to put that responsibility, square, on the Vendor, as too often such Standard Staffing Agreements include.

In reality, the Vendor (Staffing Agency) pays the resources (Consultants, Contractors, Employees) within 2 weeks of the services being rendered. The Vendor has absolutely no recourse, no practical way to recover those payments should the Client come back weeks, months or years later asking for a refund.

To include such abusive clause in an Agreement is the way of some lawyers to CYA, without regard to the overall business goals of their clients, since such language makes it impossible for the Client to enlist responsible vendors to partner with them. If, out of necessity, the Vendor does agree to those terms, it will resent the treatment, seeding the relationship from the start with unhealthy elements of mistrust. The Vendor knows that the Client holds a sword over their heads and, at their discretion or whim, can strike.
Such demand from a Vendor equates to you going to a restaurant for dinner every day for a year, and ask for a full refund in all your meals on day 366, because you just ‘discovered that they did not taste very good after all’.