A comparative analysis of contractual risks in statistical consulting

Abstract

This study enumerates and compares the risks and rewards of different forms of statistical consulting contracts. We assess three different contract models: project‐based fees, hourly fees, and retainer agreements and three different planned durations: project‐based, time‐based, and evergreen contracts. The requirements of time and effort vary considerably for many aspects of consulting work. The risks of statistical consulting contracts include both the general risks of consulting projects along with the specialized risks of statistical investigations. We enumerate a number of general risks in the categories of unanticipated developments, revisions and collaboration, and changing scopes of projects. Meanwhile, the specialized statistical risks include issues of study design, data quality, statistical investigation, and communication of statistical issues. Because of these concerns, the specialized risks of statistical investigations add considerably to the general risks of consulting projects. Moreover, these issues can be exacerbated or mitigated by the form of the consulting agreement. With a greater understanding of the risks and benefits of each type of contract, statistical consultants and clients can negotiate more mutually beneficial contracts for either or both parties. Through this discussion, we hope to raise awareness of these issues and help to create working conditions with a greater likelihood of a successful project for both statistical consultants and their clients.