The Academic Consultant, Part 3--Conflicts of Interest

In the previous installment, we discussed the importance of both planning for the strategic growth of your consultancy and soliciting solid legal counsel on potentially tricky situations. Never is this more critical than in the initial steps of the negotiation between your consultancy and your university. Because it pays your daily wages, the university has a strong interest in your dual role as a consultant and an academic. The administrative aspects of avoiding conflicts of interests, such as maintaining separate business details (e-mail, phone, mailing address), are relatively simple and clear-cut. However, other minefields may still need navigating.

Thanks to political scandals, the public is now quite familiar with the concept of conflict of interest. But such conflicts can also arise as you develop your consultancy, so you must be very careful and continuously vigilant to keep a clear separation between your dual roles as an academic paid by a university and a consultant running a business. One of the comments that I heard as I was planning my consultancy was that I will always be regarded as a Dalhousie professor, with the clear implication that it is impossible to avoid using your role as an academic to benefit your business. However, I feel that this kind of leverage is minimal and does not constitute a deliberate misuse of one's position. OK, so your academic position and training gives you the major advantage of name recognition and credibility, which may help you to get your foot in the door with a potential client. But I honestly think that this is about as far as your "name" gets you--ultimately, you still have to perform to prove your worth. Nevertheless, although you can make it known that you are a university researcher, you should avoid overtly advertising that fact on any of your consultancy's official promotional material, such as brochures and Web sites, to prevent any trademark issues.

The overall strategy in avoiding any conflict of interest is to establish a working relationship with the university administration; ideally, you should develop a contract or memorandum of understanding. Before entering into any negotiations, first arm yourself with knowledge, gleaned from a thorough review of your collective bargaining agreement (CBA) and any additional university documents regarding extracurricular activities by faculty. My CBA is probably typical in its language, stating, "Members have the right to engage in part-time professional activities, paid or unpaid, providing such activities do not interfere with their regular obligations and duties to Dalhousie University." Note that this deliberately vague language works in your favour because no specific time limit is outlined or enforceable by the university as long as you maintain your professional obligations to it.

A consultant essentially hires out expertise on a time basis, making the accurate recording of hours spent on projects essential for both project management and financial accounting. Another typical statement in the CBA is that "Members shall report all such activities when requested by the Dean or Vice-President and in a form requested by the Dean or Vice-President." Therefore, accurate and detailed time tracking is also invaluable documentation in maintaining the legitimacy of your business in the eyes of the university. This means that you must provide full disclosure of the time commitment to your consultancy in your annual reporting of activities. Keep in mind that the onus is upon you to clearly delineate what constitutes university work or consultancy work and that any work performed as a paid consultant, including professional lectures or writings, cannot be considered part of your university workload. One potential grey area might be university-related work though which you receive an honorarium--serving on grant review committees, for example. In such cases, avoid any blurring between your dual roles by electing to receive remuneration through your faculty position and not through your consultancy.

It should be obvious that university property is off limits in the running of your consultancy. This includes not only business equipment (e-mail, phone, etc.) but also, more importantly, your research equipment. However, depending on the nature of your research and consultancy, it is often impossible to function without laboratory equipment. For example, my work as a sport-science consultant relies on using much of my lab equipment for athletic testing. Therefore, strange as it may appear, it is essential that you negotiate a contract with your university to rent your own equipment if necessary, and that this cost appear in any proposals. Some of the issues for consideration include the scheduling of lab use if it conflicts with teaching and/or research requirements and also the possible wear and tear and eventual replacement or upgrade of equipment. In addition, the university may have concerns about the liability coverage for your extracurricular usage of the equipment, making it essential that you have adequate and appropriate individual liability insurance. It is definitely in your best interest to have as detailed a working contract as possible with the university and to seek advice from your faculty association or legal counsel.

Another area of potential conflict that you must consider is the recruitment of students for your business, as you definitely want to avoid the perception that your lab and university-funded research exist simply to provide student labour for your business. If you have your own or any university students doing any work for your consultancy, it becomes critical that you have a clear and detailed contract with each of them. This is especially important if they are performing the work on a volunteer and unpaid basis--the last thing you want is somebody claiming that you are abusing your position as a professor by coercing your students into doing unpaid work for your business. And if you are using any case studies from your business in your teaching, make sure that you use only projects that were previously completed and not prospective or current ones!

As I'm sure is evident by now, conflict of interest is a critical planning point for your business because of your dual functions as a scientist and consultant. Remember that just the mere perception of conflict, even if completely unfounded, can be just as damaging as an actual ethical breach. Your primary defence is to be completely up front with the university and all stakeholders in the planning of your business and to be utterly diligent in your record keeping (e.g., contracts, time records, accounting).

Good luck! I'll be back here in a few months to reflect on how my own consulting business fared in its first year of operation.

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