If truth be told (and I am about to tell it), I do not know how common this practice is, but we have become aware of cases where GIPS(R) (Global Investment Performance Standards) verifiers require their clients to sign multi-year contracts. E.g., they will perform the verification for the period 2010-2012. Does this remind you of anything?
Cell phones come to mind.
AT&T, Verizon, etc. all do this: they require you to sign up for a multi-year contract.
Can you get out of them? Sure, if you want to pay them. But who does? Regardless of the quality of the phone or service, you're pretty much stuck.
The Spaulding Group has NEVER thought of doing this. Our view is, if you don't like our service, fire us! Our feelings won't be hurt (okay, maybe a little bit, but we'll get over it). While we always strive to deliver the highest degree of service, we don't want to require our clients to keep us if they don't want to.
Why would you want to require your clients to sign a multi-year contract?
Oh, I know why: for YOUR benefit! Now I get it. Lock the client in. Even if they discover a better option, you lock them in, so that they are forced to retain your services.
Our advice to firms looking for a verifier: if the firm you choose is making you sign a long-term agreement, just say "no!"
If you have confidence in what you deliver, you won't have such a practice. Have a different view? Chime in!
p.s., if you'd like to learn more about TSG's GIPS and non-GIPS verification service, go to our website; better yet, fill out a questionnaire and get a detailed no-obligation proposal, along with a surprise gift!