Confidentiality Agreement Cost

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What does a confidentiality agreement cost? This is a question many company owners ask when faced with disclosing sensitive and private information. So let’s explore this question and review some general information about confidentiality agreements.

How Much Does a Confidentiality Agreement Cost?

A confidentiality agreement, sometimes called a non-disclosure agreement (NDA), is a legally binding contract between two parties. This agreement protects one party from disclosing the private information of another party.

Confidentiality agreements protect corporate information or proprietary knowledge. For example, they are often used during corporate mergers or when a company hires new employees who have access to sensitive information.

There are various types of confidentiality agreements. Determining which one you need to protect your company’s privacy and information can be challenging. As a result, many companies hire a lawyer who has experience with confidentiality agreements to draft this important contract.

A knowledgeable attorney will know what type of confidentiality agreement your company needs and what provisions and clauses need to be included to protect your company’s interests best.

Based on ContractsCounsel’s marketplace data, the average cost of a project involving a confidentiality agreement is $386.67.

The cost of a confidentiality agreement will vary depending on several variables. For example, the particular service requested, the number of parties involved, and the number of custom terms included in the document will all affect the agreement's cost.

What’s Typically Included in a Confidentiality Agreement

Confidentiality agreements will vary depending on the type of company, protected information, and the type of agreement used. Even though these contracts are usually customized, most confidentiality agreements will include the following elements:

  • Parties. The names and information for the parties signing the agreement.
  • Duration. The agreement should have a beginning and end date.
  • The Protected Information. The purpose of the confidentiality agreement is to protect certain information. Therefore, the items subject to confidentiality need to be listed so the parties know what information cannot be shared.
  • Obligations. The parties may be subject to specific responsibilities to ensure the protected information is kept confidential.
  • Exclusions. Some information is already known by the parties or available in the public realm. So, this information will be excluded from the confidentiality agreement.
  • Permissible Disclosure. Certain situations, like law enforcement involvement, may require the disclosure of information. These situations should be outlined in the agreement.
  • State Laws. The state laws that apply to the agreement should be included.
  • Dispute Resolution. This provision governs how a dispute will be handled if it should arise.

Types of Confidentiality Agreements

There are several types of confidentiality agreements. Each type of agreement will serve a different purpose or industry. If you are unsure which type of confidentiality agreement your company needs, consult with a contracts lawyer to help you decide.

The four standard confidentiality agreements include:

  • One-Sided Non-Disclosure Agreements. Sometimes called a Unilateral NDAs, only one party is disclosing confidential information to the other party under this confidentiality agreement.
  • Mutual Non-Disclosure Agreements. Also called a bilateral or multilateral confidentiality agreement refers to an agreement where both parties are disclosing confidential information. Hence, both parties are under confidentiality obligations.
  • Merger and Acquisition Agreements. Often abbreviated to M&A NDAs, they will execute a confidentiality agreement when two companies decide to merge. This protects both companies' information if the merger does not go through.
  • Employer-Employee Non-Disclosure Agreements. It is common for employers to require new employees to sign a confidentiality agreement. This type of agreement will prevent employees from sharing business information, client lists, or trade secrets.
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Examples of Confidentiality Agreement Projects

Confidentiality Agreement Drafting Service

One service that contract lawyers provide is drafting services. Instead, many companies would hire a licensed attorney to draft an important contract to ensure it is correctly written and legally enforceable.

Drafting services will often include a consultation with the company owner, creating the agreement, and revisions if necessary. The lawyer will first want to meet with the owner to learn about the business and the type of information that the confidentiality agreement will cover.

The lawyer will then draft a comprehensive agreement the company owner can use for business. The owner can schedule additional meetings with the lawyer for revisions or add other terms if necessary. It is important to remember that additional legal services may incur additional fees.

Confidentiality Agreement Review Service

It is a good idea to hire a lawyer to review your confidentiality agreement before you execute it. While legal contracts are often written in challenging ways for non-lawyers to understand, you should ensure you fully understand what you agree to.

A lawyer can review your contract, explain any terms you don’t understand, and ensure that you understand all your obligations under the contract. Furthermore, when you hire a contract lawyer to review the document, they are looking at the contract with your interest in mind. Therefore, your lawyer will determine if the contract is fair and protects your interests as well.

Confidentiality Agreement Drafting Costs

Drafting a confidentiality agreement comes with costs. The company or party requiring the agreement will most often incur the fee. Fees will vary based on the type of company, length of the document, and the individual lawyer’s rates.

ContractsCounsel’s marketplace data shows the average confidentiality agreement drafting costs are $386.67 across all states and industries.

Confidentiality Agreement Review Cost

Suppose the signing party hires a lawyer to review the confidentiality agreement. In that case, they will be responsible for the legal fees, not the company requiring the agreement. In addition, a lawyer will charge for the time it takes to review the contract and meet with their client.

ContractsCounsel’s marketplace data shows that the average confidentiality agreement review costs $386.67 across all states and industries.

How Do Confidentiality Agreement Lawyers Charge?

Contract lawyers charge for services in a variety of ways. However, the two most commonly used fee structures are hourly and flat.

Hourly Rates for Confidentiality Agreements

When using an hourly rate fee structure, the lawyer provides the client with a set hourly rate that they will bill for the project's duration or case. The client will usually receive periodic bills that they must pay throughout the legal representation.

Hourly rates are beneficial for lawyers because it ensures they will be compensated for every hour spent working on a client’s project. Clients, however, may not like this fee structure because they will not know the total cost of legal services until the end of the case or project.

ContractsCounsel’s marketplace data shows the average hourly rate for a confidentiality agreement lawyer ranges from $200 - $300 per hour.

Flat Fee Rates for Confidentiality Agreements

If a lawyer is completing a specific project for a client, like drafting a confidentiality agreement, they may choose to charge the client using a flat fee structure. The lawyer can estimate how much time the project will take to complete and quote the client a set rate for the entire job.

This structure is beneficial for clients because they know exactly how much legal services will cost. Still, often they are required to pay the entire fee upfront.

For lawyers, flat fee rates can be tricky. For example, if the project takes longer than expected, they may be unpaid for work hours.

ContractsCounsel’s marketplace data shows the average flat fee rate for a confidentiality agreement is $386.67.

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