How much does an employment contract cost?

How Much Does an Employment Contract Cost?

The average cost (i.e., legal fees) for a lawyer to draft an employment contract is $690.00 [1] on a flat fee basis. The average cost for a lawyer to review an employment contract is $420.00 [2] on a flat fee basis. These cost points come from recent employment contract projects on the ContractsCounsel platform and are averages from across all US states.

What is an Employment Contract?

Employment contracts widely used legal documents. They formally establish a legally binding relationship between an employer and an employee, giving rights and obligations to both parties. Most employers use them to clearly outline the terms of employment so expectations are clearly set.

Getting help from a lawyer with an employment contract is highly encouraged since the employment practice area can have many disputes. Employment contract costs can vary widely depending on what the client needs done.

What’s Typically Included in an Employment Contract

• Wages or Salary. This term outlines the compensation package being offered to the employee.
• Role & Responsibility of Employee. This term outlines the services the employee will be providing to the employer in exchange for compensation.
• Schedule. This term outlines the days and hours the employee will be working.
• Employment Duration. This term outlines the length of employment, which can be months, years, or indefinite.
• Confidentiality. This term may require the employee to keep information about the employer confidential. Employers can also make employees sign a separate confidentiality agreement.
• Description of Benefits. This term will outline any benefits the employer will provide for the employee, which can things like health insurance, 401ks, etc.
• Noncompete Agreement. Many employers require employees to sign contracts with noncompete clauses, which limits their ability to work for competitors should they choose to leave.

Types of Employment Contracts

Employment contracts are their own type of contract and are typically put in place with full-time employees. However, there are many different types of contracts and legal documents that fall into the Employment practice area. Below is a list of popular employment-related documents.

• Employment Contract. An employment contract is a legal document put in place between an employer and employee outlining the terms of their relationship.
• Consulting Agreement. Consulting agreements are used between a company and a consultant that is providing services.
• Independent Contractor Agreement. Independent contractor agreements are legal documents used between a business and a contractor, that provides services on a contract basis.
• Noncompete Agreement. Noncompete agreements are legal documents that limit an employee’s ability to work for a competitor if they leave the employer.
• Severance Agreement. Severance agreements are legal documents put in place with employees that are let go, which typically outline severance pay the employer will be providing after their termination.

Examples of Employment Contract Projects

Employment Contract Drafting Service

Many businesses will hire employment lawyers to draft or create employment contracts to be used between the business and employees. It is rare for an employee to need this service, since employers are typically responsible for providing the employment contract.

Employment contract drafting typically involves a consultation with the business to learn about the terms they want included in the legal document, then implementing those terms into a contract template to make sure it includes everything the business requires. Employment contract costs can vary based on how many custom terms need to be included in the document.

Reasons you may need to find a lawyer to draft an employment contract include:

• Offer Accepted by Future Employee. A business may have negotiated the terms of employment with a potential employee and need to create a formal legal document to be signed.
• Want a General Template. A business may expect to hire employees in the future and want to create a general template they can use for any future hires.

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Employment Contract Review Service

When considering a future position, an employee may hire an employment lawyer to review a contract presented to them by a potential employer. The reason for employment contract review is to make sure the employee understands the document they have been asked to sign to make sure the rights of the employee are protected.

Employment contract review costs can vary widely based on the length of the employment contract and complex the terms of employment are.

Reasons you may need to find a lawyer to review an employment contract include:

• Considering a Position. An employee may be considering a position with a potential employer and want an employment lawyer to review the contract to make sure their rights are protected.
• Was Recently Let Go. An employee may have been let go by an employer and want to understand what they may be entitled to as part of their contract. This may include severance pay.
• Thinking About Moving to Competitor. An employee may be considering a new position with a competitor and need to understand if there are any limitations to taking the new position within a noncompete clause.
• Major Change in Company. A company may have been acquired or gone through another major change, where an employee will want to know what they are entitled to as it relates to the change.

Breach of Employment Contract

In certain circumstances, relationships between employers and employees can go south and questions may arise as to whether there was a breach of contract by either party. This will require a review of the contract and an analysis as to whether any of the terms were breached, which may lead to employment litigation.

Reasons you may need to review an employment contract for a potential breach include:

• Incident Occurred at Work. An employee may have been involved in an incident at work that would lead them to believe the terms of their employment were breached.
• Recently Let Go. An employee may have been terminated and thinks the termination was unfair or in violation of their rights outlined in the employment contract.
• Bad Treatment. In some cases, an employee may be treated poorly by their employer and want to take legal action against them.

How Much Does it Cost to Draft an Employment Contract?

Drafting employment contracts comes with a cost, since it requires the time of a qualified lawyer to complete the project.

ContractsCounsel’s marketplace data shows the average employment contract drafting costs to be $690 across all states and industries.

How Much Does it Cost to Review an Existing Employment Contract?

Hiring a lawyer to review an employment contract comes with costs. The lawyer will need to spend time consulting with the client and reading over the contract to analyze the terms.

ContractsCounsel’s marketplace data shows the average employment contract review costs to be $420 across all states and industries.

How Do Employment Lawyers Charge?

Employment lawyers have a variety of ways they charge their clients for services. Depending on the complexity of the project, the lawyer can suggest the best way to bill for services and may choose from the below options.

Hourly Rate

Many employment lawyers will choose to bill their time hourly. In this scenario, the lawyer will log billed time in a timesheet and present it to the client after the project is completed. The advantage to hourly work is the client will only be paying for the time spent by the lawyer. The disadvantage is that it can be hard to estimate employment contract costs if projects are billed hourly.

ContractsCounsel’s marketplace data shows the average hourly rate for an employment lawyer ranges from $250 - $350 per hour.

Flat Fee

Flat fee billing structures are becoming more popular for employment lawyers. Lawyers will simply provide a flat-fee price to the client for services to be approved and paid for when the project is completed. This provides more certainty around costs to the client for the total project.

ContractsCounsel’s marketplace data shows the average flat fee rate for employment contract costs to be $460.

Subscription Fee

In certain situations, lawyers may opt to bill clients on a subscription basis. This may include unlimited contract reviews for a fixed fee each month. The advantage to this model is the client pays a set fee each month to help with budgeting. The disadvantage is that there may be months where no work is required, but payment is still due.

Get Help with an Employment Contract

Do you need help with an employment contract project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from employment lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.

References

1. ^ Based on real pricing data from ContractsCounsel's marketplace. Last updated 4 October, 2024.
2. ^ Based on real pricing data from ContractsCounsel's marketplace. Last updated 4 October, 2024.