Master Services Agreement Cost

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How much does a master services agreement cost? A master services agreement is a legal contract between a service provider and a client that establishes specific terms and conditions for all current and future activities between the parties.

Many businesses use master services agreements when they know that they will be conducting ongoing business with another entity. The master services agreement lays out the broad rights and responsibilities of both parties so they can use a more focused contract for individual transactions.

Master services agreements are most commonly found in the technology industry, where many companies have ongoing long-term business relationships. Master services agreements can also be used for:

  • Client and vendor relationships
  • Government contracts
  • Union negotiations

A master services agreement is an important document because it lays the foundation for a long-term business relationship. It is essential that this document is drafted correctly to protect the interest of both parties. Many businesses choose to hire a business lawyer to draft a master services agreement.

How much will it cost to hire a lawyer to draft a master services agreement? Let's explore this question and go over some general information about master services agreements.

How Much Does a Master Services Agreement Cost?

The cost of a master services agreement will vary based on several factors, like the complexity of the contract and the location of both parties.

Master services agreements are easily customizable to fit the needs of both parties, so they can be as straightforward or as complex as the parties desire. If the contract is complex with many specific terms and conditions , it will take longer to draft and incur more legal fees.

An experienced business lawyer will know what clauses and terms must be included in the agreement to protect both parties and ensure an amicable business relationship for future transactions.

Based on ContractsCounsel's marketplace data, the average cost of a master services agreement is $561.25 .

What's Typically Included in a Master Services Agreement

Master services agreements will vary depending on the parties and the industry, but an effective, legally binding master services agreement will cover the following terms and conditions:

  • General terms. The master services agreement should clarify that it stands apart from the terms and conditions of future contracts.
  • Confidentiality terms. Commonly, companies using a master services agreement have access to certain types of information like client data. A confidentiality clause protects both parties and their data.
  • Intellectual property rights. The contract should dictate which party retains ownership of intellectual property.
  • How work will be performed. It is important that a master services agreement lays out the responsibilities of each party and how each party will perform their required tasks.
  • Dispute resolution. It is a good idea to include steps for dispute resolution in the event that a disagreement arises between the parties.

Other clauses and issues that should be addressed in a master services agreement include:

  • Geography
  • Limitations of liability
  • Payment terms
  • Venue
  • Warranty
  • Work standards
  • Indemnification clause
  • Insurance
  • Termination of the agreement

When a master services agreement is detailed and includes terms and conditions for every situation, it lays the foundation for a successful business relationship.

Who Needs a Master Services Agreement?

Any company that is involved in ongoing business with another company should consider a master services agreement. Companies use master services agreements for two primary reasons:

  1. Indemnification . One party releases the other party for any liability or losses related to business dealings
  2. Risk allocation. Practice of implementing strategies to allocate risk

Master services agreements are a practical way for two companies to manage their long-term business relationship while protecting their individual interests.

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Examples of Master Services Agreement Projects

Master Services Agreement Drafting

It is common for a business to hire a business lawyer to draft a master services agreement. This contract can be complex, and because its job is to protect both parties and facilitate a productive working relationship, it is extremely important that it is drafted correctly.

An experienced business lawyer will know what terms and clauses must be included in the contract to protect both party's interests and comply with all contract laws.

Master Services Agreement Review

In some cases, parties may already have a master services agreement in place that they may have drafted on their own using a template. While it is possible to prepare your own master services agreement, it is always a good idea to have a licensed business lawyer check over the final contract before using it for business purposes.

Master Services Agreement Disputes

Even when companies have the most professional, iron-clad master services agreement, it is still possible for a dispute to occur. If the parties disagree over the terms of the contract or believe the other party has breached the contract, they should consult with a business lawyer.

A business lawyer will help in the dispute resolution process or file a lawsuit if the disagreement cannot be resolved.

Drafting Master Services Agreement Cost

Drafting a master services agreement can be a complicated job that will require specialized knowledge in business and contracts law.

According to ContractsCounsel's marketplace data, the average master services agreement drafting costs are $750.00 across all states.

Reviewing Master Services Agreement Cost

Reviewing a master services agreement is also a job that will require specialized knowledge. The attorney needs to have experience with contract law and be familiar with any local or state laws that may govern contract enforceability.

ContractsCounsel's marketplace data shows the average master services agreement review costs to be $515.00 across all states.

How Do Lawyers Charge for a Master Services Agreement?

Lawyers hired to draft a master services agreement will need to be compensated for their time and legal knowledge. Business lawyers will either charge clients using an hourly rate fee structure or a flat rate fee structure.

Hourly Rates for a Master Services Agreement

When a lawyer uses an hourly fee structure, they will charge clients at a set hourly rate for the number of hours it took to complete a project. This is a common way for attorneys to bill because it ensures they are adequately paid for their time.

Hourly rates are usually used when a lawyer works on an ongoing case or project with no definitive end date.

The marketplace data for ContractsCounsel shows the average hourly rate for a business lawyer ranges from $225 - $300 per hour.

Flat Fee Rates for a Master Services Agreement

When a client hires an attorney for a specific purpose, like drafting a master services agreement, the attorney may quote the client a flat fee to complete the task.

To come up with a flat fee rate, an attorney will still consider their hourly rate, but they will estimate the amount of time it will take to finish a client's project and quote the client a flat rate fee to be paid upfront.

On the downside, if a lawyer underestimates how long a project takes to finish, they will not be compensated for their additional time.

ContractsCounsel's marketplace data shows the average flat fee rate for master services agreement costs to be $561.25 .

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