What Are Common Client Concerns in Professional Services Agreements?
We’ve studied concerns clients usually have when drafting and reviewing their professional services agreements. These documents outline client-service provider relationships, so they need to be legal yet fair for both parties.
In this article, we’ve provided you with the top concerns clients have about professional services agreements, based on ContractsCounsel’s real project data. These include jurisdictional and compliance issues, limitation of liability, subcontractor and third-party involvement, intellectual property and payment protection, and regulatory and industry compliance.
Note: Our research comes from ContractsCounsel’s real, yet anonymized professional service agreement review postings on the platform. ContractsCounsel is an online legal marketplace connecting lawyers with clients to draft and review contracts.
Jurisdictional and Compliance Issues
Concern 1: A common worry for clients is legal compliance. They might be concerned about which state laws govern the contract and want to check that it’s compliant with all rules.
How lawyers help:. An attorney will run through the document, checking for compliance with all appropriate laws. They’ll confirm that the laws benefit the client. They can adjust terms if the business operates in a multi-state or regulated industry.
Limitation of Liability and Risk Allocation
Concern 2: Business owners don’t want to be liable for things that shouldn’t be their responsibility.
How lawyers help: Lawyers will check the limitation of liability and indemnification clauses in the professional services agreement. They will ensure they’re legal and fair based on the services provided.
Subcontractor and Third-Party Involvement
Concern 3: Clients sometimes wonder if subcontractors can be used and who will be responsible for their work.
How lawyers help: Attorneys will clarify and adapt terms pertaining to subcontractors. Subcontractor use needs to be transparent with clear accountability provisions. There should also be a clause that states client approval is essential for any third-party involvement.
Intellectual Property and Payment Protection
Concern 4: If the agreement lacks clarity regarding ownership of work and payment, this could cause delays and arguments.
How lawyers help: A lawyer will ensure there’s a note about IP ownership rights, license use, and payment terms that protect both parties.
Regulatory and Industry Compliance
Concern 5: Clients in specific industries, such as healthcare and construction, might worry that the agreement lacks compliance provisions pertaining to them.
How lawyers help: A lawyer will check that the contract contains compliance language for specific laws (such as OSHA and HIPAA). They’ll also confirm the correct safety and privacy obligations.
Termination and Cancellation Rights
Concern 6: Sometimes, clients seek the flexibility to terminate and cancel the agreement.
How lawyers help: A lawyer will review the contract’s termination and cancellation rights. They’ll make provision for clients to leave the agreement without risking huge penalties.
Contract Language and Clarity
Concern 7: If there are vague or unclear terms, or missing terms, the agreement could cause issues and arguments.
How lawyers help: A lawyer will review the entire agreement to ensure that it’s fair, clear, and legal.
Key Takeaways
- A client’s main concerns include compliance, agreement termination, and liability.
- To prevent arguments and future disputes, every professional services agreement needs to be clear with accurate jurisdictional compliance.
- Getting your professional services agreement legally reviewed protects both parties while meeting all legal and industry standards.
- Hiring a lawyer can help you to customize your contract so it’s tailored to your needs while being legal.
Need help with your professional services agreement?
ContractsCounsel allows you to post your contract review project for free. You’ll connect with vetted business lawyers, who’ll review your professional services agreement.