ContractsCounsel Logo

Professional Services Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 9,700 reviews
No Upfront Payment Required, Pay Only If You Hire.
Home Types of Contracts Professional Services Agreement

Jump to Section

What Is a Professional Services Agreement?

A professional services agreement (PSA) is a form that firms or consultants can use to create a contractually binding arrangement with a highly skilled business or individual. These agreements usually cover single projects with defined scopes or timelines. As a legally binding contract, a PSA provides protection for both the consultant and the business that requests the services.

A PSA typically lists the services that the consultant will perform, the compensation that the business will provide, and the time frame for the contract. Because many PSAs also detail procedures, terms, and requirements for the service, they can be several pages long.

Who Needs a Professional Services Agreement?

Because PSAs tend to be detailed and lengthy, most organizations use them only when contracting a consultant to provide highly technical professional services. The “professional” aspect of a PSA can refer to two different definitions of the term:

  • Professional license: Service providers may have required business licenses that legally allow them to offer skilled services in a designated region.
  • Professional approach: Consultants may have specific qualifications, such as advanced certifications, a predetermined amount of high-level experience, or certain technical capabilities.

What Type of Services Can a PSA Cover?

Professional services typically cover intellectual deliverables rather than physical products. For example, a PSA wouldn't be appropriate for an organization providing manufacturing, labor, or construction services. However, your organization may need a PSA if you contract a consultant to provide services like:

  • Auditing
  • Cost estimation
  • Data analysis
  • Environmental studies
  • Laboratory analysis
  • Land surveys
  • Management consulting
  • Market research or analysis
  • Project or campaign planning
  • Program evaluation
  • Software development
  • Technical support
  • Translation
  • Web design or development
  • Writing or editing

Here is an article with more examples of professional services.

When Should You Use a Professional Services Agreement?

Most organizations use PSAs for projects with clearly defined requirements, such as limited time frames or specific tasks. However, some PSAs cover ongoing services that require advanced technical skills, certifications, or licenses. PSAs can even serve as blanket agreements that allow a business to contract a consultant or firm for a set period of time.

No matter what your PSA covers, your organization should always prepare one before starting to work with a consultant. By signing a PSA before services commence, you can establish the scope of the project, the workflow, the time frame, the rate, and other key details.


Get Free Bids to Compare

Leverage our network of lawyers, request free bids, and find the right lawyer for the job.

Get Bids Now

What Information Goes Into a Professional Services Agreement?

You can customize a PSA to include almost any necessary stipulations or protections. However, most PSAs include a few standard sections:

  • Purpose: States the general nature of the contract, such as the organization engaging the consultant to perform services as defined in an attached document, often labeled Schedule A
  • Services or Duties: An attached document often labeled Schedule A that includes a description of the project, the scope of the work, and the deliverables that the consultant will provide
  • Term: Specifies the start and end date of the PSA or the number of days, weeks, or months the agreement lasts
  • Timetable: An attached document often labeled Schedule B that includes the dates by which the consultant will reach major project milestones
  • Compensation: States the exact or maximum amount the organization agrees to pay the consultant and may include an attached document often labeled Schedule C that features a timetable for periodic payments
  • Personnel: An attached document often labeled Schedule D that lists the individual consultants who will provide the stated services
  • Relationship Between Parties: Establishes that the consultant remains an independent contractor and is not employed by the organization
  • Confidentiality: Confirms that the consultant agrees to keep any data or other information involved in the project confidential
  • Rights: Clarifies which party owns any data or intellectual property (IP) collected or produced as part of the project
  • Indemnification: Confirms whether the consultant or the organization can be held liable for any damages that arise from the project
  • Insurance: Lists the types of insurance coverage the consultant must have throughout the project, such as statutory workers' compensation, commercial general liability insurance, property insurance, automobile liability insurance, professional liability insurance, or crime insurance
  • Compliance: Maintains that the consultant will adhere to any federal, state, or local laws and regulations that apply to the project
  • Assignment: Confirms whether the consultant has the discretion to assign the agreement to another consultant or subcontractor
  • Termination: States how, when, and under what circumstances the organization can terminate the PSA as well as whether the consultant will continue to receive compensation

Professional services agreement

Image via Unsplash by sctgrhm

How Do a Professional Services Agreement and a Subcontract Differ?

Subcontracts and PSAs are both binding agreements that outline the services a firm or consultant will provide for another organization. However, an independent contractor or subcontractor carries out the services included in a subcontract, while a vendor provides the services detailed in a PSA.

A subcontractor:

  • Has a more involved business relationship with the organization
  • Takes responsibility for important decisions regarding the project
  • Is expected to reach performance goals related to the project
  • Must follow project-specific rules established by the organization
  • Receives payment for implementing a program or project
  • Provides ongoing services over a period of months or years

A vendor:

  • Provides services that aren't specific to a project or its unique requirements
  • Has a number of competitors who provide the same or similar services
  • Offers services that support the organization's programs
  • Is not required to meet performance goals or internal metrics

What Other Types of Business Agreements Do Consultants Need?

In addition to PSAs, consulting firms and independent consultants often need a range of contracts and legally binding documents. As a consultant, you may have to prepare:

  • Consulting Agreement: When consulting for another organization, many firms prepare a simple contract that states the scope of work, the time frame, and the consequences of breaching the agreement.
  • Limited Liability Company (LLC) Articles of Organization: If you start a consulting firm, you may opt to form an LLC. In most states, you have to file articles of organization to register your LLC with the Secretary of State. Many LLCs must also create an operating agreement, which is an internal document.
  • Nondisclosure Agreement: When working with confidential information, consultants often have to sign an NDA, preventing you from sharing proprietary information.

Do You Need an Attorney for a Professional Services Agreement?

Whether you need to customize a standard PSA or you want to create an agreement from scratch, it's important to have a lawyer draft the document. When you contract an attorney, you can benefit in a few key ways:

  • Language: An experienced attorney understands how to interpret legal terms and what language to include to create a legally binding agreement.
  • Customization: If you need to include an extra element like an NDA or a customized version of a standard component like a timetable, a lawyer can ensure that your PSA covers your unique project.
  • Protection: An attorney can make sure a PSA offers protection for both parties involved. Most PSAs protect consultants from liability while providing adequate compensation, and they ensure that organizations receive the services as stated.
  • Review: Before you sign the other party's PSA or agree to their requests to revise yours, a lawyer can review the document and ensure that it provides sufficient protection.

Here is an example of a standard PSA.

No matter what type of PSA you need, the ContractsCounsel team is at your service. Get a free proposal and take the first step toward creating a customized professional services agreement today.

Need help with a Professional Services Agreement?

Create a free project posting

Meet some of our Professional Services Agreement Lawyers

Steven S. on ContractsCounsel
View Steven
5.0 (9)
Member Since:
April 7, 2023

Steven S.

Attorney
Free Consultation
New York; Florida
43 Yrs Experience
Licensed in FL, NY
New York Law School

Steven Stark has more than 35 years of experience in business and commercial law representing start-ups as well as large and small companies spanning a wide variety of industries. Steven has provided winning strategies, valuable advice, and highly effective counsel on legal issues in the areas of Business Entity Formation and Organization, Drafting Key Business Contracts, Trademark and Copyright Registration, Independent Contractor Relationships, and Website Compliance, including Terms and Privacy Policies. Steven has also served as General Counsel for companies providing software development, financial services, digital marketing, and eCommerce platforms. Steven’s tactical business and client focused approach to drafting contracts, polices and corporate documents results in favorable outcomes at a fraction of the typical legal cost to his clients. Steven received his Juris Doctor degree at New York Law School and his Bachelor of Business Administration degree at Hofstra University.

Anjali S. on ContractsCounsel
View Anjali
5.0 (1)
Member Since:
July 15, 2020

Anjali S.

Counsel
Free Consultation
Orlando, FL
13 Yrs Experience
Licensed in CA, FL, NY
NYU School of Law

CA, NY, and FL licensed attorney with nearly a decade of experience in intellectual property, data privacy, commercial contracts, and employment. I also have both the CIPP/US and CIPP/E privacy credentials. Basically, everything your business needs!

Tim E. on ContractsCounsel
View Tim
4.9 (45)
Member Since:
August 12, 2020

Tim E.

Founding Member/Attorney
Free Consultation
Cleveland, OH
10 Yrs Experience
Licensed in OH
Cleveland-Marshall College of Law

Tim advises small businesses, entrepreneurs, and start-ups on a wide range of legal matters. He has experience with company formation and restructuring, capital and equity planning, tax planning and tax controversy, contract drafting, and employment law issues. His clients range from side gig sole proprietors to companies recognized by Inc. magazine.

Jason P. on ContractsCounsel
View Jason
5.0 (5)
Member Since:
December 1, 2022

Jason P.

Business Lawyer
Free Consultation
Portland, OR
8 Yrs Experience
Licensed in OR, WA
Lewis & Clark Law School

Jason is a self-starting, go-getting lawyer who takes a pragmatic approach to helping his clients. He co-founded Fortify Law because he was not satisfied with the traditional approach to providing legal services. He firmly believes that legal costs should be predictable, transparent and value-driven. Jason’s entrepreneurial mindset enables him to better understand his clients’ needs. His first taste of entrepreneurship came from an early age when he helped manage his family’s small free range cattle farm. Every morning, before school, he would deliver hay to a herd of 50 hungry cows. In addition, he was responsible for sweeping "the shop" at his parent's 40-employee HVAC business. Before becoming a lawyer, he clerked at the Lewis & Clark Small Business Legal Clinic where he handled a diverse range of legal issues including establishing new businesses, registering trademarks, and drafting contracts. He also spent time working with the in-house team at adidas® where, among other things, he reviewed and negotiated complex agreements and created training materials for employees. He also previously worked with Meriwether Group, a Portland-based business consulting firm focused on accelerating the growth of disruptive consumer brands and facilitating founder exits. These experiences have enabled Jason to not only understand the unique legal hurdles that can threaten a business, but also help position them for growth. Jason's practice focuses on Business and Intellectual Property Law, including: ​ -Reviewing and negotiating contracts -Resolving internal corporate disputes -Creating employment and HR policies -Registering and protecting intellectual property -Forming new businesses and subsidiaries -Facilitating Business mergers, acquisitions, and exit strategies -Conducting international business transactions ​​ In his free time, Jason is an adventure junkie and gear-head. He especially enjoys backpacking, kayaking, and snowboarding. He is also a technology enthusiast, craft beer connoisseur, and avid soccer player.

Evan F. on ContractsCounsel
View Evan
Member Since:
December 3, 2022

Evan F.

Attorney & Founding Member
Free Consultation
Livonia, MI
4 Yrs Experience
Licensed in MI
Wayne State University Law School

I am the Founding Member of Evan Ficaj Law Firm PLLC, and I am passionate about helping businesses launch, grow, and succeed. My law firm assists clients with business, contract, entertainment, IP, and estate planning matters.

Michael C. on ContractsCounsel
View Michael
Member Since:
December 5, 2022

Michael C.

Owner / Managing Attorney
Free Consultation
Staten Island, New York
12 Yrs Experience
Licensed in NJ, NY
Widener University Commonwealth Law School

We are business and immigration attorneys, committed to delivering compassion-driven and innovative legal solutions that better our clients' lives. Founded in 2019, Carbone Law provides legal services tailored to the unique needs of our clients. We pride ourselves in building a personable attorney-client relationship and are dedicated to establishing a complete understanding of our client’s legal issues, so that we can develop an effective plan for achieving their desired results. Michael T. Carbone, Esq. started Carbone Law with the goal of delivering exceptional legal services to his community. At Carbone Law, Michael counsels individuals and small businesses on a variety of legal issues. Whether aiding families in building successful applications for immigration benefits or advising freelancers and business owners on contract, governance and related issues and the complexities of complying with federal, state and local laws, Michael is committed to building a lasting relationship with his clients.

David C. on ContractsCounsel
View David
Member Since:
December 6, 2022

David C.

Attorney
Free Consultation
Cold Spring Harbor, NY
36 Yrs Experience
Licensed in NY
St. John's University School of Law

New York Business litigation attorney with corporate, securities and contracts experience.

Find the best lawyer for your project

Browse Lawyers Now

Professional Services Agreement

New York

Asked on Sep 28, 2021

Cease and Desist

I have received a cease and desisit a few months ago for procticing unlicensed massage. I have never done such. I am a Reiki Master Practitioner which has nothing to do with massage. Unbeknownst to me FL considers this massage!! This is ludacris. Whoever deemed Reiki as massage needs to do research. Now I've been placed into the National Practitioners Data base as a unlicensed massage therapist. I have no desire to practice massage. Please advise on how I can remedy this situation. Gratefully thankful for any direction.

Jane C.

Answered Oct 5, 2021

You will have to explain why the state of Florida is involved in this matter? I suggest you write a letter to National Practitioners Database to explain the matter clearly and provide proof of you licensing.

Read 1 attorney answer>
See more legal questions…

Need help with a Professional Services Agreement?

Create a free project posting
Business lawyers by top cities
See All Business Lawyers
Professional Services Agreement lawyers by city
See All Professional Services Agreement Lawyers

ContractsCounsel User

Recent Project:
Service provider contract/agreement
Location: Illinois
Turnaround: A week
Service: Drafting
Doc Type: Professional Services Agreement
Number of Bids: 5
Bid Range: $600 - $1,500

ContractsCounsel User

Recent Project:
Review PSA
Location: New York
Turnaround: Less than a week
Service: Contract Review
Doc Type: Professional Services Agreement
Page Count: 15
Number of Bids: 9
Bid Range: $400 - $2,400
related contracts
See More Contracts
other helpful articles

Need help with a Professional Services Agreement?

Create a free project posting

Want to speak to someone?

Get in touch below and we will schedule a time to connect!

Request a call

Find lawyers and attorneys by city