Service Level Agreement

Clients Rate Lawyers on our Platform 4.9/5 Stars
based on 4,123 reviews

Jump to Section

Need help with a Service Level Agreement?

Post Project Now

Post Your Project (It's Free)

Get Bids to Compare

 Hire Your Lawyer

What Is a Service-Level Agreement?

A service-level agreement (SLA) is a contract between a provider and the end user that states the level of service that the customer should expect from that service provider. That said, they also serve a company's internal operations as well. They're frequently used when a company is signing up new customers for a service.

In the event that the service-level agreement is between the marketing and sales departments, the SLA will detail the company's sales and marketing goals, such as the number of leads it intends to generate monthly and the action that the sales department will take to support the marketing department's efforts.

Why Service-Level Agreements Are Important?

A service-level agreement is important because it:

  • Protects both parties: The SLA sets standards for the service, ensuring both the service provider and end user are on the same page with expectations. By creating clear, measurable guidelines, the end user knows exactly what to expect and what the responsibilities are for everyone involved.
  • Provides recourse for unmet expectations: The SLA provides specific consequences for what will happen if a service provider fails to meet its obligations to the end user. Without the SLA, it's unclear what will happen if one or both parties fail to meet expectations. With a service-level agreement in place, there is transparency about what the targets are for each of the service levels and what will happen if they're unmet.
  • Gives peace of mind: The SLA gives the end user peace of mind knowing they can hold their service provider accountable for the service they committed to at the time of the agreement.

Types of Service-Level Agreements

There are three basic types of service-level agreements:

Customer Service-Level Agreement

This type of SLA is between a business and a customer. It's also referred to as an external service agreement. It includes:

  • Specifics of the service the customer will receive
  • Conditions of the service availability
  • Standards for the time windows of each service level, if applicable
  • Responsibilities of each of the parties
  • Escalation procedures
  • Cancellation terms

Internal Service-Level Agreement

This is when a company has a service-level agreement in place internally, between its marketing and sales departments. For example, the sales team may have a goal of earning $10,000 in sales per month. If they know that each sale is worth $500 and they know that they have a closing rate of 20%, then they know they need to receive at least 100 qualified leads per month from the marketing department.

The two departments could put an SLA in place where the marketing department commits to delivering a minimum of 100 leads each month by a certain date. Part of the agreement could include sending weekly reports to the sales department to ensure the teams are on pace to hit their monthly goals.

Multi-Level Service-Level Agreement

This type of SLA outlines what's expected of the different parties when there is more than just one end user or one service provider. You could use this as a way to support customers or as part of an operations strategy. For example, your marketing and sales departments could also include the customer service team as part of the SLA to incorporate customer retention into the agreement.


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 Is Included in a Service-Level Agreement?

Here is a look at the different information that goes into a service-level agreement:

  • Summary of agreement : Your SLA typically contains a summary of the service, who is receiving the service, and how the success of the service is going to be measured.
  • Goals of the parties: For an external SLA between a business and customer, the goals that are included in the agreement will typically be those of the customer. Your company should include measurable goals that it can regularly attain for its customer. If the SLA is internal, then the goals for all parties should be outlined.
  • Description of what's needed to reach goals: The SLA should include descriptions of what each of the parties in the agreement need to achieve their goals. This could include things like technical maintenance, consulting, or reporting. If you're putting together an internal SLA, it should describe what the different departments need from one another to reach their goals.
  • Reporting procedure: The SLA should include how and to whom any problems should be reported and what the reporting process should be.
  • Consequences: The SLA should always state what the consequence will be if the specified goal isn't met. As an example, your company could issue service credits or other forms of compensation.
  • Termination circumstances: Finally, the SLA should contain formal conditions for which the parties could terminate the agreement in pursuit of a better one. This could happen to an internal SLA, for example, if the SLA you put together isn't getting the buy-in you need from all parties involved or if you're frequently missing those goals.

Image via Unsplash by chrisliverani

Service-Level Agreement vs. Key Performance Indicator

A key performance indicator (KPI) is a tool for measuring how well a business is performing in light of its strategic goals. A KPI can help a business identify areas where the organization is veering off track from its primary objectives.

The SLA outlines what the customer will receive and what they should expect from their service provider. It does, however, include measurements for evaluating the service provider's performance, which is where there can be overlaps between KPIs and SLAs. A service-level agreement defines KPIs in order to measure service performance. This means that, in the end, the metrics provided by the SLA become KPIs that the business will monitor and report on as measurements of success.

Choosing Metrics for a Service-Level Agreement

It can be challenging to choose metrics that are fair for all parties involved. However, it's best to choose performance metrics that:

  • Are within the control of the service provider.
  • Can be collected easily and accurately.
  • Can be collected automatically, if possible.

It's also important to specify a reasonable baseline for the metrics, or a number that the company commits to hitting at the very least. This baseline can be shifted as more data is collected, and the service provider better understands what's possible for the client.

Service-Level Agreement Templates

Here are some service-level agreement templates that you can use to define the service you will offer end users:

A service-level agreement is essential for protecting a company and ensuring it maintains a good relationship with end users. By reaching a clear understanding of what standards are important and what the consequences will be if those standards aren't met, you can ensure that the relationship will be positive for all parties involved.

It's also a good idea to review your SLA as your business changes and grows, as the SLA should reflect its evolving needs and capabilities. If you need help creating a service-level agreement or would like to revisit one that you currently have in place, Contracts Counsel can help. We are happy to connect you with a fully-vetted lawyer who can help you create or review your service-level agreement. Contact us today to get started.

How ContractsCounsel Works
Hiring a lawyer on ContractsCounsel is easy, transparent and affordable.
1. Post a Free Project
Complete our 4-step process to provide info on what you need done.
2. Get Bids to Review
Receive flat-fee bids from lawyers in our marketplace to compare.
3. Start Your Project
Securely pay to start working with the lawyer you select.

Meet some of our Service Level Agreement Lawyers

Craig M. on ContractsCounsel
View Craig
5.0 (3)
Member Since:
August 2, 2021

Craig M.

Attorney
Free Consultation
Maine
7 Yrs Experience
Licensed in ME
New York Law School

I have been practicing law for more than 4 years at a small firm in York County, Maine. I recently decided to hang my shingle, Dirigo Law LLC. My practice focuses mostly on Real Estate / Corporate transactions, Wills, Trusts, and Probate matters.

Melissa G. on ContractsCounsel
View Melissa
5.0 (1)
Member Since:
August 5, 2021

Melissa G.

Owner/Managing Member
Free Consultation
Chicago
19 Yrs Experience
Licensed in DC, IL, OH
University of Michigan

Melissa Green recently opened her own law firm which focuses on providing general counsel subscription services (think of it as your attorney "on-call"), business formation services, and contract services (including review and mark-up, custom contracts, templates, and negotiation assistance). Prior to opening her own firm, Melissa joined the American Medical Association (AMA) as an Assistant General Counsel in November 2019. In her role at the AMA, Melissa supported the CPT and Masterfile licensing programs, in addition to supporting the legal needs of the Professional Satisfaction and Practice Sustainability business unit. Prior to arriving at the AMA, Melissa was the Chief Legal Counsel and Privacy Officer at The Chartis Group, a healthcare advisory services and analytics company, headquartered in Chicago, where she was responsible for commercial transactions for Chartis and its wholly owned SaaS company, and also served as the organization’s privacy officer responsible for HIPAA compliance. Melissa started her legal career in Cincinnati, Ohio at the law firm of Frost Brown Todd where she served as an associate in the Corporate department doing healthcare transactions, securities, and general corporate work. In 2007, Melissa transitioned into her first in-house counsel role at GE Aviation. During her time at GE, she had many roles including supporting new engine sales transactions for the Europe/Middle East/Africa region, its Electric Power business located in Dayton, its Engine Services business (supporting the CF34 and CF6 engine lines), and compliance. Upon leaving GE, Melissa had a brief stint at MedStar in Virginia before accepting a full-time position at the University of Maryland Medical System in Baltimore, Maryland in July 2013. Originally from East Lansing, Michigan, Melissa received her bachelor’s graduate from Michigan State University’s – James Madison College and is a graduate of the University of Michigan Law School.

Sam W. on ContractsCounsel
View Sam
Member Since:
July 30, 2021

Sam W.

Entertainment attorney
Free Consultation
Los Angeles
9 Yrs Experience
Licensed in CA
Columbus School of Law, The Catholic University of America

Entertainment attorney and film producer. Counsel clients on all matter of entertainment-related contracts, including talent representation, crew deals, financing agreements, and production legal. Former litigation attorney and owner of a documentary and scripted film and television production company. Well versed in small business foundation and general business contracts.

Robert D. on ContractsCounsel
View Robert
Member Since:
August 3, 2021

Robert D.

Solo Practitioner
Free Consultation
Cincinnati, OH
29 Yrs Experience
Licensed in DC, NY
University North Carolina Chapel Hill School of Law

Robert is a skilled corporate lawyer, licensed to practice law in NY and DC. He has over 25 years of experience, with a focus on Venture Capital, Private Equity, M&A, General Business Law and Company Formation. Robert brings business side experience to every legal transactions. This allows him to shape a client's legal needs around its business goals to drive success in an effective and efficient manner.

Tim M. on ContractsCounsel
View Tim
Member Since:
August 3, 2021

Tim M.

Managing Partner
Free Consultation
Cambridge, MA
25 Yrs Experience
Licensed in MA, NY
Boston College Law School

Tim has 20 years of experience representing a wide variety of emerging and established companies in the technology, software, bitcoin and professional services industries. He works directly with his clients’ executives and boards of directors on corporate, intellectual property, and securities law issues. Recently, Tim has advised clients on Series A and Series B financings, corporate structuring, complex video licensing agreements, and structuring new hedge funds. Tim previously served as Forrester Research, Inc.’s General Counsel and Secretary where he was chief legal officer, led the company’s legal group, and managed the company’s legal and regulatory affairs. Tim played an integral role in the company’s initial public offering in 1997 and coordinated its secondary offering in 2000. He directed the legal process in the company’s acquisitions of Giga Information Group, Inc., Fletcher Research and Forit GmbH and oversaw over $125million in transactions. He also managed the company’s intellectual property assets. Tim is admitted to practice in Massachusetts and New York. Tim holds a Juris Doctor degree from the Boston College Law School and a Bachelor of Arts degree from Trinity College

Spencer W. on ContractsCounsel
View Spencer
Member Since:
August 4, 2021

Spencer W.

Partner
Free Consultation
New York
12 Yrs Experience
Licensed in NY
Columbia Law School

I’m a New York based attorney with substantial experience in media and art law, corporate structuring and commercial contracts. For the past several years, I have been advising startups and new business on their legal needs, with a special focus on tech and entertainment.

Robert Jay H. on ContractsCounsel
View Robert Jay
Member Since:
August 5, 2021

Robert Jay H.

Owner
Free Consultation
New York, NY
42 Yrs Experience
Licensed in NY
New York University School of Law

My Legal career hasfocused on representing businesses (corporations and limited liability companies) as general outside counsel. In this capacity, I have drafted a broad range of legal documents as well as analyzed proposed agreements drafted by the other party's attorney to the agreement for the pupose of determining the risks to which my client would be exposed. I maintained the client's minute book if no one in-house was available for that task. Additionally, if rquested, I served as a general advisor to the client's executive offers and to its Board of Directors.

Find the best lawyer for your project

Browse Lawyers Now

Want to speak to someone?

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

Request a call