ContractsCounsel Logo
Home Types of Contracts Shared Services Contract

Jump to Section

ContractsCounsel has assisted 299 clients with shared services contracts and maintains a network of 185 business lawyers available daily. These lawyers collectively have 41 reviews to help you choose the best lawyer for your needs.

A shared services contract is a lawfully binding agreement between two or more parties, generally within the same organization or among different companies. These agreements specify the terms and conditions governing the essential provision of shared services, such as human resources, IT support, finance, procurement, or other managerial functions. This blog post will discuss a shared services contract, exploring its key components, advantages, and possible challenges.

Key Components of a Shared Services Contract

In the globalized business landscape, shared services contracts have become increasingly popular for optimizing resources, improving operational efficiency, and reducing costs. Successful collaborations require a comprehensive shared services contract clearly outlining all parties' key components and expectations. Below are the essential elements of a shared services contract and their importance in fostering productive partnerships.

  • Clear Objectives and Scope: The shared services contract should commence by clearly defining the objectives and scope of the shared services arrangement. This section specifies the services to be shared, the intended benefits, and the contract's duration. In addition, by establishing a common understanding of the project's purpose and limitations, potential misunderstandings can be minimized, enabling effective planning and implementation.
  • Roles and Responsibilities: Defining the roles and responsibilities of each participating entity is essential for a shared services contract. This section outlines the tasks, functions, and deliverables expected from each party. It also specifies performance metrics and key performance indicators (KPIs) to assess the quality and promptness of service needs. Thorough knowledge of roles ensures accountability and helps avoid repetition or voids in service delivery.
  • Service Level Agreements (SLAs): Service level agreements play a fundamental role in shared services contracts, defining the expected quality and quantity of services. SLAs outline service parameters, response times, error rates, and performance benchmarks. These agreements establish mutual expectations, ensuring the shared services meet the required standards. Regular monitoring and periodic SLA review to promote continuous improvement and maintain service excellence.
  • Governance and Decision-Making: Effective governance mechanisms are vital to the success of shared services contracts. This contract section defines the decision-making processes, escalation procedures, and governance structure. It outlines how conflicts and disputes will be resolved and ensures the involvement of relevant stakeholders in decision-making. By establishing a robust governance framework, shared services contracts can effectively address operational challenges and promote collaborative decision-making.
  • Data Security and Confidentiality: Shared services contracts often involve exchanging and processing sensitive information. It is imperative to incorporate robust data security and privacy clauses in the shared services contract to safeguard this data and maintain confidentiality. This section outlines the measures, protocols, and standards all parties must adhere to. It may include provisions like access controls, data encryption, data retention policies, and compliance with appropriate data protection laws.
  • Performance Measurement and Reporting: Shared services contracts should include performance measurement and reporting mechanisms to ensure transparency and accountability. This section outlines the frequency, format, and content of performance reports to be submitted by each participating entity. It enables the evaluation of service quality, adherence to SLAs, and identification of areas for improvement. Regular performance reviews facilitate informed decision-making and continuous enhancements to the shared service arrangement.
  • Change Management and Flexibility: Shared services contracts should account for the dynamic nature of business environments. This section outlines the processes and protocols for managing service changes, requirements, or circumstances. It defines how changes will be communicated, evaluated, and implemented while considering the impact on existing operations. Flexibility and adaptability are essential to maintain the relevance and effectiveness of shared service contracts in evolving business landscapes.

Benefits of Shared Services Contract

Below are the numerous benefits of implementing shared services contracts that emphasize their potential to revolutionize enterprise operations.

  • Higher Cost Efficiency: Shared services contracts offer a substantial advantage in driving cost efficiency. They accomplish this by consolidating functions and pooling resources, leading to economies of scale and eliminating monotonies. When common functions such as HR, finance, IT, procurement, or customer service are centralized, organizations can leverage specialized expertise, reduce duplicate efforts, and optimize resource allocation. As a result, operational expenses are greatly reduced, improving profit margins and economic stability.
  • Standardization and Best Practices: Organizations can benefit from shared services contracts by standardizing processes and implementing best practices across different departments or business units. Standardized workflows, policies, and procedures can be established by centralizing functions, promoting consistency and efficiency. Shared service expertise enables companies to identify and implement industry-leading practices, enhancing overall performance and service quality. Standardization facilitates knowledge sharing and collaboration across different functions, driving innovation and continuous organizational improvement.
  • Scalability and Flexibility: Shared services contracts provide unparalleled scalability and flexibility, particularly for rapidly growing or geographically dispersed organizations. Shared service providers can quickly adapt and allocate resources as business needs evolve. Whether it involves scaling up to meet increased demand or downsizing during periods of reduced activity, shared services contracts allow organizations to optimize resource allocation without incurring major costs. This flexibility enhances agility and enables businesses to respond rapidly to market changes or internal restructuring efforts.
  • Focus on Core Competencies: Companies can outsource non-core functions through shared services contracts and redirect their internal resources and expertise toward core competencies. Employees can focus on strategic initiatives that drive business growth and innovation instead of dedicating valuable time and energy to routine administrative tasks or support functions. This increased emphasis on core competencies fosters specialization, improves employee satisfaction, and strengthens the organization's competitive advantage.
  • Improved Service Quality: Shared services contracts have the potential to substantially enhance service quality by capitalizing on specialized expertise and dedicated resources. Centralizing functions allows for establishing centers of excellence, where skilled professionals focus solely on delivering exceptional services to internal stakeholders. Shared service providers can invest in state-of-the-art technologies, instruments, and systems that facilitate operations, improve efficiency, and deliver exceptional service. Ultimately, improved service quality benefits both internal stakeholders and external customers, enhancing overall brand reputation and customer satisfaction.
  • Enhanced Data and Analytics Capabilities: In the age of data-driven decision-making, shared services contracts unlock the potential of advanced analytics and reporting. By centralizing data collection, analysis, and reporting, organizations gain access to comprehensive insights and business intelligence. Shared service providers can leverage data to identify trends, uncover inefficiencies, and generate actionable recommendations for process improvements and cost savings.
Meet some lawyers on our platform

Sarah S.

35 projects on CC
CC verified
View Profile

Daniel R.

153 projects on CC
CC verified
View Profile

Zachary J.

388 projects on CC
CC verified
View Profile

Tabetha H.

36 projects on CC
CC verified
View Profile

Key Terms for Shared Services Contracts

  • Service Scope: A comprehensive definition of the specific services and tasks that will be divided among the participating entities, encompassing details including service levels, deliverables, and timelines.
  • Established Framework: Established framework outlines the roles, responsibilities, decision-making processes, and communication channels for effectively managing the shared service arrangement.
  • Undertaking Agreements: Written contracts that outline the expected performance levels, quality standards, response times, and other quantifiable metrics to ensure satisfactory service delivery meets the requirements of all parties involved.
  • Expense Allocation: The approach used to determine and distribute the costs associated with the shared services among the participating entities, typically based on factors like usage, headcount, or revenue.
  • Termination and Transition Plan: Procedures and conditions for ending or modifying the shared services contract, including provisions for smoothly transitioning services back to individual entities or identifying alternative solutions.

Final Thoughts on Shared Services Contracts

Shared services contracts present numerous advantages that empower companies to optimize operations and drive business growth. From financial savings and cost reduction to enhanced focus on core competencies, improved service quality, and flexibility, shared services contracts allow companies to leverage external expertise, streamline operations, and accomplish operational excellence.

If you want free pricing proposals from vetted lawyers that are 60% less than typical law firms, click here to get started. By comparing multiple proposals for free, you can save the time and stress of finding a quality lawyer for your business needs.


ContractsCounsel is not a law firm, and this post should not be considered and does not contain legal advice. To ensure the information and advice in this post are correct, sufficient, and appropriate for your situation, please consult a licensed attorney. Also, using or accessing ContractsCounsel's site does not create an attorney-client relationship between you and ContractsCounsel.


Need help with a Shared Services Contract?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,582 reviews

Meet some of our Shared Services Contract Lawyers

Steven S. on ContractsCounsel
View Steven
5.0 (19)
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.

Michael K. on ContractsCounsel
View Michael
5.0 (51)
Member Since:
June 28, 2021

Michael K.

Associate Counsel
Free Consultation
Miami, FL
6 Yrs Experience
Licensed in FL
St. Thomas University School of Law

A business-oriented, proactive, and problem-solving corporate lawyer with in-house counsel experience, ensuring the legality of commercial transactions and contracts. Michael is adept in reviewing, drafting, negotiating, and generally overseeing policies, procedures, handbooks, corporate documents, and more importantly, contracts. He has a proven track record of helping lead domestic and international companies by ensuring they are functioning in complete compliance with local and international rules and regulations.

Jeremiah C. on ContractsCounsel
View Jeremiah
5.0 (49)
Member Since:
March 5, 2021

Jeremiah C.

Partner/Attorney at Law
Free Consultation
Houston
16 Yrs Experience
Licensed in NV, TX
Thomas Jefferson

Creative, results driven business & technology executive with 24 years of experience (15+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.

Roman V. on ContractsCounsel
View Roman
5.0 (1)
Member Since:
July 10, 2021

Roman V.

Trademark Attorney
Free Consultation
Milwaukee, WI
10 Yrs Experience
Licensed in MD
Marquette University Law School

I'm an experienced trademark attorney and enjoy helping clients protect and grow their brand names through trademark registration and enforcement. I've worked with a wide variety of clients in different industries, including e-commerce, software as a service (SaaS), and consumer goods, to register trademarks for product names, logos, and slogans, both in the US and abroad.

Justin A. on ContractsCounsel
View Justin
5.0 (10)
Member Since:
July 7, 2021

Justin A.

Partner
Free Consultation
Seattle, WA
7 Yrs Experience
Licensed in NY, WA
The University of Chicago Law School

I am a lawyer who helps small businesses, nonprofits, and startups with a wide variety of agreements, corporate formation, and corporate governance. ​ I earned my BA from Tulane University and my JD from the University of Chicago Law School. Before starting my own practice, I worked at an international law firm in New York City. ​ Outside of work, I am on the board of the nonprofit Seattle REconomy (which runs the NE Seattle and Shoreline tool libraries) and I enjoy gardening, baking bread, and outdoor activities with my spouse and two dogs.

Daniel R. on ContractsCounsel
View Daniel
Member Since:
July 1, 2021

Daniel R.

Managing Attorney
Free Consultation
Chicago
11 Yrs Experience
Licensed in IL
Gonzaga School of Law

Daniel is an experienced corporate attorney and works closely with corporations, privately held companies, high-net worth individuals, family offices, start-ups and entrepreneurs. Daniel graduated from the Gonzaga University School of Law and is licensed to practice law in Illinois.

Find the best lawyer for your project

Browse Lawyers Now

Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.

View Trustpilot Review

Need help with a Shared Services Contract?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,582 reviews
Business lawyers by top cities
See All Business Lawyers
Shared Services Contract lawyers by city
See All Shared Services Contract Lawyers

ContractsCounsel User

Recent Project:
General Service Agreement
Location: North Carolina
Turnaround: Less than a week
Service: Contract Review
Doc Type: Service Agreement
Page Count: 8
Number of Bids: 2
Bid Range: $200 - $700

ContractsCounsel User

Recent Project:
Create Short Form Services Agreement
Location: Virginia
Turnaround: Less than a week
Service: Drafting
Doc Type: Service Agreement
Number of Bids: 4
Bid Range: $750 - $1,500

Need help with a Shared Services Contract?

Create a free project posting
Clients Rate Lawyers 4.9 Stars
based on 11,582 reviews

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