Law at the speed of business® Continuing Legal
Description: Law at the speed of business Continuing Legal Education Master Professional Services Agreements Common Topics Law at the speed of business Master Professional Services Agreement Overview Master Professional Services Agreement (MPSA)
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slide1. Law at the speed of business® Continuing Legal Education<br>
slide2. Master Professional Services Agreements
Common Topics Law at the speed of business®<br>
slide3. Master Professional Services Agreement Overview Master Professional Services Agreement (“MPSA”)
Term that is often used interchangeably with Master Services Agreement (“MSA”)
MPSA is long-form legal agreement where the parties mutually agree on terms and conditions that will apply to all projects defined in an SOW such as:
Warranties
Indemnification
Liability cap
Disclaimers
Remedies
Insurance
Payment terms
Governing law
Timelines
MPSA Purpose
Provide a legal framework so you don’t need to renegotiate for every project in the future whereas a Work Order/SOW represents the business terms under an MPSA for a project
Define the client and service provider’s mutual responsibilities
Allocate risk between the client and service provider<br>
slide4. Master Professional Services Agreement - Common Topics Session Scope This session will cover the most common topics associated with MPSAs from a buyer’s perspective.
Affiliate Ordering
Contractor Rates/Rate Cards
Payment Terms
IP Allocation
Open Source
Publicity
Data Security
Limitation of Liability and Indemnity
Reps and Warranties
Term and Termination
Transition Assistance Services
Exhibits and Client-Specific Policies<br>
slide5. Robert Reynolds Founder and CEO - Tangible
High stakes corporate lawyer for over 30 years
Highly recognized and award-winning business innovator
Former partner at multiple Am Law 100 law firms including Seyfarth as CEO of Technology Innovation and Alston & Bird
Leader of Six Sigma consulting practice
Graduated cum laude from the University of Virginia with a BS in Chemistry and JD from Vanderbilt University
Licensed in Oregon, District of Columbia, Georgia, Maryland, and Illinois Alex O’Sullivan-Pierce Attorney and Director of Legal Operations - Tangible
Business-focused attorney with experience representing clients in finance, athletic apparel, and technology industries
5+ years as outside counsel for Fortune 100 company with focus on technology transactions
MA in Education from City University of New York and JD from Brooklyn Law School and Lehman College
Graduated cum laude from the George Washington University with a BA in English Literature
Licensed in MA and NY Presenters<br>
slide6. MPSA Viewpoint: Buy-side Our hypothetical client | a large company buying professional services Representing a provider/seller of professional services | could be the same contract, but would have different focus for legal representation<br>
slide7. MPSA: In Scope Services<br>
slide8. MPSA & Work Order/SOW Agreement Structure Key Concept :
Establish a Master Professional Services Agreement that will serve as the overarching framework for all future engagements covered by Work Orders/SOWs between the parties One transaction, two agreements: Master and Order Form (aka Work Orders/SOWs) MPSAs are often evergreen and contain legal terms and conditions, e.g.: IP allocation, limitation of liability, reps and warranties, termination rights, indemnity, data privacy and security Work Orders/SOWs are generally fixed term and contain project-specific terms e.g.: project start/end date, pricing, description of services and deliverables Work Order Template included in Exhibits section of the MPSA<br>
slide9. Preamble Housekeeping Parties’ legal entity names, addresses and states of incorporation Effective date is on/before the intended start date of the proposed services On defined terms (e.g., “Customer” “Contractor” “Agreement”) For mistakes as they are often made in the first few lines of an agreement Confirm Ensure Focus Watch<br>
slide10. Affiliate Ordering Key Concept:
Purchaser’s affiliated companies (such as subsidiaries) should be able to enter Work Orders under the MPSA Purchaser generally remains liable for obligations of its Affiliates (i.e., payment) Focus on definition of Affiliate; sometimes it includes third parties:
contractors
consultants
employees of subsidiaries<br>
slide11. Contractor Rates/Rate Cards KEY CONCEPT:
Rate cards provide framework for future fees Including a rate card provides future pricing guarantees for short and long term Not necessary/reasonable for all MPSAs Discuss benefits with business client to determine if a rate card is necessary/reasonable for each agreement<br>
slide12. Payment Terms Key Concept:
Desired Terms typically are Net 30/60 days Commonly negotiated by Vendors seeking faster payment, especially smaller Vendors Purchaser’s business/finance stakeholders can accept 30/60/90 days depending on organization standards<br>
slide13. IP Allocation Key Concept:
Vendor owns all their preexisting IP; Purchaser often owns all IP for developments and deliverables that Vendor produces but Purchaser may consider leaving ownership with Vendor on a case-by-case basis Clarify if Vendor will be producing custom deliverables for Purchaser Pay close attention to definition of Developments and Deliverables as these often have IP terms<br>
slide14. Open Source Vendor should advise Purchaser of any plans to include Open-Source in development product Vendor and Purchaser need to work together to make sure that Purchaser ends up with appropriate licenses Note: there are several different groups of Open-Source licenses that are applicable for commercial use Key Concept:
Open-Source ownership is undefined<br>
slide15. Publicity Key Concept:
Protect Purchaser’s trademarks and brand by prohibiting Vendor from using (without permission) Purchaser’s name/logo/trademarks for Vendor’s own marketing purposes Some Purchasers may allow the use of their company’s name/logos by certain Vendors; ensure that this right is cleared with high-level stakeholders in Purchaser’s organization If you opt for a provision that allows for Vendor to obtain “written permission” for publicity, then add the requirement that the written permission come from “an officer of the Purchaser organization with the title of “Director or higher”<br>
slide16. Attention: CLE Credit Code If you are applying for CLE credit in a state that requires a certification code,
the certification code for this session is TANGIBLE_MPSA.<br>
slide17. Data Security Key Considerations: Data flow and how data is transferred or handled between Parties (e.g., is Purchaser data
ever stored in Vendor’s environment?)<br>
slide18. Limitation of Liability and Indemnity Vendors often seek to limit liability (“liability cap”); this is reasonable and acceptable so long as the Purchaser is protected by certain carve outs Common carve outs often include damages arising from Vendor’s obligations of confidentiality, indemnity, publicity, data security and bad acts Indemnity for third party claims is standard although it may be limited to events similar to the liability carve outs Key Concept:
Design appropriate risk management framework<br>
slide19. Reps and Warranties Vendor is
developing or providing a product Warranties should include performance; (in most cases) non-infringement; title; code quality; non back doors and the like Vendor is
providing hardware Remember to include warranty coverage for firmware that runs the hardware or is resident in the hardware Key Concept:
Be thoughtful in setting up to ensure coverage for appropriate transaction risks<br>
slide20. Exclusivity Key Concept:
Note that confidentiality and non-disclosure obligations will exist independently of exclusivity requirements Exclusivity clauses prohibit Vendors from working with Purchaser’s competitors Consider nature of service and if it is reasonable/necessary to require exclusivity Requirement can be relaxed by defining Purchaser competitors or limiting exclusivity to certain Vendor resources and/or for a limited period of time<br>
slide21. Term and Termination Key Concept:
Remember that Master Agreements are most often evergreen and will stay in effect unless a party takes action to terminate. Work Orders/SOWs are fixed term engagements with start and end dates depending on specific projects Don’t forget to define termination rights for Work Orders/SOWs Watch for hidden termination charges deep in a fee schedule or similar exhibit<br>
slide22. Transition Assistance Services For mission critical service or essential infrastructure Purchaser might wish to have a guarantee that Vendor will assist in transition to a new Vendor if required Guaranteed pricing for transition assistance service prevents “hostage taking” Not required or reasonable for all Vendors or services Key Concept:
Requires careful thought depending on Vendor’s services<br>
slide23. Exhibits and Client-Specific Policies Key Concept:
The following are highly client-specific:<br>
slide24. Core Principles: Master Professional Services Agreement Key Takeaways Remember:
MPSAs provide the legal framework so you don’t need to renegotiate for every project in the future, whereas an SOW represents the business terms for a project under the MPSA
Pay close attention to the MPSA topics identified in this session; they will apply to all services to be delivered under the MPSA over its term
Use session topics as a checklist<br>
slide25. Common Questions & Answers Law at the speed of business®<br>
slide26. Common Questions & Answers Q: What are the vital points in most MPSAs?
A: Exit rights, payment terms, and Vendor proposals Q: What is the right way to think about ownership of IP between Vendor and Purchaser?
A: Generally, allocation would be made based on Vendor’s core business i.e. Development Shop, or
Software/SaaS Company Q: What if the Vendor says your MPSA is too long?
A: Consult with Client, evaluate the business context and adjust the MPSA while preserving core principles<br>
slide27. CLE Credit Reminder To receive CLE Credit in Oregon, remember to:
Send your name and 6-digit BAR number to rturnage@tangibleltd.com (required for Tangible reporting purposes)
Log-in to your member dashboard at www.hello.osbar.org and add an activity to your transcript in MCLE reporting<br>
slide28. Thank you for attending this session.
Please join us for our next session: How To Draft & Negotiate Work Orders/SOWs IMPORTANT: Be sure to review notes and model templates before proceeding to the
How to Draft & Negotiate Work Orders/SOWs session found in the CLE section of the Tangible Resource Center. CLE #001: MPSA(Common Issues)07/21<br>
slide2. Master Professional Services Agreements
Common Topics Law at the speed of business®<br>
slide3. Master Professional Services Agreement Overview Master Professional Services Agreement (“MPSA”)
Term that is often used interchangeably with Master Services Agreement (“MSA”)
MPSA is long-form legal agreement where the parties mutually agree on terms and conditions that will apply to all projects defined in an SOW such as:
Warranties
Indemnification
Liability cap
Disclaimers
Remedies
Insurance
Payment terms
Governing law
Timelines
MPSA Purpose
Provide a legal framework so you don’t need to renegotiate for every project in the future whereas a Work Order/SOW represents the business terms under an MPSA for a project
Define the client and service provider’s mutual responsibilities
Allocate risk between the client and service provider<br>
slide4. Master Professional Services Agreement - Common Topics Session Scope This session will cover the most common topics associated with MPSAs from a buyer’s perspective.
Affiliate Ordering
Contractor Rates/Rate Cards
Payment Terms
IP Allocation
Open Source
Publicity
Data Security
Limitation of Liability and Indemnity
Reps and Warranties
Term and Termination
Transition Assistance Services
Exhibits and Client-Specific Policies<br>
slide5. Robert Reynolds Founder and CEO - Tangible
High stakes corporate lawyer for over 30 years
Highly recognized and award-winning business innovator
Former partner at multiple Am Law 100 law firms including Seyfarth as CEO of Technology Innovation and Alston & Bird
Leader of Six Sigma consulting practice
Graduated cum laude from the University of Virginia with a BS in Chemistry and JD from Vanderbilt University
Licensed in Oregon, District of Columbia, Georgia, Maryland, and Illinois Alex O’Sullivan-Pierce Attorney and Director of Legal Operations - Tangible
Business-focused attorney with experience representing clients in finance, athletic apparel, and technology industries
5+ years as outside counsel for Fortune 100 company with focus on technology transactions
MA in Education from City University of New York and JD from Brooklyn Law School and Lehman College
Graduated cum laude from the George Washington University with a BA in English Literature
Licensed in MA and NY Presenters<br>
slide6. MPSA Viewpoint: Buy-side Our hypothetical client | a large company buying professional services Representing a provider/seller of professional services | could be the same contract, but would have different focus for legal representation<br>
slide7. MPSA: In Scope Services<br>
slide8. MPSA & Work Order/SOW Agreement Structure Key Concept :
Establish a Master Professional Services Agreement that will serve as the overarching framework for all future engagements covered by Work Orders/SOWs between the parties One transaction, two agreements: Master and Order Form (aka Work Orders/SOWs) MPSAs are often evergreen and contain legal terms and conditions, e.g.: IP allocation, limitation of liability, reps and warranties, termination rights, indemnity, data privacy and security Work Orders/SOWs are generally fixed term and contain project-specific terms e.g.: project start/end date, pricing, description of services and deliverables Work Order Template included in Exhibits section of the MPSA<br>
slide9. Preamble Housekeeping Parties’ legal entity names, addresses and states of incorporation Effective date is on/before the intended start date of the proposed services On defined terms (e.g., “Customer” “Contractor” “Agreement”) For mistakes as they are often made in the first few lines of an agreement Confirm Ensure Focus Watch<br>
slide10. Affiliate Ordering Key Concept:
Purchaser’s affiliated companies (such as subsidiaries) should be able to enter Work Orders under the MPSA Purchaser generally remains liable for obligations of its Affiliates (i.e., payment) Focus on definition of Affiliate; sometimes it includes third parties:
contractors
consultants
employees of subsidiaries<br>
slide11. Contractor Rates/Rate Cards KEY CONCEPT:
Rate cards provide framework for future fees Including a rate card provides future pricing guarantees for short and long term Not necessary/reasonable for all MPSAs Discuss benefits with business client to determine if a rate card is necessary/reasonable for each agreement<br>
slide12. Payment Terms Key Concept:
Desired Terms typically are Net 30/60 days Commonly negotiated by Vendors seeking faster payment, especially smaller Vendors Purchaser’s business/finance stakeholders can accept 30/60/90 days depending on organization standards<br>
slide13. IP Allocation Key Concept:
Vendor owns all their preexisting IP; Purchaser often owns all IP for developments and deliverables that Vendor produces but Purchaser may consider leaving ownership with Vendor on a case-by-case basis Clarify if Vendor will be producing custom deliverables for Purchaser Pay close attention to definition of Developments and Deliverables as these often have IP terms<br>
slide14. Open Source Vendor should advise Purchaser of any plans to include Open-Source in development product Vendor and Purchaser need to work together to make sure that Purchaser ends up with appropriate licenses Note: there are several different groups of Open-Source licenses that are applicable for commercial use Key Concept:
Open-Source ownership is undefined<br>
slide15. Publicity Key Concept:
Protect Purchaser’s trademarks and brand by prohibiting Vendor from using (without permission) Purchaser’s name/logo/trademarks for Vendor’s own marketing purposes Some Purchasers may allow the use of their company’s name/logos by certain Vendors; ensure that this right is cleared with high-level stakeholders in Purchaser’s organization If you opt for a provision that allows for Vendor to obtain “written permission” for publicity, then add the requirement that the written permission come from “an officer of the Purchaser organization with the title of “Director or higher”<br>
slide16. Attention: CLE Credit Code If you are applying for CLE credit in a state that requires a certification code,
the certification code for this session is TANGIBLE_MPSA.<br>
slide17. Data Security Key Considerations: Data flow and how data is transferred or handled between Parties (e.g., is Purchaser data
ever stored in Vendor’s environment?)<br>
slide18. Limitation of Liability and Indemnity Vendors often seek to limit liability (“liability cap”); this is reasonable and acceptable so long as the Purchaser is protected by certain carve outs Common carve outs often include damages arising from Vendor’s obligations of confidentiality, indemnity, publicity, data security and bad acts Indemnity for third party claims is standard although it may be limited to events similar to the liability carve outs Key Concept:
Design appropriate risk management framework<br>
slide19. Reps and Warranties Vendor is
developing or providing a product Warranties should include performance; (in most cases) non-infringement; title; code quality; non back doors and the like Vendor is
providing hardware Remember to include warranty coverage for firmware that runs the hardware or is resident in the hardware Key Concept:
Be thoughtful in setting up to ensure coverage for appropriate transaction risks<br>
slide20. Exclusivity Key Concept:
Note that confidentiality and non-disclosure obligations will exist independently of exclusivity requirements Exclusivity clauses prohibit Vendors from working with Purchaser’s competitors Consider nature of service and if it is reasonable/necessary to require exclusivity Requirement can be relaxed by defining Purchaser competitors or limiting exclusivity to certain Vendor resources and/or for a limited period of time<br>
slide21. Term and Termination Key Concept:
Remember that Master Agreements are most often evergreen and will stay in effect unless a party takes action to terminate. Work Orders/SOWs are fixed term engagements with start and end dates depending on specific projects Don’t forget to define termination rights for Work Orders/SOWs Watch for hidden termination charges deep in a fee schedule or similar exhibit<br>
slide22. Transition Assistance Services For mission critical service or essential infrastructure Purchaser might wish to have a guarantee that Vendor will assist in transition to a new Vendor if required Guaranteed pricing for transition assistance service prevents “hostage taking” Not required or reasonable for all Vendors or services Key Concept:
Requires careful thought depending on Vendor’s services<br>
slide23. Exhibits and Client-Specific Policies Key Concept:
The following are highly client-specific:<br>
slide24. Core Principles: Master Professional Services Agreement Key Takeaways Remember:
MPSAs provide the legal framework so you don’t need to renegotiate for every project in the future, whereas an SOW represents the business terms for a project under the MPSA
Pay close attention to the MPSA topics identified in this session; they will apply to all services to be delivered under the MPSA over its term
Use session topics as a checklist<br>
slide25. Common Questions & Answers Law at the speed of business®<br>
slide26. Common Questions & Answers Q: What are the vital points in most MPSAs?
A: Exit rights, payment terms, and Vendor proposals Q: What is the right way to think about ownership of IP between Vendor and Purchaser?
A: Generally, allocation would be made based on Vendor’s core business i.e. Development Shop, or
Software/SaaS Company Q: What if the Vendor says your MPSA is too long?
A: Consult with Client, evaluate the business context and adjust the MPSA while preserving core principles<br>
slide27. CLE Credit Reminder To receive CLE Credit in Oregon, remember to:
Send your name and 6-digit BAR number to rturnage@tangibleltd.com (required for Tangible reporting purposes)
Log-in to your member dashboard at www.hello.osbar.org and add an activity to your transcript in MCLE reporting<br>
slide28. Thank you for attending this session.
Please join us for our next session: How To Draft & Negotiate Work Orders/SOWs IMPORTANT: Be sure to review notes and model templates before proceeding to the
How to Draft & Negotiate Work Orders/SOWs session found in the CLE section of the Tangible Resource Center. CLE #001: MPSA(Common Issues)07/21<br>