Professional Services Agreement: A Basic Guide

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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:

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:

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.

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:

Professional services agreement

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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.

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:

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:

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.

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.

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Scott S.

Free Consultation Member Since:
July 28, 2020

Scott S.

Free Consultation New York, NY 43 Yrs Experience Licensed in NY New York University School of Law

I have over 25 years' experience representing individual and company clients, large and small, in transactions such as mergers and acquisitions, private offerings of securities, commercial loans and commercial endeavors (supply contracts, manufacturing agreements, joint ventures, intellectual property licenses, etc.). My particular specialty is in complex and novel drafting.

Damien B.

Managing Attorney Free Consultation Member Since:
October 3, 2023

Damien B.

Managing Attorney Free Consultation Long Island City, New York 23 Yrs Experience Licensed in NY Brooklyn Law School

Leonid G.

Free Consultation Member Since:
February 22, 2024

Leonid G.

Free Consultation Baton Rouge, LA 6 Yrs Experience Licensed in LA, MA, NY New York University School of Law

I have been practicing law since 2018. I used to be a litigator at a nationwide practice before going in-house at a fintech company. I have experience drafting NDAs, SaaS contracts, service agreements, and stock purchase agreements.

Alex P.

Free Consultation Member Since:
September 4, 2022

Alex P.

Free Consultation Los Angeles 25 Yrs Experience Licensed in CA Pepperdine Law School

Managing partner at Patel & Almeida and has over 22 years of experience assisting clients in the areas of intellectual property. business, employment, and nonprofit law.

Tiffanie W.

Free Consultation Member Since:
September 8, 2022

Tiffanie W.

Free Consultation 5 Yrs Experience Licensed in FL Florida Coastal School of Law

Tiffanie Wilson is a business transactions and personal injury lawyer. She helps clients realize their business goals by expertly drafting contracts, providing sound legal advice, and working for justice for injured clients.

Daniel F.

Free Consultation Member Since:
September 6, 2022

Daniel F.

Free Consultation Woodmere, NY 14 Yrs Experience Licensed in NJ, NY St. Johns School of Law

An experienced attorney with a varied range of legal abilities. Focusing on real estate transactions and general commercial litigation.

Doug F.

Managing Director Free Consultation Member Since:
September 7, 2022

Doug F.

Managing Director Free Consultation 42 Yrs Experience Licensed in MA, NY Boston University School of Law

Doug has over 20 years of private and public company general counsel experience focusing his legal practice on commercial transactions including both software and biotech. He is a tech savvy, business savvy lawyer who is responsive and will attain relationship building outcomes with your counterparty while effectively managing key risks and accelerating revenue. He received his Juris Doctor from Boston University School of Law earning the Book Award in Professional Ethics and after graduation he taught legal writing there for a number of years. Prior to law school, Doug earned a M.A in Mathematics at the State University of New York at Stony Brook, and a B.S in Honors Mathematics at Purdue University. After law school, Doug joined Fish & Richardson, where his practice focused on licensing software, trademarks and biotech. While at Fish & Richardson Doug authored a book on software licensing published by the American Intellectual Property Lawyers Association. Later he joined as General Counsel at FTP Software and led an IPO as well as corporate development. Doug has broad experience with a broad range of commercial agreement drafting and negotiation including SaaS software and professional services, distribution and other channel agreements, joint venture and M&A. Doug continued his leadership, corporate governance and commercial transaction practice at Mercury Computers (NASDAQ:MRCY) leading corporate development. Doug’s experience ranges from enterprise software to biotech and other vertical markets. He joined the board of Deque Systems in 2009 and joined in an operating role as President in 2020 successfully scaling the software business.

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Professional Services Agreement

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.