A Professional Services Agreement sets the parameters for work to be done by a highly skilled professional contractor. Professional services are available in legal, accounting, IT, cybersecurity, and more. They involve a licensed or otherwise accredited and experienced worker performing an activity in a subject matter requiring specific education and expertise.
Considering the extensive range of potential professional services a company may hire and the differences between each, an agreement can clarify the work needed and its terms. Using a professional services agreement ensures the inclusion of every potential item, including work description, timeline, compensation, and more.
Why Use
- Outline the type of work the professional service provider is responsible for.
- Provide examples of specific tasks their work may include.
- Covers when, how, and how much will be compensated.
- Clearly shows the expected turnaround times for their advice or completed tasks.
What Is a Professional Services Contractor?
A professional services contractor is an independent expert in a specific niche who provides services requiring their skillset. The professional often maintains a local, state, or federal government license to deliver work within their field. Otherwise, they will have equivalent experience, advanced certifications, or technical skills proving their ability to perform the needed work.
Examples of Professional Services
Professional services span across a wide variety of fields and include skilled experts like:
- Lawyers
- Accountants, tax auditors, and investment managers
- IT managers and cybersecurity experts
- Management and leadership consultants
- Market researchers and data analysts
- Writers, editors, and translators
- Website designers, SEO writers, and developers
- Software and app developers
- Laboratory scientists for professional testing
Differences Between a Professional Services Agreement and a Subcontract
While a professional services agreement and subcontract involve hiring a skilled third party to handle tasks requiring their expertise, several key differences exist.
A professional services agreement is most appropriate in situations in which a vendor:
- Provides services or consultation in their area of expertise without managing the overall project or implementation of their advice
- Does not need to track or manage internal performance metrics
- Supports pre-existing programs or projects with their services
Comparatively, a subcontract works better in situations in which a subcontractor:
- Manages and makes critical decisions for a project under their control
- Has a closer and potentially ongoing relationship with your business
- Is responsible for meeting performance metrics and proving the overall success of the project
- Is expected to implement their advice, plan, or program at the end of a project
Sample Professional Services Agreement
Download our professional services contract template in a format of your choosing (PDF and Word versions available) to write an agreement that will set clear boundaries and expectations from the start of your working relationship:
