Manage customer service in legal agreements

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hey I'm here with garland Brown from the legal firm Weiss Brown to talk to you about statements of work and master services agreements you've helped me out quite a bit especially from a legal perspective and I always wonder when I'm starting a new gig or even a new practice what kind of things do I need to know about the legal set of things so hopefully I never have to use them but in the in event that I need to how do I protect myself so I thought today we'd talk about statements of work and master services agreements perfect so you have to think about a master services agreement as an agreement which allows you to work at or work with a entity and have multiple jobs so if you want to think about it let's have the fight up front about the terms and condition of the contract so those terms and conditions will live in the massive service agreement and that's it's like an n plus one meaning you have one agreement that governs everything and then a plus one for each project so if you're hired to write software for a particular company you may enter into a massive service agreement to write software for that company if the company wants you to work on project a there will be a statement of work that will point to the master services agreement and the statement of work will have the terms and conditions that are different if any related to the project now the massive service agreement will generally never have I want you to do the following tour this project write a system of those a B and C that will be in a statement at work so a minimum you'll know what you're supposed to do in the statement of work and if there's some terms like there's this super important project and we don't want you to hire anyone unless we approve them that will be in the statement of work associated with that particular project okay that makes sense it does so master service is a little bit like an umbrella for any projects that you might end up doing where a statement of work would be very specific to that project absolutely and a lot of times you enter into a master services agreement and don't do any work for a year okay because the entities looking for folk say contract you they like you they interview you and then you enter into that master services agreement they lose funding and they call you six months later saying ok we have funding now for this project let's enter into this statement of work that will point to the master service agreement that we negotiated months ago totally makes sense so let's talk about a real-life situation if we could where I'm selling a engagement with to a company working with them but we do not have a master services we're pushing for that but at the end of the day they say mm-hmm we're just going to do one project with you and I'll see how it goes how do I handle that well in a sense every engagement is a master services agreement statement of work one is separated into two separate entities in that case where the into the only believes are going to work with the once it's really the statement and work and that's the service agreement combined and that's what a contract really is so the contract will have the terms and conditions that you operate under as well as hey here's what I want you to do the service is to be performed okay so we can't we want to keep them separate especially for guys like us who want to continue with services because that gives us a little bit of a more free path to just execute statements of work rather than have to constantly review the master services every single statement of work every single project absolutely but if we need to we could combine those you could combine it and I try to get companies to that I represent to use some massive services statement of work concept for marketing reasons if that master services agreement is signed and executed by the powers would be meaning that people who write the checks when they need a new project you know really have to go to legal you just say okay this is statement of work number two and here's the terms and conditions you know I haven't worked for you in six months my rates now a little higher so that statement of work you overwrite the master service agreement rates if there are any with the new rate or if you're doing something minor and it doesn't take the brain power that you need it for the for the first project you may lower the rate got it makes a lot of sense yeah how does a professional services agreement differ from a statement of work or a master service agreement okay so let me give you an analogy there's a famous photographer Annie Leibovitz okay and if I want my picture taken I could call some Joe company pictures for us and they'll bring some photographer and I may talk to that photographer hmm and the day of the the picture he gets sick and they'll simply bring someone else in okay because it doesn't really matter I didn't contract with a person i contract over the company and the company they're obligated to take my picture and I really have no understanding of who Joe was who came to see me and Joe and Mary and Sam they're the same to me for the most part if I contract with any liquids because she's famous and she takes pictures of the presidents if she gets sick you can't substitute her catters I'm buying big money and spending big money for her because of who she is okay so when you have a personal services agreement or professional services agreement either one you're saying hey I want that person or that entity there are no substitutes got it that's a big difference no substitutes okay because I'm with that person that person is is for whatever reason I'm choosing that individual that company whatever is there anything else from a contractual perspective that those either just starting out in professional services or maybe building a practice that isn't exactly the same as maybe there are other practices and they're venturing out a little bit and I think that they would need to know or should know from your perspective yeah there's this thing called a work me for higher provision okay and it worked me for fire hire provision is from the Copyright Act section 101 in the Copyright Act which for most part says hey look you in the Copyright Act says you as the creator of the work owns the copyright okay okay so without that provision and this this changes so it's not exactly the case but without that provision the argument would be you as a software developer you own the contract even though the cup right even though you're being paid for it mm-hmm so the interesting ever work me for hire provision it simply says oh I'm being paid for this I'm hired by the client we're gonna break the the general rule of the person who created it only in a copyright and we're gonna give the copyright to the person who's paying for it so what we see a lot of times are software developers who tried to put contingency language in the agreement okay I own the copyright I own the code until you pay me you can try that okay it generally doesn't work I've got a really whole hostage something that belongs to someone else it doesn't work me for higher provisions done I like this conditional thing people try it my suggestion is to don't even try it okay so Garland tell me a little bit about Weiss Brown and what you do there so Weiss Brown we started Weiss Brown and 2010 Scott Weis and myself we've grown to have several lawyers now approaching nineteen people yes and we are a business and Technology law firm we think about small companies we think about technology companies who think about startups the thing I think we're most proud of is that we are very practical okay we really really think about this is really matter now 90% of all contracts are not in dispute of that tend of hardened dispute maybe 1% of the even approach litigation and now the 1% that's in litigation about half of that actually goes to trial so if you're thinking about the universe of all the contracts most of them never have this abuse and most of them never get litigation and most of them never get to trial so if we try to engineer the perfect contract it may be good for our bottom line because you're spending lots of money with us but it really makes no sense from a legal from a business standpoint so we really pride ourselves and being really practical and not you know trying to get the perfect thing where we're arguing back and forth with an opposing counsel it's just not worth it okay so now do you only work in Arizona or can you work outside of Arizona as well sure we have lawyers who are barred in other states and when we do federal law we can work with clients from any state okay and when we do acquisitions a lot of times we have companies that sell their their companies to into these out of the state or one of our companies buys the company from out of state and then we work with entities from other countries other other countries too but other states okay yeah what do you do for fun I love track and field okay so I tracked fuel junkie and believe it or not there's this magazine called tractor fuel News the Bible of this board they just announced today or yesterday rather that they are no longer going to have a print edition straight online now straight online and I've been just following the blogs and articles and the people talking and it sounds boring to most people but it's been a fun couple days very cool this video series is designed to help you build or improve your professional services practice if you found this interesting or you have a question hit the like button below submit a comment to start a conversation subscribe if you haven't already and I'll see you in the next video [Music]