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Nick Salvatoriello

By Nick Salvatoriello

May 2, 2019


Working With Marketing Agencies
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Working With Marketing Agencies

11 Conditions to Expect in a Master Services Agreement with a Marketing Agency

Nick Salvatoriello

By Nick Salvatoriello

May 2, 2019

11 Conditions to Expect in a Master Services Agreement with a Marketing Agency

Since I joined the IMPACT sales team back in January of 2017, I’ve negotiated 100+ transactions between our company and new clients.

Through that process, I have dealt with people on negotiating our agreements ranging from the legal counsel of global corporations to working directly with the company founders.

What I found surprising across all of these interactions was how much of the transaction, timing and effort centered around discussing terms in agreements we have with our clients like the Master Services Agreement (MSA).

What was interesting to me is that the same contract points came up over and over again for clarification.  

Ultimately, a lot of the additional time spent might have been avoided (or at least minimized) if all my counterparts I was dealing with fully understood the context around the terms included.

After concluding some particularly protracted negotiations around our MSA with the legal counsel of a new client recently, I thought to myself, “how can we provide better explanation about what MSA terms and conditions to expect, what they mean, why they are there, what’s negotiable/non-negotiable, and finally what the implications will be for both parties?”

I was excited about the idea of publishing an article addressing these questions because of what I believe we in sales and contract lawyers have in common: We’re both focused on helping bring parties together to create value while protecting our respective organizations from undue risk in the process.

An MSA encompasses those expectations and commits both parties to areas of success while protecting each company’s interests.

In that sense, it’s a document that forges healthy working relationships between people.

Keep that in mind as you dive into some of the legal language we’re about to go through.

Why a Master Services Agreement?

Digital sales and marketing firms like IMPACT seek long term, ongoing relationships with clients.  

Usually we’re working with them across an average span of 2+ years. However, that relationship is typically structured across multiple projects/scopes of work.  

As we approach a new project opportunity with a client, neither party wants to re-review, re-negotiate, or re-approve every single generic term and condition for working together every single time.

It’s inefficient, it slows everything down and can drive up operating costs for everybody involved.  

Many professional services organizations have solved for this challenge by providing an MSA that serves as the foundation for the relationship that they can then reference for future project-based agreements you draw up in order to keep the project agreements as focused and streamlined.

What Does a Master Services Agreement (MSA) Do?

From Wikipedia/top article on this query:

A master service agreement, or MSA, is a contract reached between parties, in which the parties agree to most of the terms that will govern future transactions or future agreements. A master service agreement allows the involved parties to more quickly negotiate future transactions or agreements, because they can rely on the strong foundation of the master agreement for future business, so that the same terms need not be repetitively negotiated, and you only need to negotiate terms specific to the latest deal.”

An MSA is a very common thing in professional services.

It allows you to take things project by project with the service provider without having to re-negotiate and re-sign off on how you and that provider are going to treat each other every time.  

In this way, it serves as the foundation of the ongoing relationship, regardless of what project they’re working on and how, or even if they’re between projects for the moment.

IMPACT considers our MSA to be the agreement on what IMPACT and our clients value and how we will behave in a healthy, ethical, and mutually beneficial business relationship.

What Types of Terms and Conditions Are Typically Included in an MSA?

Every company’s legal department probably has slightly different ideas of what should be or not be in an MSA, but if you’re going to retain a professional services team like IMPACT, chances are there is some common areas and language you’ll need to understand.

Although the titles/formatting may be different in each case, any MSA you/your company will be reviewing from a professional services firm could have any and all of the following sections within it:

1. A section on what the MSA’s general terms cover/don't cover in relation to project-specific agreements such as statements of work

2. Confidentiality Terms

3. Intellectual Property Rights

4. Terms of how, if, and when the relationship can be discussed or disclosed

5. Conditions for how the work will be performed:

  • How deliverables will be reviewed, rejected or approved by the client.
  • What each party will be responsible for providing and/or maintaining throughout the life of the services relationship
  • Consequences/implications of either party not complying to elements of the agreement
  • Agreement about non-solicitation of each other’s employees or clients

6. Steps for how legal disputes will be handled

7. Indemnification clauses in case either organization is sued by a third party

8. Warranty/support information for work the firm delivers to the client

9. Insurance and/or security requirements for the service provider (and perhaps even the client) to maintain

10. Expectations for how the money, fees, expenses, payment will work

11. Language around the term of the MSA agreement and how either party can terminate a given statement of work and also how either party can terminate the MSA, if needed.

Yeah, that’s a lot, I know, but it gets less daunting the more you understand each piece.

Now that you’ve gotten a bit more oriented to what this type of agreement is all about, let’s break down each of these areas to give you a better idea of what terms to expect and why they are important:

1. General Terms: How the MSA References Other Services Agreements & Statements of Work

First of all, there should be a section that makes it clear that the Master Services Agreement exists apart from contracts for specific services you’ll be hiring the firm to execute with your company over time.

In other words, this stands apart from the terms and conditions of future individual projects.

A Master Services Agreement is not the same as a statement of work or a work order.

Each project that a service provider like IMPACT provides to their clients - a team training to be delivered, a website to be built, software to be implemented, etc. - is negotiated in a statement of work (SOW), which is a project-specific companion to our Master Services Agreement.

This specifies each individual project’s problem to be solved, what is in scope or out of scope, the team involved, key dates and milestones, the total price, the billing schedule, and so on.

The first section of the MSA could point out that this is what the statement of work between the service provider and the client would be for.   

2. Mutual Confidentiality

Because we’re dealing with client data and working so closely with their leadership teams on details of their sales, marketing, and overall future company growth strategy, a section in an MSA assuring confidentiality protection is needed.  

On the other side, firms like IMPACT will often be training/consulting/implementing with clients in a way that involves us sharing unique aspects of how we successfully operate.

What clients can learn from our unique experience is very valuable, so we expect mutual confidentiality protection around what we share.  

Usually there isn’t a need for any confidential information to be shared with a firm like IMPACT during the sales process in order to assess a mutual fit so an MSA or NDA (Non-Disclosure Agreement) shouldn’t be needed.

3. Intellectual Property Rights

A section on intellectual property rights typically describes who owns/retains rights to unique processes and/or deliverables before, during, and after the work has been performed.  

It deals with who owns the deliverables/work and how the service provider transfers all ownership rights upon acceptance. It also spells out who retains ownership of the processes and/or tools used to create the deliverables - these are often referred to as a firm’s intellectual property (IP).  

Firms like IMPACT are in the business of training organizations to plan, organize, strategize, and prioritize things and code and/or configure digital assets long after we’re gone.

In that sense, we’re like a “knowledge factory” continually transferring know-how and digital assets to a client organization over a series of projects together.

Many consulting and professional services firms operate like this. So, you can expect language that specifies that the firm transfers certain rights/ownership to your company for the deliverables they create for you and processes they train you on, but that they retain the rights to the processes, tools etc used to put these together.

With this in mind, there can be language in an MSA making clear that a client isn’t allowed to copy certain proprietary tools or processes from the service provider and use them again and again with other companies who are not part of this MSA, at least not without permission.

It’s a small distinction, but it may be an important one for the future success of the firm you’d be working with.

4. Relationship Disclosure

If you’re evaluating working with a professional services firm like IMPACT, chances are you’re going to want them to share examples of similar work they have done for companies who might have similar needs or goals as yours.

So, if/when it comes time for you to become one of that firm’s clients, what should you expect in terms of being featured in that firm’s client portfolio?  

At least in IMPACT’s case, it’s expected that upon contracting with us, that we have the ability to publicly call you a client and to showcase certain aspects of our good work together.

That doesn’t mean we’ll give your trade secrets away or publish anything that hurts the future performance of your company.  In fact, the language around mutual confidentiality should ensure that neither party should be able to do this.

However, IMPACT believes it’s important to agree in our MSA that if there’s something we all accomplished together that is helpful for future clients to learn from (and let’s not forget, helpful for the brand of your team and your company), that we can share it.

But parts of this are negotiable and may be with other firms as well.

Many legal departments flag this section for further discussion because they’re concerned there’s a risk that something the client doesn’t want to have published will be. We get it.

So, what might be a compromise would be to add in language that the service provider has to ask you in writing for approval before certain aspects of your work together is featured in public facing material.

Service providers you might negotiate with may be open to this compromise.

5. How the Work Will Be Performed

In MSAs, it’s common to have a section that spells out what each party will be responsible for providing throughout the length of the relationship in order for the work to be performed successfully.

It’s important to talk about these obligations up front so that it’s clear what everybody is committing to.  

There are conditions that both parties would likely agree to.

For instance, each party being responsible for bringing qualified staff to do the work together (and performing the work in a timely, professional manner).

Also, each is responsible for timely delivery of their text, graphics, logos, images, copy, photographs, and all other related input requirements necessary for your firm to perform the services you hired them for.  

Another important piece here is language that confirms that both parties own the rights to any content, data, images, inputs of any kind that they share with each other to use in performing the work together - and that no usage of any inputs shared by either party would violate any sort of law or pre-existing agreements that either organization must comply with.  

Believe me.

It’s happened before that we’ve helped produce a website page for a client only to find out that the copy or an image they gave us to use on that page in fact belonged to somebody else and that third party threatened to take legal action unless the content is removed.

Who’s responsible for fixing that? Who’s liable for damages that might be incurred as a result?

You want to get clear on that expectation ahead of time.

There are also going to be terms that are specific for the firm providing the services.

For example, here are some obligations that IMPACT commits to provide every client via our MSA:

  • Assigning qualified personnel to perform our services
  • Performing our services in a professional manner, and in accordance with the standard of care, skill, and knowledge generally prevailing in the industry
  • Providing all equipment and tools necessary to perform the Services, except as otherwise agreed between Client and IMPACT
  • Supporting the deliverables we create for a defined period of time
  • Maintaining proper security measures for our systems that we use to perform client work and maintaining insurance against cyber attacks as well as any errors and omissions
  • Providing timely notice of additional expenses or required changes of scope

Expect also to see language that spells out expectations for what you as a client would be responsible for in order for the firm to successfully perform the work.

To give you an idea of some potential obligations you might be expected to commit to, check out some examples of Client Obligations from IMPACT’s MSA:  

Client Agrees to the following:

  1. to appoint, in writing, a sole representative with full authority to provide any necessary information and approvals that may be required by IMPACT (the “Client Representative”).
  2. to ensure that Client’s personnel assigned to the project are available as may be reasonably required by IMPACT to more fully and efficiently complete the Services.
  3. to attend and participate in scheduled calls and meetings;
  4. to complete mutually agreed upon client responsibilities;
  5. to review work in process on a regular basis and provide feedback to the personnel assigned by IMPACT on in-process and completed work;
  6. to notify IMPACT immediately should Client require changes to the Services under the Statement of Work, at which time all outstanding amounts payable to IMPACT shall be invoiced to Client, and the parties shall, in writing and acting reasonably, amend the Statement of Work to reflect the required changes to the Services;

Obligations like these are important because if any of them cannot be met, agencies have a harder time doing their jobs. Timelines get extended or expectations aren’t met.

To make sure clients are aware of the ramifications of not meeting obligations, there should be language describing the implications of not complying in the MSA.

One of the most important expectations that IMPACT sets in this section is the following:

Client acknowledges that its timely participation and cooperation is necessary for IMPACT to provide the Services as anticipated in the applicable Statement(s) of Work...Client’s failure to provide necessary information, attend scheduled meetings and phone calls, provide feedback or participate or cooperate in any other reasonable manner will create delays, hinder the performance and results of the Services and impact the estimated cost and schedule detailed in the applicable Statement of Work.

Now that you’ve covered obligations for each party to meet throughout the course of the relationship, let’s talk about the language a bit more specific to the work itself:

How Approvals + Revisions + Rejections of Deliverables Will Be Handled  

What if the firm you’re working with turns in a draft deliverable that doesn’t meet your expectations?

Agreeing to how deliverable reviews and rejections of work will be handled in this situation is important.

An agency should have, within reason, a timely opportunity to be properly notified of a rejection, be given specifics as to why, and also have a reasonable amount of time to make it right.

This is a creative business after all and a need to rework deliverables from time to time should be expected - and there should be a process around that which is agreed to ahead of time. 

The Revision Process for Deliverables

The number of revisions that are to be included with a deliverable should also be agreed to ahead of time in the MSA.  

The MSA should stipulate how many revisions are included with any deliverable draft.  

IMPACT’s MSA says each deliverable comes with one round of revisions, and by revisions we mean, “This draft is in line with what we agreed upon, but I’d like to make these specific tweaks or changes before finalizing.”

You get one of those rounds built in, so long as the requested revision remains along the lines of the Statement of Work. For example, you can’t give as a revision, “let’s make a different kind of template than the one we described in the creative brief.”  

If clients would like additional rounds of revisions (perhaps because there are additional stakeholders or a specific deliverable is overly complex in nature) those are welcome, but they will cost extra (time and money).  

If, even after revisions, expectations are not met, the MSA should make clear the client has the ability to “reject” it. Conditions should also be laid out for how a client can do that and what the agency will do to produce an acceptable draft (in IMPACT’s case we would do so at no charge, once) and then any requested tweaks after that count for the revision.  

So, how long should the client be given to review a deliverable draft before their feedback is considered “overdue” and additional costs are incurred? This brings me to….

The “Review Period”

Expect that if they’re creating deliverables that have multiple build phases or drafts in order to complete, that your professional services firm will set an expectation on the maximum amount of time allowed for you to review a deliverable draft before your feedback, approval, or rejection is “overdue.”  

IMPACT’s expectation, for example, is that our clients will take a maximum of three business days (excluding holidays, acts of God, etc).

You might be thinking, “three business days might not always be enough time! We’re all really busy and stretched thin over here as it is!”

What’s negotiable?  

You could ask to extend this time period. You could ask to extend this amount of time to, say, five business days per review period (I’ve been asked to extend as high at 10 days!).  

We would also allow situations where you give us advance notice that you will require more time on a case by case basis, like taking a planned vacation. We should be able to work around that if you give us notice.  

Committing to a set limit of time to complete draft reviews is crucial because all of our project estimating and team capacity forecasting is based on this understanding.

While at first glance building in some extra buffer time sounds like a good idea, in practicality, since this is the MSA we’re talking about here, it’s not.

What happens is, in order to comply with allowing more days than originally planned for every single review of every single draft, the service provider will need to extend the timeline of nearly every project accordingly.  

Remember, you’re typically hiring a specialized firm like IMPACT to potentially help get you out of a cycle of missed deadlines and projects losing momentum.

Most people want results and outcomes as QUICKLY as reasonably possible. If you want that, you need to do your part and work with the agency to meet a reasonable timeline, not expand the global expectation to accommodate the edge cases where more time might be needed.  

The key takeaway from this section is that in order for the agency to meet its deadlines and obligations for the client, they are going to need agreement on expectations of timely review feedback from the client.  

If the client is withholding information, inputs, or approvals that keep their agency from meeting those obligations, there should be agreement on the expectation that scope, timeline, costs, and any expectations on performance may be impacted.  

Which brings me to the next section...

6. How Disputes Get Settled

What if  things fall off-track in a given project or the overall relationship you have with your service provider goes south?  

A well thought-out MSA (from my perspective anyway) needs to include at least one section that addresses the steps that will be taken.

The language here could range from how communication between parties should occur and how escalation is done up the chain of staff to what will happen if there’s a legal dispute.  

Expect to have terms for when, where, and how the parties will handle in each instance.

Here’s an example of language on this topic from our own MSA on how we as a service provider will communicate with our client should we believe they are not meeting obligations:

If IMPACT believes that Client is not providing or carrying out the required Client obligations (as set out in Section 4 of this Agreement), IMPACT shall promptly, and in any event within ten (10) Business Days of becoming aware of the alleged deficiency, notify Client in writing of such deficiency. Each such Notice shall specify, in reasonable detail, the Client obligations that have not been met, what is required of Client, the employees of Client to whom such requirement relates, the date by which such requirement must be fulfilled, and the effect or result upon the Services and the Deliverables if such requirement is not fulfilled.

Look for terms in your MSA that would cover who is liable or “indemnified” for any third-party claim that might result from the work and or deliverables from the work.

7. The Involvement of Third Parties

In order to perform the type of work that firms like IMPACT perform for clients in this increasingly digitized and interconnected world we live and work in, it’s natural to expect that certain services may be dependent upon the products and services of third parties, such as search engines, website hosts, domain registrars, advertising platforms, email service providers, social media sites, online service companies, printers, and content management systems.

Those third-party systems involved and who’s responsible for what should be well understood between you and the firm you’re contracting with.

There should be language here that the firm you’re contracting with will not be liable for the acts or omissions of such third parties, or their end users, beyond their reasonable control.

For instance, they shouldn’t be liable for the failure of the products or services of such third parties to operate as intended like Facebook going down, or a system-wide outage that occurs for a key software platform like HubSpot.

In addition to covering who is and isn’t liable for the operation of third party system, you should expect to be financially responsible for, and will pay for, any miscellaneous or third party fees or costs for those platforms that are not included in their MSA Agreement, including things like software license fees, website hosting and domain registration fees, subscriptions (including HubSpot or others), printing and production costs, and website design or website updates outside of the scope.  

It’s important to make these responsibilities for third-party tools clear, otherwise there’s a risk that one party will assume that the other party was going to pay.

That's not fun to discover after the fact. It's better to get that clear ahead of time by having it spelled out in your MSA!

8. Warranty/Support Information

Once handed over and clients are trained on how to utilize their deliverables, these deliverables (website templates, paid media campaign spreadsheets, email automation setups in platforms like HubSpot) should ideally get used long after the project to build them is complete.  

Thus, these assets get handled by many people, may get tweaked or adjusted by client staff in ways the agency cannot always control.

Also, things like templates or program code can live on third party platforms that, no matter how intelligently we developed them, are not inherently “future proof.”  

This is why there needs to be some reasonable minimum expectation as to how long the agency that built the tool you’re now using will support it.  

IMPACT sets a minimum of 30 days for covering any non “bug” related support needs, but another agency might have different lengths or depth of minimum default support they build in.

Here are some examples pulled from across IMPACT’s MSA to show you the different ways support/warranty can be addressed within an agreement like this:

  • IMPACT is not responsible for delays, errors or omissions resulting from Client’s breach of Client's Obligations and will not be liable for any claims related to materials, specifications, and information provided by Client to IMPACT for the Services.
  • Except as expressly set forth in this agreement, IMPACT’s services are provided “as is.”
  • IMPACT does not warrant that the services will be completely error-free, completely secure or uninterrupted. Services are reliant upon the workings and operability of third party providers, such as the internet or social media websites.  
  • IMPACT shall not be liable to the client or any third party for any unavailability or inoperability of telecommunications systems, the internet, search engines, social media sites, technical malfunction, computer error, corruption or loss of information, or other injury, damage or disruption of any kind beyond the reasonable control of impact. 
  • The client assumes all risks related to processing of transactions related to electronic commerce.

What if an agency coded something for you that turns out you can demonstrate has a true bug or error in the code they wrote to build the deliverable?  

This can happen (and the warranty clause example above points out this can happen). If this turns out to be the case, the agency should commit to fixing it.

Again, using ourselves as an example:

  • IMPACT will provide patches and bug fixes for issues included in a Statement of Work concerning website development reported within thirty (30) days following the date of Statement of Work completion.
  • All requests for bug fixes outside said thirty (30) day period are the sole responsibility of the Client, provided however, the bug has been evaluated by both parties and are confirmed as an error in IMPACT's code, the bug will be fixed at no cost to the Client.

Unfortunately, no agency can commit to indefinitely “supporting” the templates they made if there are not any bugs or flaws in the approved deliverable.  

“But you guys built this for us last year,” might be a good reason, but that doesn’t mean your agency would have the capacity to do it for free.  

Would you like more support on a particular set of deliverables (outside of fixing a true “bug” in the code)?

That’s certainly possible - but not necessarily something that needs to be negotiated/committed to as part of the MSA.

Specifically, in our MSA, we set this expectation: If Client wishes to engage IMPACT for ongoing website support, a Statement of Work must be entered into for such matter.

The key takeaway: Minimum support expectations as outlined in an MSA are just that, the minimum we can reasonably commit to all deliverables no matter what.  

Additional support (both in breadth and depth) can be available such as adding on an SOW for monthly website support.

9. What Insurance Coverage Will Be in Place Throughout the Relationship

This section is important to spell out and make sure that the agency has sufficient insurance to cover the particular risks involved with the project.  

Examples of insurance that IMPACT carries and lists out in our MSA:

  1. General Liability Coverage of $2M per occurrence with a $4M annual limit;
  2. Umbrella Coverage including an additional $10M of coverage;
  3. Workers Compensation coverage of each occurrence up to $500,000;
  4. Errors & Omissions coverage of $1M;
  5. Cyber Security Liability Coverage of $1M.

Based on the nature of the work you’re looking to contract out, you may request that the firm secure additional insurance.

What’s negotiable? Well, just because a firm doesn’t currently carry insurance coverage for a particular area today doesn’t mean they wouldn’t buy additional insurance if they felt it would be important to have on hand in order to work with a client like yourself.  

In fact, as the type of work IMPACT does has expanded, and as the industry has evolved, some of the coverage listed above we only secured as part of our MSA negotiations with clients in the recent past.

If you’re contracting with a service provider and you’re not sure what particular insurance is most important to be in place for the type of work they will be doing with you, I advise seeking legal counsel or a qualified insurance broker for professional guidance in this area before you make any decisions.

10. How the Money Works

What’s important to focus on here: Are there any special tax rules based on the state/country in which the firm you’re hiring operates?  Is the services firm based in the state/country out of which your own company operates or are these some additional regional laws that need to be considered?

There should be terms in the MSA that make these points clear.

How will any necessary travel costs for the firm you’re hiring will be handled?

This might not come up with every service provider, but in IMPACT’s case, we often will fly consultants out to do team trainings, group workshops, and on-site film production with clients, so we provide an explanation in our MSA on how those expenses will be handled.  

What happens if your company is late on a payment? Will work stop? Will there be late payment charges?

Look for clarity here on each of these questions when reviewing an MSA.

12. Terminating the Agreement

All things must come to an end at some point, but they should be ended fairly and in a predictable way for both parties.

Every MSA should include language both for how statements of work and how the MSA can be canceled.

It’s reasonable to expect that a certain amount of notice should be given so both ends can prepare.

In IMPACT’s case, we require 30 days' notice for either party to terminate the agreement without some sort of a claim that either party breached the contract and the other party was unable to resolve the breach.

Should notice of a termination be given, there may be conditions for how work that was currently underway will be concluded.

For instance, IMPACT’s MSA includes obligations to continue any outstanding SOW(s) until cancelled via SOW cancelation process.

This is so we can be sure any approved commitments to do work still get finished before we end the relationship.  

An MSA will also likely need language ensuring that both parties will continue to comply with aspects of the agreement that survive after termination (such as maintaining mutual confidentiality).  


Hopefully you’ve found this non-lawyer’s description of an MSA and a summary of its key sections useful.  

Perhaps by now you’ve realized the biggest key lesson I have learned after reviewing dozens of MSAs with clients over the years: The MSA shouldn’t be seen as just a legal document that is ignored until the very end of the sales process

Ideally, the MSA should be a reflection of what a professional services firm values in an ongoing client relationship.

It sets expectations for how they operate foundationally across all projects and how both parties are going to treat each other in order to be successful over the long term (including if/when it comes time to part ways).  

You should be curious to see it and study it for indicators of how you could meet those expectations and if you feel the expectations being set are a fit for how your company operates.

If you’re considering retaining a firm like IMPACT to work with your organization over any substantial period of time, you don’t want to save reviewing the MSA until the very end.  

Ask to see a copy of it sooner rather than later.  

The statements of work describe the “what” around the services relationship but the MSA describes the “how.”  

The good news is, any firm that truly wants to do business with you will make the time to meet with you and members of your legal team (if necessary) to go over any particular section of the MSA you would like to discuss. It’s that important.

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