Statement of work - what exactly is a SOW in legal terms?
How does it work?
There is no prescribed format for a SOW but usually this would take the form of a Master Services Agreement (MSA).
An MSA operates as the framework agreement governing individual SOWs. Sitting under the MSA, each SOW is a legally binding, business to business contract for services between two parties.
The SOW provides the commercial structure, describing the project including the scope, specification, deliverables, timescales, payment and acceptance criteria. The more robust the SOW, the more likely it will be deemed a genuine, outsourced agreement as opposed to the provision of labour.
The devil is in the detail- the more specific the deliverables and acceptance criteria, the less likely that scope creep will occur which can result in disputes.
Reaping what you SOW
Considering this option?
How can contractors, agencies and end clients capitalise on this enormous amount of talent and skill? And do so while ensuring the SOW model is operated compliantly and therefore exempt from off-payroll?
Once you have won the work, how do you draft the SOW?
When writing a statement of work that’s compliant, it’s important to include the following:
Scope: Overview of the whole project/set of outcomes required, detailing what the client wants and expects to see upon completion
Deliverables: The actual output required to be provided
Milestones: The measurement of progress/outcomes which often relates to the trigger of payments based on successful completion
Dependencies: What you expect/need from the client in order to achieve any deliverables.
Price: This will generally be a fixed price which should include all of your overheads and profit, taking into account the increased financial risk you are exposed to
Caveat/assumption: A set of conditions you need to make in order to define the SOW deliverables and milestones, the vaguer the client’s requirements, the more conditions you might look to include to base your solution (and cost) on.
The team is headed by Carla Roberts, a dual-qualified (US/ UK) lawyer. who has over 14 years of experience advising the staffing/recruitment industry. Carla was previously Head of Legal for a large recruitment company and also worked as Sr. Legal Counsel for Alexander Mann Solutions. Her career has included another 10 years working in a compliance managerial roles for large insurance companies.
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