You Reap What You SOW – Your SOW is Giving “Lawsuit” Energy

You Reap What You SOW – Your SOW is Giving “Lawsuit” Energy

Last time, we briefly discussed the Master Services Agreement trinity: Scope, Pay, and Risk. The MSA is all about risk and the inherent shifts in risk that come from doing business and providing services. What about scope and pay? That’s where your Scope of Work (“SOW”) comes in. Remember, you’re not writing your SOW anticipating all the good times where work is getting done and the money is flowing. You’re also writing it assuming that the client is catfishing you now, and will gaslight you later, into thinking they had expectations that were not met. If you are in a service-based industry and working with a client on multiple projects, or even on one project but using a separate SOW for each, you need to read this.

Let’s Talk Scope

Your SOW isn’t just a general to do list, and while your legal team can comment generally on whether it makes sense, it’s ultimately up to you and your industry knowledge to clearly delineate what your “scope” actually is. For instance, if you are providing CRM services for your clients, don’t just literally list “CRM services”. What kind of software do you use? How many hours do you anticipate spending per day/week? How often would you be “on call” for any issues? What if you start your work and the client emails you one day asking for the Salesforce report on XYZ issue, and your response is: “What’s Salesforce?” Clients can, and will, make a lot of assumptions. While it isn’t your job to read their mind, it is your job to ensure that you are as clear upfront as possible as to what you do and what you don’t do.

This is a very simplistic example of what we call “scope creep”. While the MSA will have language with respect to what happens if extra work is requested, the SOW should still set forth sufficient parameters so that whatever is outside of those parameters (and therefore, “extra”) is clear.

Shut Up and Pay Me

We’re all here to make money. If you expect different rates for different kinds of scope, say that in your SOW. If certain payments are tied to specific milestones, say that. If there is a specific change order process involved, particularly if such process requires you to obtain third party approvals, say that. It’s unreasonable to expect that your SOW will be 20 pages long, but the goal here is to ensure that whatever is critical, and whatever is most likely to happen based on your experience and industry knowledge, is on the page.

This comes up quite often in the construction space. Let’s say you’re a roofer, and you are tired of finding rot or other latent defects and having to spend extra money that you didn’t anticipate spending to deal with it, because your client is not sophisticated and just assumed that everything on, and under, the roof is part of your work. The solution? Your SOW should clearly say that if you find rot, you will not be responsible for remediating that, and that your client is responsible for paying those associated costs as extra work. Need to stop work while that remediation gets done? Say that too.

All in all, you reap what you SOW, so if your SOW isn’t clear, that scope creep could have you harvesting a lot more than you bargained for, but . . . as always, if you’ve got questions, you know we’ve got answers!

~ The W + K Team