Properly documenting employee and contractor obligations is key to maintaining a successful startup.

Effective talent management is critical to the success of any organization. Fast-paced, cash-constrained and high-stress, the typical startup environment demands a great deal from its service providers. (We use “service provider” broadly to mean employees, contractors, and advisors.) We therefore advise our startup clients to prioritize setting expectations and being clear about service provider obligations; doing this requires clear documentation. 

Among the many types of agreements needed for service providers are:

  • offer letters and company protective agreements (also known as Proprietary/Confidential Information and Inventions Agreements)
  • executive employment agreements
  • independent contractor agreements and statements of work
  • advisor agreements
  • separation agreements (also known as. “severance agreements” or “waiver and release agreements”)
  • employee handbooks

Having clear, concise, and accurate agreements reduces the chance of misunderstanding and conflict. If a dispute arises, a well-drafted agreement can reduce litigation costs or better still, put the company in a position to avert litigation entirely.

As with any contract, a service provider agreement is not static. Expectations change, as do laws. These agreements should periodically be reviewed by an experienced lawyer.

Incentive equity is often part of a startup employee’s compensation – check out Equity Incentive for more information.

How does goodcounsel help with service provider documentation?

We typically represent our early-stage company clients in drafting, revising, and maintaining templates for service providers. We draft custom language for key hires and assist with negotiation as needed. However, we also represent individuals in their negotiation of the above-mentioned documents. (See Individual Representation for more information.) 

We consult with the client to ensure that its service provider agreements adequately protect the business and accurately reflect the expectations of the company and the obligations of the service provider. We maintain templates for these agreements, which we update regularly to reflect changes in the law. 

Unlike the typical law firm, we go one step further: we offer clients access to a document automation platform so that they can quickly generate pre-approved employee and contractor documents. 

We also regularly advise clients on one-off questions relating to service providers. One notable recent statutory change that we’ve advised our clients on is California’s “ABC test.” The main impact of this law is that workers in California who were previously (and legitimately) classified as independent contractors may now need to be classified as employees.    

How much will this cost?

There are a wide variety of potential service provider matters to consider. We understand that early-stage companies are looking for the greatest possible value in order to conserve capital. We offer fixed fees for the creation of custom templates for most of the agreements listed above, and add helpful guidance to help you avoid common pitfalls. 

Some documents, such as executive employment agreements, are unique and involve more complicated issues; these services tend to be provided on an hourly basis. We always strive to provide clients with an estimate for hourly services, but the accuracy of this estimate may depend on the extent of negotiation with the counterparty.

We offer the document automation platform on a monthly subscription basis.

How long will this take?

We will be glad to provide you with an estimate after discussing your specific needs. 

Can I just do this myself?

We do not recommend taking a do-it-yourself approach to service provider documentation. We understand that cash is tight for early-stage companies. However, failing to attend to the key issues addressed in these documents will turn off investors and increase risk and liability for the company. Further, each state has its own set of labor and employment laws, which companies can run afoul of without the proper expertise. A goodcounsel lawyer will efficiently guide you through the important issues addressed in service provider documentation and address any unique situations that may arise.

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