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Contents of a Written Freelance Work Agreement
A written freelance work agreement should clearly define the project terms for everyone involved, including ethical and legal considerations, as well as protect the interests of both the freelance attorney and the hiring attorney. But the written agreement does not have to be complicated or lengthy. In most cases, a simple two- or three-page agreement will suffice. The seven basic components of a freelance work agreement include:
- Scope and duration of the project
- Compensation
- Employment relationship status
- Confidentiality and preserving the attorney-client privilege
- Conflict checking
- Malpractice insurance coverage
- Work product ownership
1. Scope and Duration of Project
The first basic component of a freelance work agreement is setting forth the parameters of the project to be completed by the freelance attorney for the hiring attorney. Most projects could be described by a word or phrase, such as “legal research,” “document review,” or “motion in limine.” But a project in a freelance work agreement should never be defined by a single word or phrase. Instead, all material or important aspects of the project should be included, such as the name of the case or client and the ultimate deadline for the project.
If the hiring attorney wants the freelance attorney to follow a specific timeline when completing pieces of a larger project, the timeline should be outlined in the freelance work agreement. If there are any major parts of the project that the freelance attorney is not going to handle, those should be noted as well. Ultimately, the freelance work agreement needs to have a thorough scope-of-project description. The more information, the better it is for both parties.
2. Compensation
The second basic component of a freelance work agreement is compensation. Freelance attorneys and hiring attorneys can work out a variety of compensation structures, such as a straight hourly rate, an hourly rate with a cap, or a flat fee per project. Billing structure is usually driven by the type of project and how the hiring attorney is billing the direct client.
In the freelance work agreement, the type of billing structure for the project should be fully outlined and detailed, including how the hiring attorney will be invoiced by the freelance attorney, the due date for payment, and how compensation will be handled in the event the work agreement is terminated prior to completion. In most cases, payment will not depend on the hiring attorney receiving funds from the direct client. The freelance attorney has no control over the direct client’s billing and payment, including no power to effectuate a collection if the direct client does not pay. Therefore, expectations regarding payment need to be clearly set forth in the freelance work agreement.
3. Employment Relationship Status
The third basic component of a freelance work agreement is defining the terms of the employment relationship between the freelance attorney and the hiring attorney, law firm, or legal entity. Under most circumstances, freelance attorneys will be independent contractors, which benefits both sides — the hiring attorney is not required to pay employment taxes or benefits, and the freelance attorney maintains control over where, when, and how the project is completed.
In order to preserve the independent contractor status and avoid potential misunderstandings, the freelance work agreement should cover the major aspects of the employment relationship, including payment of applicable taxes and payment of related business expenses. In addition, the type of legal entity should be specified for the freelance attorney (sole proprietorship or business entity) along with reference to a social security or tax ID number. If the freelance attorney expects a 1099 at year end, that should be specified as well.
4. Confidentiality and Preserving the Attorney-Client Privilege
The fourth basic component of a freelance work agreement is outlining confidentiality terms and ensuring preservation of the attorney-client privilege. Both the hiring attorney and the freelance attorney have professional obligations related to confidentiality and the attorney-client privilege, and the freelance work agreement is the most logical place to set forth related considerations and concerns.
For example, the agreement should clearly outline the confidential nature of any and all client information used by the freelance attorney. The agreement should also recognize that no attorney-client relationship will be established between the freelance attorney and the hiring attorney’s direct client. The hiring attorney is obligated to exercise its independent professional judgment and make all final decisions regarding the case and client. Upon completion of the project, the freelance attorney should agree to return all property belonging to the firm or information related to the firm’s clients.
5. Conflict Checking
The fifth basic component of a freelance work agreement is a discussion of conflict checking. Both hiring attorneys and freelance attorneys must monitor conflicts of interest related to the project. The hiring attorney needs to be mindful that the freelance attorney works on projects for multiple attorneys, law firms, and legal entities.
It is very unlikely that conflicts will be imputed if the freelance attorney is working on a single project or client file. However, to avoid the possibility of imputed conflicts, the hiring attorney should limit the freelance attorney’s access to confidential client files and to matters other than the project at hand. The agreement should discuss conflict checking and make obligations by the freelance attorney clear.
6. Malpractice Insurance Coverage
The sixth basic component of a freelance work agreement is addressing professional liability concerns. Although not required, malpractice insurance is strongly recommended for freelance attorneys. A freelance attorney should verify that the hiring attorney carries current and sufficient malpractice insurance to cover the project being worked on. However, in the event an issue arises, there exists the possibility of indemnification by the hiring attorney’s insurer if a malpractice claim is filed.
Whether or not the freelance attorney will be held liable is a separate issue, but handling the cost of defending against the malpractice claim is not something any freelance attorney should risk. In addition, carrying a malpractice insurance policy increases the reputability of a freelance attorney’s practice, showing hiring attorneys that the freelance attorney is a professional ready to do business the right way. The freelance work agreement should clearly address whether the freelance attorney has malpractice insurance coverage, and whether the hiring attorney has coverage for the project.
7. Work Product Ownership
The final basic component of a freelance work agreement is addressing the work product generated by the freelance attorney during the project. In hiring a freelance attorney to work on a component of a case or transaction, the hiring attorney is paying for the freelance attorney’s time and work product. Therefore, upon project completion, the hiring attorney owns the work product.
The hiring attorney must retain ultimate responsibility for the file and ensure the client is competently and ethically represented, even when part of the work is done by the freelance attorney. The freelance work agreement should specify that the hiring attorney has the exclusive authority to make decisions in representing the client, retains sole responsibility for the matter, and has complete discretion whether and how to use the freelance attorney’s work on the client’s behalf.
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