Agreements for Public Relations Services

In my last post I discussed some of the issues that might arise when negotiating the terms of engagement with a public relations firm.  In this post I want to provide a more comprehensive list of the issues that need to be considered.  Specifically, the executive responsible for marketing activities should be sure that any agreement for public relations services covers the following areas:

  1. Scope of Work.  Among other things the firm will usually be expected to make introductions to, and establish relations with, specified public relations targets such as editors, industry analysts, broadcast producers, representatives of print or broadcast media and others. Consider including an attached addendum which spells out in more detail the elements and budgetary allocations associated with the specific public relations program that the firm intends to pursue on behalf of the client.
  2. Term, Renewal and Termination.  It is common to provide for a 12-month term followed by automatic renewals for additional 12-month periods unless one of the parties decides to terminate the agreement.  In contrast to this type of “evergreen” approach the parties may simply agree on a single fixed term without automatic renewal and thus force new negotiations on salient points in the contract.
  3. Compensation.  One common method is to provide for payment of a minimum monthly fee, a “retainer,” in recognition of the fact that the firm will be providing continuous attention to developing and implementing a public relations campaign on behalf of the client.  Other alternatives for a fee structure include a fixed project fee, hourly arrangement with advance, and hourly arrangement without advance.  Billing and payment procedures should also be developed and described.
  4. Expenses.  The parties should create procedures for reimbursement to the firm for expenses incurred in connection with services provided by the firm.  Examples of expenses associated with the service provided by the firm include mechanical and art costs (including typography, artwork and comprehensive layouts), news distribution costs (including wire services and mailing houses), audiovisual production costs (including photography, slide and video production), research activities (including market research fees, on-line database charges, clipping services, and focus group costs), producer’s or packager’s fees, and third party spokesperson fees and expenses).  These expenses are passed on at cost plus a pre-agreed mark up.
  5. Intellectual Property.  The agreement should include rules for allocating rights to ownership and use of creative work developed during the course of the relationship.  Since the client is commissioning the creative work done by the firm it is natural for the parties to agree that all intellectual property rights associated with that work will vest in the client provided that the firm has, in fact, been paid for the services associated with creation of the work.  In turn, the agreement should make it clear that the firm retains ownership of its own proprietary information and tools including media lists and its own set of third party relationships.

Other sensitive business issues that might need to be addressed include whether or not the firm will be the exclusive provider of public relations services, inclusion of restrictions on the right of the firm to conduct public relations services for competitors of the client, and inclusion of restrictions on the rights of the parties to solicit or hire employees or contractors of the other party. 

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