Working with agencies: top 5 points to cover

Working with agencies: top 5 points to cover

When working with agencies (e.g. design or marketing agency), you will generally be working with a bigger operation than with a freelancer. This will most likely increase time and energy spent on dealing with different people and making sure that all the project requirements are followed and delivered. You also have other internal projects going on, you need to supervise. 

So, how do you streamline outsourced projects with agencies, and save time and money? How do you prevent potential conflicts in case things go wrong? 

Here are the top 5 things you need to consider when you have received an agency agreement and some tips on how to negotiate its terms with an agency.

  1. Agree on a comprehensive scope of work

Define briefly all your project requirements and quality standards. Plan out what you need in advance. For example, if working with design agencies, be clear on all the pages and variations you want to be designed. If working with marketing agencies, be clear on all the deliverables and outputs, including what you expect to do yourself, and what you expect them to do.

Planning ahead and knowing what you want is going to make both your life and  their life easier and will increase the success rate of your project.   Otherwise you can end up continuing to add things, and fix things, and change things, and before you know it, your delivery date and budget are doubling. 

It will also reduce the possibility of potential disputes to arise, whether work is completed or not. Or whether the project quality requirements have been ensured. Try not to find yourself in a situation where the agency’s scope of work is complete, but you only have half of what you need because you didn’t think of half the necessary things when hiring them.

2. Acceptance testing

Ensure your  has a mechanism which covers acceptance testing. What is acceptance testing?

This is where you, as the client, have an opportunity to test what is being put to you. Until the job is deemed ‘complete’, you have a chance to accept the work or not, and if not, then you are entitled without additional cost to have the agency go back and fix any errors or issues (provided you are not changing the scope of work when doing so – see point 1).

3. Fixed and capped fees - not hourly rates

Keeping fees under control for a startup when outsourcing  projects is vitally important. Companies are usually billed on an hourly basis for the length time an agency spends on a project. However, in recent years, fixed fee billing has become more common.

Try to negotiate a fixed fee or a capped fee for the whole project. Fixed price contracts are those where the agency provides a set price to complete the agreed scope of work. Capped fee contracts are those where the agency agrees not to let it exceed a pre-agreed maximum.

Fixed fee or capped fee contracts encourage both parties to understand in more details the scope of the work and complete the project quicker. It also minimises the chance of cost escalation and low performance, and parties will be more likely to keep each other informed with respect to changes. 

By doing this, you will save time, money and a few headaches. 

Of course, price and time estimation should be reasonable and fair, so that it is a win-win situation for both parties. 

4. Payment conditional on delivery - not up front

Agree to pay once the product or work has been delivered. Upon delivery, you will be able to make sure that the project requirements have been followed and the project has been completed. 

You can also pay in instalments, by for example, splitting the scope of work up into different milestones. But other than a small deposit, it is better not be paying for development work up front, in case the relationship with the agency does not work out and conflict arises on, for example, reimbursement. 

5. Ensure you own all the intellectual property rights

Most importantly, you need to ensure that once the work is delivered, you absolutely own it and all intellectual property rights in it without any ambiguity or uncertainty.

You need to ensure you have a strong intellectual property clause in your agency services agreement [link to be inserted]for this. This also included putting an obligation on the agency to confirm they haven’t effectively stolen material from other projects that don’t belong to them.

If you have received an agency contract and need support, please contact us at

This article was written by Legal Sidekick. Legal Sidekick is the legal platform for startups. We offer automated contracts and loads of startup legal resources and guides. For 'working with agencies' queries, please contact us at