When agencies think about keeping projects on track, they often focus on their own deliverables, deadlines, and internal resources. However, a crucial part of project success — and an agency’s profitability — rests on how well clients meet their own obligations. Unfortunately, many agencies fail to define a client’s obligation to cooperate leaving the agency vulnerable when the client doesn’t follow through.
Properly defining client obligations in both a Master Services Agreement (MSA) and a project-specific Statement of Work (SOW) is key to helping ensure that clients contribute effectively to a project while also giving an agency ways to deal with uncooperative clients. When client obligations are not clearly defined, agencies can lose the ability to protect their time and budgets.
Set General Client Obligations in the MSA
The MSA is where agencies lay down general expectations that apply to all projects they undertake for a client. These obligations are often broad, covering ongoing commitments such as the client’s duty to provide necessary materials, ensure timely communication, and designate a single point of contact for approvals. While these obligations might seem straightforward, they are the foundation for keeping every project running smoothly
It’s easy to forget the need to define client obligations in the contract because they seem obvious elements to a successful project: “Of course the client must reply promptly, otherwise we’ll be here for months at significantly higher expense!” So, think about the things your agency assumes to be true when setting a price – and then make those express. If missing client materials or delayed approvals can cause project costs to increase, make that an express obligation of the client.
Use the SOW for Project-Specific Obligations
While the MSA provides the broad strokes, the SOW is where client obligations become more tailored to each project. These obligations might include more concrete deadlines for feedback on particular phases of the project, access to tools or locations specific to the project, or deliverable specific approvals that are time sensitive.
Consider a website redesign project. The SOW might specify that the client is responsible for providing server access within five business days of signing the agreement or approving wireframe designs within a set time frame. These detailed obligations help create a timeline that everyone can follow and reduce the likelihood of scope creep. If the client misses their deadlines, the agency has clear grounds to extend timelines or charge additional fees for the extra work required to adjust.
Enforcement is Key
Unfortunately, merely stating client obligations in a contract isn’t enough. You must also repeatedly remind your clients of their obligations and the consequences if they don’t follow through. We often tell agencies that contracts aren’t magic spells whose words magically make clients behave. Its incumbent on your agency’s project managers to remind clients of upcoming obligations, deadlines, and what will happen when and as those things are missed.
A key element in any enforcement plan is a stop work clause. This allows your agency to go pencils down when a client’s failure to meet obligations starts to impact project costs and timing. While you wouldn’t generally stop work for client deliverables being a few days late, you would implement a pause if a client was repeatedly late on important deliverables or feedback and that delay started to make a material impact on your costs.
A well-crafted MSA might include a clause like this:
Work Stoppage. If Client fails to (i) make any payment when due, or (ii) cooperate as required by this agreement, and that failure results in increased costs for Agency, Agency may suspend its work (without liability to Client) until Client cures the breach. Stopping work does not limit Agency’s right to terminate. Work will not resume until Client has cured the problem for the stoppage and paid a pause fee equal to X% of the total project fee. Restarting work is subject to Agency’s availability when the stoppage ends.
This makes clear that once the client’s lack of cooperation starts to affect project profitability, work can stop until the problem is cured. This clause also allows the agency to charge a restart fee to compensate for the lack of cooperation – essentially the extra money that the Agency would have charged had it built a lack of cooperation into its original pricing.
Making Difficult Conversations Easier
Of course, enforcing client obligations doesn’t have to damage your relationship with your clients. While it’s crucial to have clauses that allow you to pause work or adjust fees, these should be used judiciously. Regular, open communication is key. Polite reminders that reference the agreed-upon obligations can help keep the project moving without creating tension.
The first few times you need to have these conversations, it may be difficult. Telling a client “no” or enforcing consequences can be difficult. A helpful tool for when things escalate is to develop a predefined policy or scripts for reminders or work stoppage notices can make those difficult conversations a little easier for your team.
Client Obligations Keep Projects on Track and Profits Protected
Clearly defined client obligations are critical for ensuring smooth project execution and protecting your agency’s bottom line. Many agencies make the mistake of assuming (without expressly defining) that clients will cooperate since that’s what’s needed for a successful project. But this assumption can lead to delays, extra costs, and even project failure.
By establishing clear expectations in both the MSA and SOW, and having enforceable consequences for non-compliance, agencies can manage their time, maintain profitability, and foster better client relationships.
