The #1 contract you need to make sure you have as a MSP

Did you know there is one contract that stands between you and business disaster for MSP businesses missing this could be the difference between smooth sailing and shutting your doors. So today we have Paige Bennett, Seven Figure, MSP's general counsel. And I'm Michelle Terpser at Seven Figure, MSP's chief revenue officer. And we're going to go ahead and jump right in. All right, Paige, so before we jump into that one contract that is so important for MSP business owners, can you share with us a little bit about the biggest legal mistakes that you see for. For MSP business owners?

Absolutely. Well, one of the biggest mistakes I definitely see is no contracts.

Oh, yeah, that's a problem.

Yeah, it is a problem. And it's especially a problem when you want to enforce an agreement and you don't have an agreement. And then the second biggest mistake, I think, is when people have a contract, they did not sign it, they did not have it countersigned, they don't know where it is. So they did the right thing by having a contract, but they can't tell you where it is. And that, again, is as if you didn't have a contract. Aside from that and the need to at least have a contract, there are other mistakes in business that, that I help with, I've helped Chris Reiser with for the last at least four years, are helping you to manage employees and personnel. Things have changed a lot since COVID Right. And mostly employees are remote, especially in this industry, and people don't understand that there are risks of where your employees work. Just because you might be based in a state or a city where you understand the laws that govern you, your employees might be in a different state where they have completely different laws that do apply to you, even though you only have one employee there. Other countries, right. We have, we have employees in Canada, in Spain, in Puerto Rico. Those are all things that you need to consider when you're dealing with personnel issues. Whether it's just hiring somebody, whether it's onboarding somebody, whether it's putting out employment offering to somebody, those little things can get you later on if you're not prepared for them.

Yeah, that is such an important thing. And you know, as a chief revenue officer that hires a lot of people, those processes are really, really important. And I can't imagine not having those things in place in order to do it effectively and to limit our risk exposure and offer that employee a good experience, experience onboarding with us as well and making sure we have mutual understanding. One thing that you had said a little bit earlier that I want to dive deep into is not counter signing contracts. And to me that gets me actually especially pretty hard because you had the intent, right, and then you didn't countersign it. What is like one tip you have for somebody listening right now that maybe is looking at listening to this episode right now and saying, oh, shoot, how do I now go back to all these people who didn't sign, sign and get it signed? What would be your advice?

Well, if you have not signed it yourself, you can go ahead and sign it. And I would recirculate it as the fully signed version to the other party on the contract. If you haven't gotten the other party to sign it, you should change your processes first and make sure that you literally are unable to provide them any services until you have a fully signed contract from them. And I know there are safeguards out there that you can implement. Right. To make sure you have a signed contract before you pick up a pencil or, or type on the keypad to work with them. And if they haven't signed the contract, let's say now you're looking back and you realize, oh, shoot, I thought I had this signed. They never signed it. I've been working for them for 10 months. You can generally backdate a contract as long as both parties agree to it and say, oh, we just forgot to sign it, let's sign it now. And we are agreeing though, that the effective date was sometime in the past, but you have to make sure that's very clear.

Yes, I think that that's a really good recommendation and it's so important and many people might be saying, wow, that's going to be an awkward conversation. However, I don't think it will be. I think it's actually an empowering conversation. It also gives you an opportunity to talk to maybe some of your best clients. You haven't had an opportunity to talk to them in a while. Maybe you'll get an upsell from them. Maybe you have an opportunity to increase your service offering or increase your price per receipt. So anytime something's hard in business, I personally always try to think about what's the upside or the potential or where could I benefit from this?

I agree. It's. You can see it as an opportunity if you look at it instead of as an uncomfortable conversation, but as an opportunity to reconnect, like you said. Yes, I think that's. Yeah, that's a great way to look at it.

All right, so tell us, what is the number one contract that MSP businesses need to have in place.

That's such a hard question to answer because I wish there was just one. Of course, I think having an msa, the Master Services Agreement, making sure it's signed by both parties, until you have that, they don't have to pay you anything. And that's just the bottom line. Aside from the MSA though, which I think is the obvious answer, I think that another very important contract to have in place is a non solicitation and that could be part of your non disclosure agreement as well, or it could be two separate agreements. Because even though you're working as a contractor with your client and even though the client is uses other vendors, of course you want to make sure that any information that you are disclosing to your client, whether that's client lists, techniques, playbooks, security measures, whatever it is that your client is exposed to, they're not going to take that and run with it and go hire somebody else and use all of your great ideas. So if you have a really tight NDA and a non solicitation agreement, then you are going to be less likely, I think of a being worried about that happening. But also you're going to have some pretty good ammo if it does happen.

Yes, I think that that is so incredibly important. We all work so hard to make sure we deliver the best experience possible for our clients and protect them the best we can. And the last thing we don't want to have happen is to be missing that part in our contract stack. So thank you, that was an awesome one. And I'm sure that a lot of people listening right now are going to go back and check and make sure that they have their I's dotted and their T's correct.

Well, thankfully we have those in the MSP contract kit templates that any clients of ours can access. And if they get the MSP contract kit, there's many other contracts in there that I highly recommend you use. But you have the MSA template and you have the NDA template and I believe there's a non solicitation template as well.

Yes, awesome. I mean I think it's so important to have that bundle and a starting point so that you can make sure that your bases are covered.

Yes.

For all of our listeners right now who have jumped in are ready to purchase the contract kit. Like what do they need to do before they use it?

Remember that we are not your attorneys. Right. And people are laughing because anybody here at the live event has heard me say that over and over. Yes, but really what that means is you need to make sure that any contract that you are going to use for your business is enforceable. Yes. Right. Otherwise, you're just spinning your wheels. And in order to ensure that it's enforceable, you hire a local council or you just have a consult with a local council in your state, in your city, who can tell you this term will work here or this term won't work here, and you can tweak it. It's also important when you're having those conversations with council, and we actually will provide this service to some clients as well, is to understand what your goals are when you're having these contracts put in place. What, what are you trying to achieve that will really help? A good attorney will want to know that so that they can really help you get to the end point in as little steps as possible. And that way you feel like you're on a team, I think, with your attorney as well.

Yeah, I love that so much because MSPs have very specific needs when it comes to their legal. Their legal coverage and support. And so what I love about what we're doing is we're providing them with the templates, the baseline, the foundation. And like you said, it allows them to have a wonderful relationship with their local council and make sure that they're covered beyond just the template. But that nothing is being missed in terms of the contract stack, I would like to say, for an msp.

Agreed.

So we would love to know what contracts do you have in place right now. Let us know in the comment section below. And if you're feeling like perhaps you might be missing one. The good news is that you can grab our contract kit right now and get started today. And all of the information is in the notes and below so that you can take action right away. And don't forget to like and subscribe. All right. And thank you, Paige, so much for this amazing conversation. I cannot wait for our next conversation.

Thank you.