Understanding the Basics of a PR Agreement
A public relations or PR agreement is a type of agreement that defines the scope of work that is going to be performed by a public relations agency or consultant in relation to the client’s business. Alternatively, it may function as a means for a business to promote the public relations work of its agency or agencies.
PR agreements often include the scope of work to be performed, the length of the agreement, fees, expenses, and various boilerplate contractual language. All PR agreements, particularly those in with a clear benefit to Illinois consumers, should be read carefully and understood before you enter into them.
PR agreements are common to companies that are merging and acquiring. During this period , public relations and marketing efforts are essential to keeping employees, clients, and important relationships with key stakeholders intact. A PR firm may be asked to take charge of a PR campaign to maintain public confidence in a company or brand before a transaction closes. Owners of a firm can also use these contracts to serve as additional verification of the company’s viability when approaching a lender or potential investor.
Many of these agreements will provide for the transfer of ownership of PR work to the client, with exceptions for the PR firm to keep copies of the work. Drafting lawyers thus may need to assess ownership issues with some care, in some instances to exclude work that is being done on behalf of third parties (including competitors).
Key Components of a PR Agreement
The elements of a PR agreement are similar to other types of contracts. A good PR agreement should specify the following:
Scope of services. The agreement should itemize the services the PR agency will provide to the client. An agreement rarely states every single service the agency can perform, but at a minimum, it should include the main areas of service to be provided in a clearly defined manner.
Payment of services. The methodology for paying for services needs to be detailed. For example, the payment schedule might be hourly, retainer, commission or by some other method. The agreement should also discuss any expenses that the agency will or won’t incur on the client’s behalf, as well as how those expenses will be handled. It can be beneficial for the client to pre-approve any expenses over a certain threshold.
Rights of the parties. The agreement should specify the rights of each party. Provisions that are logical for the client usually include: an agency limited to promotional work during the life of the agreement; a minimum performance level that must be met by the agency; and a clear definition of what is an appropriate basis for termination by either party. In addition, the agreement should clearly state that both parties have the right to use the other’s name, trademark, and likeness for promotional purposes.
Responsibilities of the parties. Rights and responsibilities should go hand-in-hand. The client needs to clearly state its responsibilities, which usually will include: making staff available to the agency, providing information to the agency as requested, and meeting on a regular basis with the agency. The agency’s responsibilities should include meeting agreed upon performance levels, exercising its best efforts, maintaining confidentiality, and securing the client’s approval for major activities. If the agreement is for a joint venture, the parties’ respective responsibilities and contributions should be outlined.
Ownership and right of use of materials. The ownership section is usually divided into two parts: ownership of existing intellectual property, such as trademarks and patents; and ownership of newly created intellectual property, which generally is owned by the creator of the property unless otherwise agreed in writing. The right of use section defines whether and how the newly created intellectual property can be used or marketed.
Customizing a Public Relations Agreement
When it comes to public relations consulting, a one-size-fits-all approach doesn’t make sense for clients or service providers. From the scope of work to be performed, to the compensation to be paid, PR consulting agreements are customized to fit each engagement. In this section, we consider how PR consulting agreements can be customized for specific engagements and what you should keep in mind when reviewing and negotiating the key issues.
Compensation
Each PR engagement is different, with its own unique scope of work and details. As a result, the fees charged by the PR firm to the client will vary based on those factors, as well as the experience of the client contact. The client contact is typically a senior vice president or above at the client, or, in the alternative, the vision behind the PR initiative. A more junior contact may not be charging as high a rate, but ultimately the fees will be correlated to the level of sophistication of the client’s business.
The PR consultant will often also be paid a retainer. This serves as the minimum amount that the PR consultant will earn over the set retainer period. Some PR firms require the client to pay a retainer upfront (before the services are rendered). Others invoice at the end of a given month. Either way, the parties should agree on the type of retainer, if any, to be paid.
Proration of a retention should be avoided. A retention is typically paid as a monthly fee with the PR consultant committing to 40 hours per standard work week (Monday through Friday) at a set hourly rate. As such, if a client only bills 160 out of the 184 hours in a month (four weeks), it should not then be able to demand the remaining 24 hours of service in either the next month or the remaining months of the retainer period. Instead, a proration applied to a holding of 160 hours, whereby the PR consultant would still receive 100% compensation for the first 160 hours, is most common.
Additionally, more often than not, third party billing will have to be reviewed by the client. For example, if the firm has to courier a package, the client should ultimately approve the invoice and pay, and not the PR firm. Similarly, travel to client offices also oftentimes requires client approval.
Term
Whether a PR consulting agreement is for a defined or indefinite term, termination provisions should be included. In some situations (e.g., legal compliance, force majeure), you may want to have an opportunity to terminate the agreement "for cause" – meaning without written notice. But in the event that a force majeure situation does arise, and you have already committed to being retained until December 31, for example, forte maison such an agreement could be meaningless.
Additionally, it may be beneficial to your interests that termination for cause events are listed. They may include:
Assignment
Assignment can be subjective and vary from contract to contract. In this section, it is particularly important to protect the parties’ interests. While a public relations agency is a unique service and therefore difficult to assign, there may be instances where one of the parties is sold or merges with another business. In this situation, assignment should be subject to written consent by the other party. Further, if the agreement is terminated for cause, there should be no assignment whatsoever.
Confidentiality and Non-Disclosure
Confidentiality is often a critical component of a PR consulting agreement, particularly in the case of pending acquisitions or financings, where all confidential information must be tightly controlled. You need to protect the disclosures made to you by the client or third parties, while at the same time accommodating FRP client needs and concerns about disclosure or proprietary information.
Legal Aspects In a PR Agreement
A thorough public relations agreement will also cover the legal framework in which the relationship will operate. The following are some common legal aspects that should be covered in PR agreement samples prepared by a business lawyer:
Confidentiality
Depending on the type of work that the public relations entity is performing, the PR specialist may need access to highly confidential business information. In addition, the PR agency will often be required to prepare custom marketing and advertising materials that contain proprietary business information. Confidentiality clauses are critical in these circumstances to ensure that the confidential information it receives from its client is not released to third parties without prior consent. Likewise, the PR agency should be sensitive to the fact that there is a high risk for data breaches with the sharing of confidential information with subscribers or third party advertisers. A comprehensive confidentiality clause in the PR agreement will clearly outline the responsibilities owed to both the client and the public relations consultant.
Termination
Careful consideration must be given to the conditions under which the public relations agreement can be terminated by either party. Further , there should be clear stipulations to the effects of termination once it happens – that is what obligations remain (or do not remain) for the terminated agreement. Conditions should also be discussed concerning the assignment and ownership of materials and assets created during the term of the agreement.
Compliance with the Law
It is also critical for any business or independent contractor who is providing a specialized service to ensure that its operations and dealings are in compliance with the law. While PR specialists will value creative freedom when preparing advertising and marketing campaigns, they should still not be left exempt from liability arising from a failure to comply with the law. If particular advertising is deemed to be misleading or deceptive to consumers, the PR consultants may be subject to liability even if the campaign was designed by the client and not the PR consultant. It is therefore important to have clear compliance clauses in the PR agreement.
Using a Public Relations Agreement Sample
Agreements, including PR agreements, tend to follow a similar form, though also are free game for the creativity of the parties involved.
Any discussion about how to best use sample agreements is first prefaced with the caveat that no one agreement is like another. To the extent that the parties are different, the services being provided are different, and the overall goals of the contracting parties are different, then the only thing that is likely to make any one PR agreement similar to another is the fact that the two or more parties have chosen to call it an agreement. Accordingly, while sample PR agreements are useful for identifying what should be (or should not be) in a PR agreement, they cannot be relied upon as conclusive authority for drafting the actual agreement. That is to say, never use a sample PR agreement as is, without first making sure it satisfies your requirements from both a legal and a business perspective.
Assuming you’ve got a sample PR agreement that seems to be pretty close to what you and the other party envision for the relationship, there are several strategies you can employ to ensure that you get the best possible result. First, as mentioned above, make sure you aren’t using a sample PR agreement that can’t be adapted for your purposes. If it’s so old that it doesn’t reflect how PR agreements are written today, don’t use it. If it doesn’t deal with the issues that a contemporary PR agreement deals with, don’t use it. And, if it doesn’t deal with the issues that your particular PR agreement should deal with, definitely don’t use it. Now, that said, sometimes PR agreements are written as a gimmick, not with a practical purpose in mind. In those instances, it may not be necessary to amend the sample PR agreement too much, though you still need to read every word; the wording may make a huge difference if you happen to be the unlucky entity that finds itself in litigation.
Second, when amending a sample PR agreement, change the text only if necessary. If something is already in the sample PR agreement, then you don’t need to play around by removing it, particularly if you may need to reproduce it in the new PR agreement. For example, if the sample PR agreement contains a clause regarding force majeure (an event that makes performing impossible, such as a natural disaster), don’t remove it as unnecessary. As with all other provisions, think critically and be sure to ask your attorney if something seems out of whack or is potentially confusing.
Third, before entering into a PR agreement, review it with your attorney, particularly when it includes particularly complicated terms and issues. The importance of a PR agreement cannot be overemphasized, and so it’s crucial that you know what you’re agreeing to before you decide to engage another party. In the end, an ounce of prevention is worth a pound of cure, and you don’t want to end up having to go through litigation because you didn’t get the right kind of PR agreement.
Where to find a Public Relations Agreement Sample
An essential resource for finding reliable public relations agreement samples is the Internet. Several online legal platforms offer databases of general and industry-specific contracts that can be downloaded and customized to your specifications. Generally, these services are subscription-based but allow you to view all of the contracts included in their libraries for a single monthly fee. In addition, a subscription-based legal platform can offer you access to other forms of sample contracts, along with an array of other online resources. Even if you are only using a sample contract for additional clarity or inspiration, you will want to avoid samples that found on a personal blog or a private forum .
Professional organizations for public relations specialists or business professionals can be another source for contract samples with clauses specific to the PR field. Newsletters and printed publications from an organization of public relations professionals may also provide you with valuable sample agreements.
Hiring a lawyer is often the best way to find an appropriate, reliable public relations agreement sample. When you hire an attorney to draft a contract for you, you will know that it was designed with your specific needs in mind. If you are trying to compare agreements to determine which one is right for you, having an attorney review the contracts could help you to determine which one covers your bases most effectively.