How to review a statement of work like a pro

Introduction

So, you’re staring at a shiny new Statement of Work (SOW), ready to jump into your next project. But before you grab your favorite pen and sign on the dotted line, it’s time for a little detective work. A Statement of Work might look like a harmless piece of paper, but hidden inside could be a maze of potential pitfalls, vague language, and traps that could turn your dream project into a nightmare.

Let’s walk through what to look out for in a Statement of Work. Think of this as your personal Statement of Work survival guide.

Read: Understanding scope and complexity in your business contracts

What is a statement of work, anyway?

First, a quick refresher: a Statement of Work is a document that outlines the specifics of a project, including what needs to be done, by whom, and by when. It’s like the instruction manual for your business project. And just like those confusing IKEA manuals, if it’s not clear, you’re going to have a bad time.

An Statement of Work typically includes details about deliverables, timelines, payment terms, and more. It’s a crucial part of any project agreement because it sets expectations and defines the scope of work.

But, just because something is written down doesn’t mean it’s clear or fair. Here’s what you need to keep an eye on.

1. Scope of work: The “what”

The scope of work is the meat of your Statement of Work. It outlines exactly what work will be done, how it will be done, and who’s doing it. But beware of vague or overly broad language here—this is where scope creep begins.

Be specific

Look for precise language that clearly defines the tasks and responsibilities. Phrases like “assist with marketing” or “support project development” are as vague as they come. Insist on specifics: “create a 5-page website, including content, design, and SEO optimization.”

Deliverables

What exactly are you expected to deliver? And in what format? “Create a report” is different from “Create a 20-page report with charts and analysis.” Make sure it’s crystal clear what’s expected to avoid any “but I thought you meant…” conversations later.

What’s NOT included

Sometimes, it’s just as important to clarify what you’re not doing. Explicitly state any tasks or responsibilities that are out of scope. This will help prevent your client from asking for “just one more thing” a dozen times.

Read: Why you should always define deliverables in service agreements

2. Timelines and milestones: The “when”

Deadlines are essential, but they can also be a trap if they’re not reasonable or well-defined. Check the Statement of Work for realistic timelines and clear milestones.

Realistic deadlines

Make sure the deadlines are achievable. If the Statement of Work says you need to “develop and launch a new app in two weeks,” you might want to pump the brakes. Clarify the timelines and ensure they make sense for the work required.

Milestones and checkpoints

Look for specific milestones and checkpoints along the way. This not only breaks the project into manageable pieces but also ensures you get paid for your work as you go. It’s like a marathon with water stations—you don’t want to wait until the end to see if you made it!

Dependencies

If your deadlines depend on someone else’s input or actions, make sure that’s clearly stated. “Completion by X date, subject to receiving Y information from the client” can save you from being blamed for delays you didn’t cause.

3. Payment terms: The “how much”

Ah, the section everyone loves—payment terms. Make sure this part of the Statement of Work is as clear as daylight. Here’s what to look out for.

Payment schedule

Does the Statement of Work specify when you’ll be paid and how much? Look for details like “50% upon signing, 25% at milestone 2, and 25% upon final delivery.” The more specific, the better. No one wants to chase down payments with vague terms like “upon completion.”

Late fees and penalties

Does the Statement of Work mention any penalties for late payment? Adding a clause like “Payments made more than 15 days past due will incur a late fee of 1.5% per month” can motivate your clients to pay on time.

Expenses and reimbursements

Clarify whether any additional expenses will be covered. If you need to travel, buy special software, or rent a llama for an ad campaign (hey, it could happen), make sure the Statement of Work specifies who foots the bill.

4. Revision and approval processes: The “how many times?”

Revisions can be a freelancer’s worst nightmare. Make sure the Statement of Work outlines a revision and approval process.

• Number of revisions: How many rounds of revisions are included in the agreed price? “Unlimited revisions” sounds like a bad reality TV show. Make sure the Statement of Work specifies something reasonable, like “two rounds of revisions included; additional revisions billed at $X per hour.”

• Approval timelines: Is there a set period for the client to approve or request changes? You don’t want to be waiting forever for feedback. Specify, “Client must provide feedback within five business days of receiving each draft.”

5. Responsibilities and roles: The “who does what?”

A Statement of Work should clearly define the responsibilities and roles of everyone involved in the project.

Client responsibilities

What is the client responsible for? Providing content, giving access to systems, or approving designs? Make sure their responsibilities are outlined clearly to prevent delays on their end.

Third-party involvement

If there are third parties involved, like subcontractors or agencies, make sure their roles are clearly defined. Who’s responsible for managing them? Who pays them? The more clarity, the fewer headaches.

6. Intellectual property and confidentiality: The “who owns what?”

Make sure the Statement of Work addresses who owns the intellectual property (IP) you’re creating and any confidentiality agreements, unless this is already covered in the main services agreement.

Ownership

Are you transferring all rights to the client, or are you licensing them for limited use? Clarify this upfront. If you’re retaining any rights (like using the work in your portfolio), spell it out.

Confidentiality

If you’re handling sensitive information, make sure there’s a confidentiality clause. This protects both you and the client from any leaks.

Read: NDAs 101: Why defining confidential information can make or break a deal

7. Termination clauses: The “what if?”

Nobody likes to think about the project going south, but it’s essential to have a termination clause in place.

Grounds for termination

Define under what circumstances either party can terminate the Statement of Work. Non-payment? Breach of contract? Mutual agreement? Lay it all out.

Notice period

Specify how much notice is needed for termination—14 days, 30 days, etc. And clarify what happens to any work in progress or outstanding payments.

Read: The hidden dangers of auto-renewal clauses in contracts

8. Dispute resolution: The “let’s avoid drama”

Lastly, check the Statement of Work for a dispute resolution clause. Nobody wants a full-on legal battle, but sometimes disagreements happen.

Mediation or arbitration

Consider having a mediation or arbitration requirement before any court action. It’s like marriage counseling but for business. This can save time, money, and preserve relationships.

Conclusion

A well-crafted Statement of Work is your best friend when starting a new project. By looking out for clear scope, timelines, payment terms, revision processes, roles, intellectual property rights, termination clauses, and dispute resolution methods, you’ll protect yourself from potential pitfalls and set the stage for a successful collaboration.

Remember, don’t be afraid to ask questions or request changes to the Statement of Work. It’s better to clarify now than to deal with headaches later. And if something doesn’t feel right, trust your gut—it’s usually smarter than you think.

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