How do you write a statement of work? Perhaps you’ve been tasked with drafting one for the first time, or are curious about anything you can improve.
If you’re an attorney who regularly drafts contracts for clients, one of your biggest concerns should be drafting agreements that are so airtight that they’re unlikely to ever end up in litigation.
One of the best ways to do that is to master the art of writing statements of work (“SOW”).
Brief detail
Within service agreements, the SOW is the heart of the deal. In short, it provides a blueprint of the expectations, deliverables, and responsibilities between a service provider and their client.
That means that when you draft them well, all the parties to a contract know what to do, when to do it, and how to pay for it. It sounds simple but as someone who used to litigate poorly drafted contracts for a living, I assure you it’s not.
In this post, we’ll dissect the critical nature of SOWs so that you can draft them in a way that keeps your clients in business and out of court. We’ll begin by explaining what a SOW is and the role it plays in the provision of services.
Next, we’ll break down the critical components of a SOW and provide some tips for writing them well. To finish things off, we’ll discuss common drafting mistakes to avoid.
There’s a lot to cover here, so let’s get started.
Understanding the statement of work (SOW)
At its core, a Statement of Work is a document that captures and defines the work activities, deliverables, and timeline a service provider will execute for a client.
You can think of the SOW as a narrative description of the project’s expected outcomes. At a minimum, it should include the services to be delivered, the scope of work to be performed, the responsibilities of both parties, the payment schedule, and the project’s objectives.
By clearly outlining what is expected from each party, the SOW helps to mitigate risks, manage expectations, and ensure that the project is completed on time, within scope, and on budget.
Also, as I alluded to above, a well-drafted SOW is one of the best weapons in your arsenal when it comes to helping your clients avoid contract litigation.
Another way to think of the SOW is as a project management tool. From a practical standpoint, it lets everyone know what they should be doing during all phases of a contract.
Legally, it binds the parties to those expectations and provides clear consequences for the failure to meet them. As a project progresses, it also helps stakeholders to allocate resources effectively, monitor progress, and make the adjustments necessary for keeping the project on target.
Essential elements of a statement of work
Part of knowing how to write an effective statement of work involves the careful articulation of several key elements of any relationship.
These components are critical for ensuring that the SOW is comprehensive, clear, and actionable.
For a comprehensive service agreement, the following elements are indispensable:
Objectives
Start with defining clear, measurable objectives. What does the project aim to achieve? Objectives should be specific, achievable, relevant, and time-bound (SMART). This clarity helps all parties understand the project’s end goals and provides a basis for measuring project success.
Scope of services
Detail the specific services to be provided. This should include the tasks the service provider will perform, the methodologies to be used, and the expected outcomes. The scope should be detailed enough to eliminate ambiguity and prevent scope creep (see below), but flexible enough to allow for necessary adjustments.
Deliverables
Clearly specify the expected deliverables, including reports, software, documentation, workflow automation, or any other desired outputs. For each deliverable, define the format, content, quality standards, and delivery timelines. This ensures that both parties have a shared understanding of what is to be delivered.
Performance standards
Establish the benchmarks for quality and performance. What standards must be met for the work to be accepted? Performance standards could include things like compliance with industry standards, response times, and error rates.
These sorts of guidelines ensure that the deliverables aren’t just provided, but that they also meet agreed-upon quality levels.
Schedule and milestones
Outline the project timeline, including start and end dates, and key milestones. Milestones are significant checkpoints or events, such as the completion of each major deliverable. This section should also address how delays will be managed, communicated and, if appropriate, penalized.
Payment terms
Money seems to be the driving force in many contracts so this is probably the term you’re least likely to forget. Nonetheless, I’d be remiss if I didn’t remind you that your SOW should specify things like pricing, billing schedule, and payment conditions.
Depending on the types of services involved, the payment terms may include fixed prices for certain deliverables, hourly rates for services, or a retainer model. Clarity in payment terms helps prevent financial disputes and facilitate a smooth client-provider relationship.
Acceptance criteria
Your SOW should also specify how deliverables will be reviewed and accepted. This includes the criteria for acceptance, the process for reviewing deliverables, and the timeframe for the client to accept the deliverable or request revisions. Clear acceptance criteria are vital for moving the project forward and resolving any disagreements about deliverable quality.
Change management
Finally, the SOW should detail the procedures for requesting and approving changes to the project.
This section might include how changes will be documented, how the parties will assess desired changes for impact on scope, timeline, and cost, and how they will be communicated among stakeholders.
A structured change management process is essential for adapting to project evolutions while maintaining control of the various egos involved.
How do you write a statement of work?
When it comes down to the actual writing of your SOW, the rules are basically the same as they are for drafting contracts. Drafting a SOW requires a balance between comprehensive detail and clear, accessible language. Here are our top tips for drafting airtight SOWs:
Strategies for clear and concise writing
- Use plain language: Avoid jargon and complex language to ensure the document is accessible to all stakeholders.
- Be specific: Use precise language to detail the scope, deliverables, and responsibilities. If you’re doubting the importance of this tip, just ask any litigator about the consequences of a lack of specificity. They’re likely to remind you that ambiguity leads to costly misunderstandings.
- Organize logically: Structure the SOW in a logical order, following the natural progression of the project from objectives to deliverables to timelines.
Strategies for managing the people involved
- Collaborate with stakeholders: Engage all relevant parties in the drafting process to ensure their needs and expectations are accurately reflected.
- Review and revise: Allow for multiple reviews and revisions. This iterative process helps to refine the SOW and ensure it fully aligns with the project’s goals.
These tips are all well and good – in general. But it’s important to remember that each SOW needs to be specifically tailored to meet the industry and tasks that pertain to it. Just because you drafted a brilliant SOW for your client in the garment manufacturing industry doesn’t mean that same SOW will work for a client in IT management. Be mindful of each client’s actual needs and ask plenty of questions about the realities of their industry.
Tools for drafting and managing SOWs
When drafting and managing Statements of Work (SOWs), the right software tools can make all the difference in ensuring efficiency, accuracy, and collaboration, especially for larger projects involving multiple stakeholders.
Here are some popular platforms and tools that can streamline the process:
- Contract management systems (CMS): These platforms offer end-to-end solutions for drafting, reviewing, and managing contracts, including SOWs. Tools like DocuSign, Concord, ContractWorks, and PandaDoc allow users to collaborate in real time, track changes, and manage versions, ensuring that everyone involved has access to the most updated SOW. They also provide automated workflows to track approval stages and reminders for key milestones and deadlines.
- Project management software: Platforms like Asana, Trello, and Monday.com help teams monitor the progress of tasks outlined in the SOW. These tools are especially useful for tracking deliverables, milestones, and deadlines. By integrating the SOW into these project management systems, stakeholders can have real-time visibility into project status, ensuring alignment with the agreed-upon terms.
- Collaboration and document sharing platforms: Tools like Google Workspace (Google Docs, Google Sheets) or Microsoft Office 365 (Word, Excel, Teams) enable teams to collaborate on SOW drafts simultaneously. This ensures all stakeholders can provide input, track changes, and comment on specific clauses, reducing the back-and-forth typically associated with contract drafting.
- eSignature platforms: Solutions like DocuSign and Adobe Sign allow stakeholders to electronically sign off on the SOW, which not only speeds up the approval process but also keeps a record of who signed and when. eSignature platforms ensure that SOWs are legally binding and easy to track without needing physical signatures.
- Change management tools: Since SOWs often undergo revisions during a project, tools like Jira or Wrike help manage change requests and track their impact on the overall scope, budget, and timeline. These tools offer structured change request processes that align with the SOW’s change management procedures, ensuring transparency and accountability when adjustments are needed.
- Document automation software: Tools like HotDocs or ContractExpress automate the drafting of SOWs by using templates. These platforms allow legal teams to create standardized SOW templates that can be customized for specific projects, reducing the time spent drafting repetitive content and ensuring consistency across documents.
Common mistakes to avoid when writing a statement of work
Just like any contract document, various pitfalls can undermine the effectiveness of a SOW and lead to project challenges and disputes.
Here are the top drafting mistakes you’ll want to avoid when crafting a SOW:
Vagueness
Vague and ambiguous language are contract kryptonite. Vagueness can lead to misinterpretations, misaligned expectations, and prolonged disputes over deliverables and scope. When in doubt, have a litigation attorney read your SOW and tell you whether they can spot any provisions that might lead to costly disputes.
Scope creep
Scope creep is the nemesis of any service provider. The truth is, without clear definitions of scope, projects can easily expand beyond the original intent, leading to increased costs, extended timelines, and resource strain (not to mention extreme frustration). To avoid this, define the project scope precisely and include a structured process for managing changes to the scope.
Misaligned expectations
In any relationship, misaligned expectations can be disastrous. In services contracts, failure to align the SOW with the parties’ expectations can result in not only dissatisfaction but also in costly litigation. Consequently, as you’re drafting, try to ensure that the SOW is fully integrated with the parties’ discussions and that everyone has a shared understanding of the project goals and deliverables.
Poor change management
The truth is, every project has its challenges and every challenge begs for changes. Inadequate processes for handling changes can lead to confusion, delays, and cost overruns. To avoid this, establish clear procedures for documenting, reviewing, and approving changes to the project or SOW.
While Statements of Work may seem fairly straightforward at first glance, they are actually rife with traps for the unwary. By adhering to best practices, listening to all stakeholders throughout the drafting process, and avoiding common/costly mistakes, legal professionals can draft SOWs that facilitate successful project outcomes, foster positive client relationships, and minimize the risk of disputes. Sounds like a win-win-win, doesn’t it?
Conclusion
Knowing how to write a statement of work (SOWs) is indispensable for attorneys navigating the complexities of contract law.
Be meticulous when articulating elements such as objectives, scope of services, deliverables, and payment terms.
Ensure that clear and concise writing is used and that there is collaborative stakeholder engagement and vigilant avoidance of common drafting mistakes. These are all paramount for crafting airtight SOWs.
Ultimately, adept handling of SOWs not only safeguards client interests but also improves the foundation of enduring client relationships.
