What is a Public Relations Agreement?

The universe of business-to-business contracts encompasses a huge variety of agreements including those that may govern the typical IT professional’s life such as employment agreements, consulting agreements, buyback agreements and even agreements related to the acquisition or sale of a business. This article though will focus on a contract specific to the public relations industry, the public relations contract.
A public relations contract is a master service agreement that typically governs the general terms and conditions under which public relations services are provided by a public relations firm to a client. When the services change, or when the parties want to amend the terms of the relationship, the parties will usually draft an addendum to the original public relations contract to cover only the subsequent engagement of services. Amendments can be done in one document or in pieces. In other words, a public relations firm can start with a solid framework or template and utilize that deal structure when dealing with these types of client matters. Regardless of how the particular engagement of services is drafted and presented, the public relations contract should include the following general contract provisions: A public relations contract is the initial or master agreement that establishes the general region of the parties and governs the terms and conditions of the work that is to be done. Public relations contracts are essential , and probably more significant in the public relations industry than perhaps in any other type of industry because the nature of the work requires that the relationship between the public relations firm and its client be recognized as a partnership or as a cooperative arrangement between two disparate groups that ultimately share the same goals.
In addition to creating a framework for the work that is going to be done, the public relations contract will typically outline the various protections that need to be in place to manage the expectations of both the public relations firm and its client. For example, the person at the public relations firm that handles a particular account will be concerned about the length of time that he or she is expected to have to devote to a particular engagement, what types of tasks can be assigned, and what the budget is going to be. Meanwhile, the person that is handling the contract on behalf of the client is going to be concerned about what happens if the public relations firm does not provide the service in a timely manner, what happens if the public relations firm overbills for services, or what if either party decides that they do not want to continue with the agreement.
Significantly, because many times the relationship is personal rather than contractual, the public relations contract should address the approach to be taken if there is a change in personnel. This would include the right to terminate the relationship if the individual assigned to the account leaves the company, an individual is assigned to the position, or if there is a change in title of the person that is assigned to the account. Other terms to be addressed in the public relations contract are limitations of liability, confidentiality, indemnification, choice of law, and jurisdiction provisions.

Essential Terms & Conditions to Include in Your PR Agreement

While your public relations firm may choose to use its own standard contract, a typical PR contract will include certain document elements that are essential to your relationship. These include:
Scope of Work: This section details the services that will be provided and lists a number of tasks that the PR firm will be undertaking on your behalf. The firm also includes a list of "assumptions" or "understandings" that it will be proceeding under. For example:

• Monthly PR activities
• Regular communications with the client
• Editorial calendars
• Participation in two quarterly diagnostic meetings

On the other hand, the client should include the following assumptions:

• Client will respond to requests within X number of business days
• Final editorial approvals will be made by X representative
• Client will make minimum X impressions each quarter

Payment Terms: In this section, your PR firm will define how it will be paid. Will it be paid by the hour, per week, per month, or according to some other formula? Will there be fixed monthly payments regardless of actual hours worked? Full payment will be expected regardless of the frequency of meetings or the quality of the services rendered?
Timelines: While the contract may run indefinitely, it is possible to include an ending date or at least a starting date by which the PR firm must complete its work. It is also possible to identify critical milestones along the way.
Termination Clause: The contract should have a clause outlining the process by which each party can terminate the contract. For instance, either party can terminate the contract for cause with a 10-day notice in writing. Or, if unpaid invoices are not paid within 30 days, each party can terminate the contract.

The Importance of Scope and Deliverables

One of the main reasons for hiring a PR professional is the expectation that he or she will produce results quickly. With that in mind, when entering into a PR contract, it is vital for the scope of services to be clearly defined so that (1) expectations on both sides are fully explained, (2) what services are being provided is made clear and (3) it is abundantly clear that the PR professional is being hired to address only the specific issues the client has identified as their priorities. Ambiguity on any of these points will inevitably lead to conflict and conflict is never good for long-term client relationships.
A PR client is not a passive observer when it comes to scoring PR "points." Every significant piece of coverage that is attained is one that benefits the client (not the PR agency) and therefore the client should have a say in what actions are being taken to attain that coverage. A clause in the contract should require the PR professional to obtain the client’s approval before executing any strategy designed to generate results. That will help to ensure that the PR professional is not working independently, but is rather actively collaborating with the client to determine the best approach to meet the stated objectives.
Within the scope of services, it is important to clearly define what type of work is expected from the PR professional, when it is expected, how it will be measured and how often the PR professional will be required to report on the progress of their work. A PR professional may provide guidance on what should be included in the scope of services, but it is up to the client to determine specific deliverables, whether that means weekly reports, monthly calls or daily updates.
Additionally, it is important to be realistic about what tasks the PR professional can accomplish. If contacts are not already in place, then a significant amount of time will probably need to be spent "making the calls" to pitch journalists. And if the client has a complicated message, this can take even longer.

Anticipating Legal Pitfalls in Your PR Contract

One of the most common legal challenges in public relations contracts involves intellectual property rights. In six different studies spanning 83 years, the IP research company LexisNexis has revealed that the average cost of litigation for proprietary information litigation has increased from $3.5 million in 1994 to $8.3 million in 2017. That’s an 80% increase in the last few decades. As a PR contract consultant, I cannot stress strongly enough to an agency the importance of including clear language on the ownership of ideas and work or client information and materials. When working on a PR contract, your disclosure and non-disclosure agreements should be ironclad with clauses that specifically exclude the use of any proprietary information without permission. Additionally, an agency must also protect its own information from future competitors. This is a must-have clause for every PR contract that involves a client sharing any confidential information.
Confidentiality agreements are a common source of litigation between an ad agency and a client. Intellectual property protection is important. The second part of the previous clause covers what can be used and what can’t be used during or after your contract. Your PR contract should include a clear and specific time limit for how confidential information can be used. Every PR contract should also include a clear definition of what is or is not considered confidential information. PR agencies should be very cautious when it comes to including certain information as confidential information. You should check your state’s laws to determine how sensitive your info really is—in my state (California), for example, even basic information isn’t subject to nondisclosure agreements (like the identity of your business clients).
Liability issues represent one of the other common legal issues in PR contracts. There should always be a limit of liability clause such that the client is liable for the full amount of the contract based on gross negligence and/or failure to fulfill the contract. There should also be a cap of the total damages against either party. As with other clauses, an agency should check their state requirements when drafting this section of their contracts.
A public relations contract can be a complex document. However, avoiding the big issues in them is critical to the integrity of an agreement.

Negotiating an Effective Public Relations Agreement

When negotiating a contract, there are a few key issues you should always ask and evaluate. This will allow you to enter into the agreement with reasonable safeguards.

• Speak to the PR agency about developing a communications strategy that meshes well with your business goals and objectives. Be sure this strategy is being implemented and results are being reported to you regularly.
• Are the services being performed on a time and materials basis, or does the agency include an overall "fixed price" for the services to be provided? The former arrangement is good for you if you want flexibility and you are absolutely sure to be able to supervise and be able to direct the work and monitor the ensuing costs. The latter is less stressful and much easier to digest but may not be as flexible as the former.
• Are all the costs and expenses being transparently accounted for in a way so that you can review and approve same?

Contracts are often made up of many pages and may have several attached exhibits and addendums. Read through all of it. Don’t be intimidated by complex contracts or agreements. It’s advisable to only use understandable contracts. Ask the agency to clarify any terms you don’t understand. Make sure you understand each and every element of a contract and how it affects you, your company, your finances and your bottom line. Understand the implications of entering into a PR contract – both positive and negative . If you don’t feel clear about anything, you should seek out legal advice.
Public relations contracts with PR firms tend to be of three varieties based upon the types of services provided:
Consultant Contract – for general strategy development and periodic advice and guidance.
Yearly/Monthly Contract – for ongoing assigned services or on-going PR retainer.
Project Contract – for specific defined projects (including public relations, digital advertising, SEO and development of collateral material, etc.).
As previously mentioned, you should seek the advice of qualified legal counsel. Contracts are not one size fits all. There are many different types of PR contracts.
Reading a contract and understanding each provision contained therein is vital. Also of critical importance is understanding the negotiation process used to develop the contract. You want to be sure that the terms of agreement reflect your needs and protect your interests. For example, if you enter into a one-year contract for services but the agreement carries over as a new contract after the year has lapsed, you may want to have the option of cancelling the contract at that point, especially if the terms after the first year become onerous.
In any event, when you need to negotiate the terms of a public relations contract, having the support of qualified legal counsel is your best option to avoid losing out on the benefits and advantages a PR agency has to offer.

The Do’s and Don’ts of Managing PR Agreements

With a strong PR contract in place, the next step is to ensure that your contract with the agency is being properly maintained and that the individual working on your business has the proper authority to bind the agency, or handle all of your dealings. Many times an agency has more than one person working on an account, therefore it is wise to make sure that they have unlimited access to the client, and that the client understands that limited access may mean limited results. Be sure that you have scheduled regular reviews of the contract to ensure that all parties are engaged and the results of the agency are meeting your expectations as stated in the contract.

US Case Law on PR Agreements

To better understand the impact a well-written PR contract can have, let’s look at a pair of real-world examples.
Scenario 1: A Regional PR Agency and Community Non-Profit
The PR agency agreed to manage digital media, event services and community relations for a nonprofit organizations seeking to launch a regional initiative to encourage literacy among children. In the letter of agreement, the agency committed to providing a minimum of five hours of support per week, including strategizing with leadership about event execution, managing volunteers and attending events. The board of directors of the nonprofit entity was developing a marketing plan and relied on the agency for guidance, which was provided without charge. The PR agency used its own resources to create flyers and promotional collateral and organized weekly meetings. However, because the letter of agreement contained only vague language, the board felt they were owed more than the agency provided after about one year. The PR agency had successfully met all deliverables of the letter of agreement; however, the nonprofit wanted more to be added to the contract (in the form of an addendum). Because the contract contained vague language related to the scope of services, it was unclear whether or not the nonprofit would have to pay for the additional work. After negotiating a compromise, the parties agreed to each pay for half of the PR agency’s time spent over a one-year extension and a formal marketing contract was developed to spell out the terms for the added services.
Scenario 2: A Large PR Agency and Private Luxury Tourism Client
The international PR agency was hired by a luxury travel service to manage public relations, social media, special events and other needs for a high-profile celebrity to accompany her family on a trip to an environmentally unique location. The PR agency was to coordinate directly with the other contractors hired by the client (including the private jet service, luxury resorts, and tour guides) and handle the media, travel and accommodation needs of the family during the trip. Due to the nature of the services provided, it became imperative that the PR agency manage the other contractors and remain as primary liaison while the family was abroad . While the client’s contract clearly spelled out the cost of public relations services, the contract was silent on other costs associated with the trip. When the celebrity’s private aircraft and accompanying staff made a two-hour stopover in a neighboring country en route to the final destination, such ‘layover’ created substantial costs from passport control, taxes and other fees. Due to that silence on additional costs, the PR agency could not charge for those hours on the invoice to the client. Similarly, when the family decided upon a helicopter excursion during the trip, those costs were not covered under the client’s contract and the travel agency had to absorb the unbudgeted trip to avoid a delay in service delivery. The PR firm spent a great deal of time with the client, yet was not compensated for that time.
On occasion companies may enter into contracts or letter of agreement that may not provide the best level of service within the budget range. Most PR firms don’t like to provide services without compensation due to the nature and reputation of our businesses. Yet, in order to be successful and to foster those client relationships, a PR agency must do what is necessary. The client will, of course, pay for those services at a later time when the agency can provide a complete PR package. Such relationships become beneficial to both parties when the PR agency submits a detailed bill showing the time and services that have been provided. A more thorough contract would specify both hourly and contingency fee structures, offering explanations of costs that might be incurred and protecting both the agency’s time and the client’s budget.
It is important to note that the PR industry is founded upon trust, credibility and a commitment to customer service. When well-defined contracts are in place, with clear scope of services, involved parties have open dialogue. When agencies find flexibility in their contracts, they may opt to absorb the difference in costs to live up to client expectations. On the other hand, clients appreciate a clear understanding when there are additional costs, even if those costs come as unplanned circumstances arise. Well-written PR contracts provide the foundation for clear expectations, superior client services and the professionalism that is the standard in our field.