SLA Best Practices: Protecting Your Agency’s Interests

Service Level Agreements (SLA) can be an important tool to help your agency deliver services in a way that meets clear and measurable standards and sets client expectations. For busy agencies, SLAs can be a valuable way to manage client expectations, protect your agency from risk, and ensure your business and clients are on the same page.  This article explores key issues to consider when using an SLA with your agency’s clients and how effectively using this document can help protect your business from risk. 

What are the Key Components of an SLA?

An SLA can be a valuable tool for your agency to clearly define the scope of your services. It can help set client expectations and establish a framework for accountability. Contractual parties often present an SLA as a supplementary document, such as a schedule, to a primary contract. This approach offers flexibility. To avoid enforceability issues, you must ensure your SLA is consistent with the terms of your main agreement. Conflicting provisions between the SLA and the main service agreement could lead to disputes. 

Using an SLA, your agency can formalise the standards your clients can expect. It can provide a structured way to address service failures. For agencies handling multiple client projects, SLAs can help align expectations and define measurable goals.

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SLAs can protect your agency and ensure smoother relationships with your clients by offering clarity and consistency.

An SLA typically lays out the specific details of services your agency will provide. The SLA should outline the performance standards you commit to meeting and the remedies available if you do not uphold those standards. These measurable standards help ensure alignment between your agency and your client. This reduces the likelihood of misunderstandings that could escalate into costly disputes. 

How Can an SLA Manage Client Service Expectations and Risk?

By using an SLA, your agency can manage client expectations more effectively. 

For example, you can use one to: 

• clearly define the scope of services,e.g. what is included and what falls outside the agreement;
• set measurable performance benchmarks – e.g. your response times, project delivery deadlines, or issue resolution timelines; and
• specify remedies for underperformance, such as offering service credits or partial refunds if agreed standards are not met.

An SLA also provides a reference point for discussions if a client raises concerns about your service quality. This can allow you to address issues objectively and transparently.

Advantages

SLAs can also help your agency manage risks effectively. An SLA addresses potential challenges upfront, ensuring both parties know how these situations will be handled.

You can use an SLA to lay out clear escalation procedures to ensure quick resolution of critical issues. For instance, you might require that client disputes be raised internally as a first step.

Your agency may not need SLAs for every project, and a commercial contracts lawyer can guide you on whether an SLA is required. You should also seek legal advice when drafting or updating SLAs to ensure they are clearly worded, tailored to your agency’s specific services, accurate, and designed to reduce risk.

Should You Specify Remedies and Resolutions In Your SLA?

Things can go wrong in business, and sometimes, you might not deliver as the client expected. To this end, you can draft SLAs with provisions that address service failures and manage them effectively. For example, you can offer up remedies such as service credits or refunds and clearly state the conditions under which they apply. 

Your business can use remedies such as service credits to improve professionalism and customer satisfaction, which can help with risk management when things do not go as planned. Proactively proposing your own service levels and remedies can also give you greater control and foresight over what you need to do if things go wrong. 

In summary, an SLA can be a wise investment for an agency. However, it is essential that you fully understand an SLA and, when it is necessary, its implications and whether it is appropriate for your business purposes. If you need support, a commercial contracts lawyer can help guide and draft a bespoke SLA to help protect your business. 

Key Takeaways

These contracts can give agencies tools to manage their client relationships effectively by ensuring clarity. By defining expectations, setting measurable standards, and providing remedies for service failures, an SLA helps your agency deliver high-quality services and maintain smooth client relationships. If you need support understanding whether you need an SLA or how to draft one, you should seek legal advice from a commercial contracts lawyer. 

If your agency needs help drafting or reviewing an SLA, our experienced contract lawyers can assist. As part of our membership, you will have unlimited access to legal advice and support for a low monthly fee. Call us today on 0808 196 8584 or visit our membership page to learn more.

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