Your first client contract is one of the most important documents your agency will ever produce, and one of the most commonly rushed. New owners understandably want to get to the real work of finding clients and filling roles. The contract feels like paperwork standing in the way.
But the contract is what turns a promising conversation into a business. It establishes your right to be paid, defines what happens when things go wrong, and protects you from the most common disputes in staffing. An agency that places a candidate without one can find itself with no enforceable claim to a fee.
This checklist walks through the sections a staffing client agreement typically needs, explains what each one does, and lists the decisions you should make before writing it. It applies mainly to agencies in the United States, and it is general guidance rather than legal advice. Laws vary by state, and it is worth having a qualified attorney review your final document.
Before you start: decide which agreement you need
Staffing agencies commonly use different agreements depending on the model:
- Contingent placement agreements for permanent hires, where you are paid only if the client hires your candidate.
- Retained search agreements for searches where the client pays in stages regardless of outcome.
- Contract staffing agreements for temporary workers you employ and bill by the hour.
Some agencies use one master agreement with schedules for each type. Others keep them separate. Decide which you need first, because several of the sections below differ between them.
Section 1: The parties
Identify each party precisely, including full legal names, business addresses and the type of entity. If you operate as a limited liability company, use the company’s legal name, not your own. Getting this wrong can complicate enforcement later.
Check: Is the client’s legal entity the one that will actually pay the invoice? Large organizations sometimes have multiple entities, and the one you speak to may not be the one with the budget.
Section 2: Scope of services
Describe what you are providing: permanent placement, contract staffing, retained search, or a combination. Keep it clear enough that there is no argument later about whether a particular hire was covered.
Check: Does the scope cover every way the client might end up employing someone you introduced, including hiring them into a different role than the one you submitted them for?
Section 3: Fees
This is the heart of the agreement. For permanent placement, specify how the fee is calculated, most commonly as a percentage of the candidate’s first-year compensation, or as a flat fee. For contract staffing, specify the bill rates or refer to a schedule that lists them.
Check: Define exactly what “compensation” includes. Base salary only, or base plus guaranteed bonuses, sign-on bonuses and other guaranteed payments? Ambiguity here produces disputes when the invoice arrives.
Section 4: When fees become payable
State when the fee is earned and invoiced. For permanent placement, this is often the candidate’s start date. For retained search, list the installment milestones. For contract staffing, state the invoicing frequency, typically weekly.
Check: What happens if an offer is accepted but the candidate never starts? What if the client rescinds an accepted offer?
Section 5: Payment terms
Set out how long the client has to pay, the accepted payment methods, and any consequences of late payment such as interest or suspension of services.
Check: Can your cash position sustain the terms you are offering? This matters most on contract desks, where you pay workers before clients pay you.
Section 6: Candidate introductions and ownership
This clause protects your fee if the client hires a candidate you introduced, even if they do so later, through a different channel, or into a different role. It typically states that a fee is payable if the client hires an introduced candidate within a defined period after the introduction.
Check: Does the clause cover hires made by the client’s affiliates or subsidiaries? Does it cover candidates hired on a contract or freelance basis rather than as employees?
Section 7: Guarantee or replacement terms
For permanent placements, most agencies offer a guarantee period. If the candidate leaves or is let go within that period, the agency usually provides a replacement or, less commonly, a partial refund or credit.
Check: Is it a replacement, a refund or a credit? What triggers it? Are there exclusions, such as redundancy or a change in the role? Is the guarantee conditional on the invoice being paid within terms? Being specific here prevents most guarantee disputes.
Section 8: Conversion fees (contract staffing)
If the client wants to hire a contractor permanently, a conversion clause sets the fee payable. Without one, the client can take a worker you recruited and employed, and your ongoing revenue simply stops.
Check: How is the conversion fee calculated? Does it reduce as the contractor works longer on assignment?
Section 9: Non-solicitation
A non-solicitation clause restricts the client from recruiting your employees, including your contractors, outside the agreement, and sometimes restricts both parties from poaching each other’s staff.
Check: Is the restriction reasonable in scope and length? Overly broad restrictions can be difficult to enforce.
Section 10: Confidentiality
Both sides share sensitive information: candidate details, salaries, business plans. A confidentiality clause sets out how that information is handled.
Check: Does it align with any data protection obligations you have regarding candidate information?
Section 11: Responsibilities and compliance
For contract staffing especially, clarify each party’s responsibilities. The agency typically handles payroll, taxes and employment obligations. The client typically directs the work and is responsible for workplace safety at their site.
Check: Who is responsible for site-specific safety training, equipment and supervision?
Section 12: Liability and indemnity
These clauses allocate risk if something goes wrong. They can limit each party’s liability and require one party to compensate the other for certain losses.
Check: Are you agreeing to indemnify the client for things outside your control? Is there a reasonable cap on liability? This section is where a lawyer’s review adds the most value.
Section 13: Insurance
Many clients require agencies to carry specific insurance coverage and provide certificates.
Check: Do you actually have the coverage and limits the agreement says you have?
Section 14: Term and termination
State how long the agreement lasts and how either party can end it. Clarify what happens to fees for candidates introduced before termination.
Check: If the agreement ends, are fees still payable for candidates you introduced during its term?
Section 15: Governing law and disputes
Specify which state’s law applies and how disputes will be resolved.
Check: Is the chosen jurisdiction practical for you if a dispute arises?
Section 16: Signatures and authority
Make sure the person signing for the client has the authority to bind the organization.
Check: Is the signatory the hiring manager, or someone with contracting authority? In larger organizations, these are often different people.
Mistakes that show up in first contracts
Reviewing early agency agreements tends to surface the same handful of problems. Knowing them in advance saves you from discovering them during a dispute.
Copying another agency’s agreement wholesale. Borrowed agreements carry someone else’s fee structure, guarantee, jurisdiction and assumptions. Details that suited their business may be wrong for yours, and a contract that refers to terms or schedules you never defined creates exactly the kind of ambiguity that leads to arguments.
Leaving the compensation definition vague. “Fee of X% of salary” sounds clear until a candidate accepts an offer with a large sign-on bonus or a guaranteed first-year commission. Decide what counts and write it down.
Offering a guarantee with no conditions. A guarantee that applies even when the invoice is unpaid, or when the client eliminates the role, gives away far more than most agencies intend.
Forgetting the introduction window. Without a defined period during which a fee applies to introduced candidates, a client can wait a short time and hire your candidate directly with little risk.
Signing with the wrong person. A hiring manager’s enthusiasm does not always come with contracting authority. An agreement signed by someone who could not bind the company is weaker than it looks.
Never revisiting it. Your first agreement will not be your last. After your first few engagements, note the clauses clients questioned and the situations the contract did not anticipate, and update it.
Putting the document together
Writing a contract from a blank page is slow and error-prone, which is why many new agencies start from a template and adapt it. A good starting point lets you fill in your own fees, guarantee, payment terms and conversion terms rather than accepting generic defaults. A free staffing contract generator can produce a draft contingent, retained or contract staffing agreement with your own terms filled in, downloadable as Word or PDF, which you can then have reviewed before use.
Final questions before you send it
- Have you chosen the right agreement type for this engagement?
- Is your fee calculation unambiguous, including what counts as compensation?
- Are payment terms ones your cash position can support?
- Does the introduction clause protect your fee against indirect hires?
- Are your guarantee terms specific, including triggers, exclusions and conditions?
- If you are placing contractors, is there a conversion clause?
- Have you checked the liability and indemnity sections carefully?
- Is the person signing authorized to do so?
- Has a qualified attorney reviewed the final version?
Key takeaways
- Never present candidates before a signed agreement is in place.
- Choose the agreement type first: contingent, retained or contract staffing.
- The fee, introduction, guarantee and payment clauses decide whether you get paid.
- Define compensation precisely to avoid disputes over the fee calculation.
- Liability and indemnity are where legal review matters most.
- Starting from a structured template is faster and safer than drafting from scratch.
