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To structure a partnership agreement with another MSP, first decide how the relationship will work: referral, resale, subcontracting, shared delivery, or a separate joint business. Then use a master agreement for the parties’ baseline terms, with schedules that spell out services, customer or project details, service levels, fees, and security duties. The agreement should make clear who contracts with the customer, who performs each task, who controls access, who invoices, and who responds when something goes wrong.
This is a U.S.-oriented practical framework, not a jurisdiction-specific legal opinion. The right language depends on the parties’ actual conduct, governing law, customer commitments, and the data involved. Have qualified counsel tailor and review the agreement.
Choose the partnership model before drafting
“Partnership” can describe several different arrangements. Do not rely on the label alone: document the actual roles, decision rights, customer contract path, and money flow. Be explicit about whether either MSP may quote, make service promises, approve changes, or otherwise bind the other.
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Referral
One MSP introduces a prospect or customer to the other. Define what qualifies as a referral, whether and how compensation is calculated, when it becomes payable, and which party owns the sales process and customer communications after the introduction.
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Resale
One MSP sells or resells services delivered in whole or in part by the other. Identify which party signs the customer agreement, sets or approves the customer-facing scope, invoices and collects payment, handles complaints, and is responsible for credits or refunds. The selling MSP should not promise service levels or security measures that the delivery arrangement cannot support.
Subcontracting
One MSP contracts with the customer and engages the other to perform defined work. The agreement should map the subcontractor’s duties to the lead MSP’s customer commitments, including escalation, reporting, security, and service remedies. State whether the subcontractor may use further subcontractors and what approval or notice is required.
Shared delivery
Both MSPs contribute to service delivery. Assign each operational task to a named party, identify the decision-maker for changes and incidents, and establish how the parties coordinate customer communications. Shared responsibility should mean clearly divided work, not an undefined obligation for both parties to handle everything.
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A separate joint business
If the intent is to form a new venture, share control or profits, or authorize one party to act for the other, treat that as a distinct legal and commercial arrangement rather than assuming an ordinary services agreement covers it. Clarify the intended relationship and authority limits with counsel. The agreement’s wording and the parties’ real-world conduct can both matter to how the relationship is characterized.
Use a master agreement with service-specific schedules
A practical structure is a master agreement for terms that apply across the relationship, plus schedules for details that vary by customer, project, service, or regulatory context. This keeps the core relationship terms in one place while making operational commitments concrete.
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- Master agreement: legal entities, effective date, term, relationship model, authority limits, confidentiality, baseline security duties, liability allocation, dispute process, governing law, and termination framework.
- Service or project schedule: covered systems, deliverables, operating hours, exclusions, prerequisites, customer duties, tools, licenses, contacts, and scope-change process.
- Customer schedule: customer contract route, customer-facing responsibilities, approved communications, escalation contacts, and any customer-specific commitments.
- Service-level schedule: severity definitions, response and restoration targets, coverage hours, measurement method, reporting, exceptions, and remedies.
- Security or regulated-data addendum: access controls, data handling, incident coordination, subcontractor flow-downs, and any obligations required for the data and parties’ roles.
Keep the MSP-to-MSP commitments aligned with the customer-facing agreement. If the lead MSP promises a response window, security control, or remedy to a customer, it needs a workable obligation and escalation path with the delivery MSP to meet that commitment.
Assign scope and operational responsibility
For every service or customer, describe what is covered and what is not. Identify systems and deliverables, service hours, planned maintenance, dependencies, customer prerequisites, required licenses and tools, and the process for requesting, approving, pricing, and recording a change. Avoid relying on broad phrases such as “support as needed” without defining the work they cover.
Attach a responsibility matrix that names one accountable party for each activity and identifies who must be consulted or informed. Include, at minimum:
- Provisioning and deprovisioning accounts or systems.
- Monitoring and alert triage.
- Patching and change approval.
- Backup, restore, and recovery decisions.
- Incident investigation, containment, and customer notification.
- Documentation, reporting, and escalation.
The New York State Comptroller’s guidance emphasizes defining service expectations and understanding which vendors or subcontractors access protected information. Its education-related statutory requirements apply in their specific New York context, not to every MSP arrangement.
Make service levels measurable and manageable
A service-level schedule should translate expectations into targets the responsible MSP can actually meet. Define severity levels, support coverage, response and restoration goals, escalation contacts, maintenance windows, and availability measures where relevant. Specify how performance is measured, how exceptions are documented, how often results are reported, and what happens after a recurring miss.
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Choose remedies deliberately, such as service credits or a corrective-action process, and explain how they interact with the customer agreement. The FTC’s business-provider guidance recommends putting expectations, performance standards, and monitoring methods in writing. The New York State Comptroller describes an SLA as a way to set comprehensive measurable targets and remedies. Those sources support a disciplined approach, not a universal set of MSP targets.
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Do not assume that the MSP with technical access automatically owns every security responsibility. The 2022 joint MSP cybersecurity advisory stresses transparent allocation of security roles and baseline protections, including multifactor authentication for MSP accounts and monitoring. Put the parties’ actual division of security decisions and work into the agreement.
Specify the following in the agreement or security schedule:
- What information is confidential, which data categories may be handled, and the permitted purposes for using it.
- Where data may be stored or transferred, who approves access, and what safeguards apply, including unique accounts, least privilege, MFA, logging, monitoring, and encryption where appropriate.
- How credentials and access are provisioned, reviewed, and removed; how information is transferred securely; and how long data is retained.
- Whether downstream subcontractors may be used, what prior approval or notice is required, and which duties must flow down to them.
- What counts as a security incident, how promptly the other MSP must be notified, how the parties preserve evidence and cooperate on investigation and remediation, and who coordinates customer or regulator communications.
- How data will be returned, transferred, or securely deleted, and what format or confirmation is required.
FTC and New York guidance also emphasize written security requirements and attention to service-provider or subcontractor access. The details should fit the data and access involved rather than being copied as generic boilerplate.
If electronic protected health information is involved
Map the covered entity, business associate, and subcontractor roles based on what each party actually does with the data. HHS says that a cloud provider handling electronic protected health information on behalf of a covered entity or business associate is a business associate, including certain subcontractors, and that a compliant business associate agreement is needed. HHS also identifies service-level topics such as recovery, data return, security responsibility, and use and retention. That cloud-specific guidance does not decide every MSP arrangement; assess the actual functions and data flows to determine which HIPAA obligations apply.
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If New York education data is involved
Contracts involving student, teacher, or principal personally identifiable information may be subject to New York education-specific requirements described by the State Comptroller. Treat those duties as context-specific, not as nationwide terms for every MSP agreement.
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State the commercial mechanics in a way that matches the chosen model. Cover fixed and variable fees, referral or resale calculations where applicable, invoice timing, payment disputes, taxes, pass-through costs, expense approval, price changes, and responsibility for customer credits. Define the customer relationship as well as the revenue flow: who answers support requests and complaints, speaks for the service, may change or terminate a customer arrangement, and shares information when dissatisfaction arises.
Identify ownership and permitted use of each party’s pre-existing tools, scripts, documentation, configurations, deliverables, marks, and materials. Address operational data generated during service delivery where relevant, third-party software licenses, and responsibility for license, software, or hardware costs. Federal Reserve interagency third-party guidance identifies compensation, licensing and ownership, customer complaints, and responsibility for software and hardware costs as relevant contract subjects in its regulated banking context.
Allocate warranties, liability, indemnity, and insurance
Describe each party’s performance commitments and exclusions, and make responsibility for its personnel and subcontractors clear. If negotiated, define indemnities for matters such as intellectual-property infringement or confidentiality and security failures, together with claim notice procedures and control of the defense.
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Plan continuity, disputes, and an orderly exit
Define the initial term, renewal process, termination for cause or convenience, cure periods, and any right to suspend access or work for an urgent security risk. State payment obligations after termination and specify transition support, customer handoff, current documentation, data return or deletion, credential revocation, and cooperation in transferring services.
Assign backup and recovery responsibilities, set recovery objectives where appropriate, and decide whether continuity testing is required. Establish an escalation path for disputes and any mediation or other agreed steps, along with governing law and venue. Also decide whether essential service must continue while a dispute is being handled.
Federal Reserve guidance identifies continuity, recovery objectives, transfer to another provider after failure, and subcontracting controls as potential contract topics in its banking context. HHS highlights data return at termination in the ePHI cloud context. Apply those considerations to the actual service, customer commitments, and legal regime involved.
Check the structure against the real relationship
Before signature, walk through the arrangement from the customer’s perspective and confirm that the written responsibilities match actual operations. In particular, resolve who contracts with and invoices the customer; who controls scope and customer communications; who has privileged access or handles sensitive data; who bears service-level, incident, and regulatory duties; how revenue, costs, customer relationship, and intellectual property are allocated; and how either party can exit without disrupting service.
These decisions determine whether the agreement is workable. A qualified lawyer should review the contract against the parties’ jurisdiction, conduct, customer promises, and data obligations; no single clause set is legally sufficient for every MSP partnership.
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