Client offboarding is one of the biggest nuisances an MSP can face. You’re literally doing work for a client that either hasn’t paid their bills in a while, or that is taking their business elsewhere. Even if you take the positive view that the ex-client is “future returning revenue” rather than an ex-client, you are still doing work for no imminent reward.
This means that in a perfect world, you do the least amount possible. But of course they might have a new MSP, or be building an internal team, and want to have that documentation carry over. What are your obligations in this regard? Does the client have legal claim to any of the documentation you have on them? (Note: this is a blog post intended to spur discussion, not legal advice. Every jurisdiction is different, so please consult a lawyer when dealing with legal issues.)
Principle #1: You Can’t Own Facts
To determine who owns what, it’s important to first understand how copyright law differentiates works. Copyright law does not cover facts. In general, information about IT assets such as configurations, passwords, SSL certificates and so on would all be considered facts. Whether you populated them automatically or manually doesn’t matter – a fact is not something that you can own, in the legal sense. Specific information about client assets belongs to the client and you should always prepare to provide this information when they depart.
One complicating aspect of this is when the client is departing because they haven’t paid. From a legal standpoint, failure to pay is a breach of contract, but at the same time, client info (like passwords) is still client info. Even if you consider the departing client to be in breach of contract, that does not give you license to breach the contract yourself. Don’t hold basic client information hostage.
From a legal perspective, it’s probably not even worth it – there are other means by which you can compel a recalcitrant ex-client to settle their account. From a business perspective, it’s also good practice to simply hand over this information to the client. You don’t have to do anything more, but remember that you’ll be on the other side of this situation some day and will appreciate getting at least the basic asset and password documentation.
Principle #2: You Do Own Your Own Processes
Process documents, however, are unique works created by your team. When an employee creates a work, such as an SOP or other process document, that work gains copyright upon being published, and the copyright sits with the employer of the person who created the document in the context of their employment.
Now, technically, you are not obligated to provide any of the client’s documentation. The client does not own the rights to documentation pertaining to their systems, unless the contract specifically states as much.
One of the key questions surrounds the nature of an MSP’s process documentation. In general, work produced by a third party for a client is property of the client. An MSP’s client documentation, while it might well pertain to a particular client, is produced for the benefit of the MSP. That means that the client does not have rights to this documentation. One of the best ways to distinguish this is whether or not the creation of process documentation is part of the managed services contract or not. If they paid you to create this documentation, they likely have a claim to it.
Principle #3: Ethical Implications
The other question to consider is whether or not you should provide documentation to an exiting client. The short answer is yes, because it showcases your level of professionalism. Should the ex-client come to realize that the grass is not actually greener on the other side, you want to leave the client with a good impression. Because you don’t own facts like config information or passwords, you may as well provide them. But processes are unique to each company, even ones that are routine for MSPs, and you are not under obligation to provide those (and probably should not). At that point, all you’re doing is helping a competitor get the benefit from the hard work your team put into creating and maintaining that documentation.
Hopefully this clears up a few things about the best way to handle client offboarding. Because each jurisdiction can be different, you may wish to talk to a lawyer to get firm advice on this matter – it pertains both to contract law and intellectual property law – and we recommend that.
IT Glue is the gold standard for IT documentation software. To learn more about how we can help you manage your documentation so that it’s effortless to provide departing clients with what’s theirs, and keep what’s yours, sign up for a quick demo.