SOWs are used across procurement, technology, professional services, construction, and marketing. For in-house legal teams, they are a high-volume contract type that benefits significantly from templating and workflow automation. For a full breakdown of what every SOW must include, see our statement of work template guide.
What is a statement of work?
A statement of work (SOW) is a contract document that defines the terms of a specific project or engagement between a client and a vendor or contractor. It establishes the legal obligations of both parties for the duration of the project and provides a shared reference point for managing performance, resolving disputes, and confirming completion.
Unlike a master service agreement, which governs an ongoing relationship, a statement of work is project-specific. A new SOW is typically drafted for each project, even where an MSA already exists between the parties.
A statement of work is typically used when:
• A business engages an external agency, contractor, or specialist for a defined project
• The project involves multiple deliverables, milestones, or payment stages
• Multiple internal or external stakeholders need clarity on responsibilities and timelines
• The work has a defined start and end point rather than an ongoing service arrangement
Who writes the statement of work?
Typically the client writes the SOW, as they are defining their requirements. In practice, the vendor may contribute sections relating to how the work will be delivered, particularly the scope of work, methodology, and resourcing. For internal projects between teams, the project manager usually drafts the document.
Statement of work vs scope of work: what is the difference?
Both documents use the acronym SOW, which causes frequent confusion. They are related but distinct.
A statement of work is the overarching legally binding contract. It covers the full project: objectives, deliverables, timelines, payment, responsibilities, standards, and the scope of work as one of its sections.
A scope of work is a specific section within the statement of work. It describes in detail how the vendor will deliver the project, the tasks involved, the methodology to be used, and the specific outputs required. In isolation, a scope of work document is not typically legally binding.
Can a scope of work stand alone without a statement of work?
A scope of work can be used as a standalone internal document for briefing a team or project group, but it does not carry the legal weight of a statement of work. For any engagement with an external vendor or contractor where enforceable obligations are needed, a full statement of work is required. The scope of work section within it defines the delivery detail.
Statement of work vs master service agreement
A master service agreement (MSA) governs the overarching terms of an ongoing relationship between a business and a contractor or vendor: payment terms, IP ownership, confidentiality, dispute resolution, and liability. It is designed to be signed once and referenced across multiple projects.
A statement of work sits beneath the MSA. It defines the specifics of each individual project undertaken within that relationship. Where an MSA exists, the SOW does not need to repeat the general terms. It references the MSA and focuses on project-specific details: what will be done, by when, at what cost, and how success will be measured.
Where no MSA exists, the SOW must be more comprehensive and include general terms that would otherwise be in the master agreement.
Do you need both an MSA and a SOW?
For long-term or repeat engagements with the same vendor, having both is best practice. The MSA establishes the standing terms of the relationship once. Each new project is then governed by a lighter SOW that references the MSA and only addresses project-specific details. For one-off engagements with a new vendor, a standalone SOW that incorporates all necessary terms is appropriate.
When to use a statement of work
A statement of work is appropriate whenever a client and vendor or contractor need to formalise the terms of a specific project before work begins. Common contexts include:
• Engaging a design, marketing, or communications agency for a campaign or brand project
• Commissioning a technology vendor to build, integrate, or implement a system
• Engaging a consulting firm for a defined advisory or transformation project
• Contracting a construction or facilities firm for a building or fit-out project
• Briefing an outsourced provider on a specific operational project or process
Work should not begin before the SOW is agreed and signed. Once parties start performing under an unsigned SOW, it becomes significantly harder to enforce the terms or resolve disputes about what was agreed.
How in-house legal teams manage SOW volume
For enterprise businesses, SOWs can be one of the highest-volume contract types managed by the legal team. Marketing, technology, procurement, and operations departments all generate SOW requests, often under time pressure as projects approach their start dates.
The common failure modes in manual SOW management include:
• Business teams drafting their own SOWs from previous versions without legal oversight
• Inconsistent templates across departments with different risk positions and missing clauses
• No approval workflow, meaning SOWs are signed by whoever is closest to the project rather than an authorised officer
• Executed SOWs stored in email or shared drives with no centralised visibility or expiry tracking
Plexus addresses this through contract management automation. Legal uploads approved SOW templates, configures which fields business teams can modify, and sets approval routing based on contract value or risk level. Business teams generate and submit SOWs without involving legal on every request. All executed SOWs are stored, searchable, and tracked.
Standardise your SOW process
Plexus lets legal teams build approved SOW templates into a self-service workflow so the business can generate, approve, and execute statements of work without creating a bottleneck. See how Plexus contract management works.
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