How much does an NDA cost?
NDAs are essential for protecting sensitive business information and keeping you, your clients, and your business partners safe.
But how much room should they take up in a law firm’s budget?
Knowing everything about the cost of an NDA agreement helps with accurate calculations of legal fees and ensures you don’t cut corners while safeguarding confidential information.
So, with that said, let’s answer the most pressing question first.
How much do NDAs cost?
Generally speaking, an NDA is made up of multiple items. According to ContractsCounsel, you’ll be looking at the following average prices:
- An hourly rate between $200 and $350 for any NDA-related consultations you may need
- For lawyers who work on a flat-fee basis, the average is $285 for an NDA.
These prices factor in the cost of NDA application forms, as well as the cost of drawing up and signing the legally binding document itself.
Let’s break down the precise factors that figure into the overall cost of turning your non-disclosure agreement into a legal contract:
Hiring lawyers for detailed NDAs
Of course, unless you have detailed know-how regarding how to write an NDA, you’ll want legal counsel for this.
More specifically, you’ll need the help of a qualified lawyer.
The cost of hiring a lawyer depends primarily on two things: The specific practice of law where they work, and the expected timeframe.
Choosing between hourly and flat rates also plays a part.
Hourly rates for NDAs
As mentioned you’re looking at between $200 and $350 per hour, which sits in the middle of the average range ($100 and $400 per hour in 2022).
Attorneys still in training, or in less popular locations, are likely to charge less than those in major cities or with many years of experience.
It’s also worth noting that the fees lawyers charge might change depending on the client’s legal needs, and the type of information involved.
For example, a mutual non-disclosure agreement between two large companies that operate in multiple locations might warrant a higher cost than a simple attorney-client confidentiality agreement.
If the disclosing party wants to incorporate many exclusions, this can also complicate matters.
In short, it’s all about the amount of legal work that’s required of the lawyer.
Working with one set of state laws is a lot less labor-intensive than incorporating three or more, for example.
Flat fee rates for NDAs
The major advantage of a flat fee rate is that you know what you’re going to get from the start.
So, even if you need to start with the very basics, like how to sign an NDA, your costs won’t go up if your legal proceedings take longer than expected.
Flat fee rates also don’t change depending on the information in question. Complex company information won’t cost you extra later in the process.
However, this is why flat fee rates for NDAs can seem more expensive, as they’re designed to encompass everything.
If your resources are limited, such as if you’re an entrepreneur, startup, or small business, you might be better served to choose this option nonetheless — the predictability of the price means you know exactly how much room you need in your budget.
Creating basic NDAs
While it’ll generally be the role of professionals to create your NDAs, it’s never a bad idea to get a feel for what they look like.
To that end, it’s useful to rely on pre-existing outlines.
Additionally, knowing how basic NDAs look will be helpful in cutting down the amount of time a lawyer has to spend explaining things.
That’s vital if you’re not paying a flat fee rate.
Having a close look at an NDA template lets you see what kinds of elements you need to include in yours.
That means you’ll be able to gather the right information before consulting with a legal professional, ensuring you complete the NDA creation process quickly and seamlessly.
NDA review costs
Once your NDA is complete, you’ll want to go back over it to double and triple-check for any flaws or missing information.
It’s best to get legal advice for this process, which may be included in your overall NDA fees depending on your lawyer.
What is a non-disclosure agreement, precisely?
Put simply, non-disclosure agreements (or NDAs for short) are legally binding contracts that protect proprietary information.
Breaking them can lead to consequences including monetary damages and the termination of agreements.
A similar — but not synonymous — type of contract is a confidentiality agreement.
Confidentiality agreement vs. NDAis a fine line.
The key point to bear in mind is that confidentiality agreements are usually signed by unequal parties, while NDAs may be signed by any two (or more) roughly equal parties.
Confidentiality agreements are often required when new employees join a company that deals in sensitive subjects or information, for example, and often contain clauses like non-compete agreements.
They tend to be drawn up in-house.
In the case of more equal parties, NDAs will usually be used.
For example, during a merger, members of both companies may have to become privy to private information that they cannot share publicly.
An NDA would be most suitable here.
Keep your secrets safe with a well-crafted NDA
From trade secrets to customers’ sensitive information, excellent NDAs help you protect anything you want to keep under wraps.
They’re also fantastic for protecting you from the risk of copyright infringement, as well as for closely controlling the distribution of your intellectual property.