💡 Plain English Explanation

Fee structures in professional services are highly sensitive competitive information. Knowing what a competitor charges, how they structure their pricing, and what discounts they offer can fundamentally alter competitive dynamics. This clause protects billing rates, pricing models, and fee arrangements from disclosure.

Professional services firms compete on many dimensions, but pricing is often decisive. If a competitor learns your hourly rates, fixed-fee structures, or success fee arrangements, they can strategically undercut your proposals or use your pricing as a benchmark in their own negotiations. Similarly, clients may use knowledge of your pricing with other clients to negotiate more aggressively.

Fee structure protection typically covers:

⚠ Why This Clause Matters

For the Service Provider: Your pricing strategy reflects market positioning, cost structure, and competitive strategy. Disclosure of your rates to competitors enables them to undercut you precisely. Disclosure to prospective clients gives them unfair negotiating leverage. This clause protects your ability to price services appropriately.

For the Client/Receiving Party: You may be bound not to disclose what you pay your service providers. This has implications for benchmarking studies, regulatory reporting, and discussions with your board or investors. Understanding these restrictions helps you comply and plan accordingly.

Antitrust Considerations: While protecting fee information is legitimate, be cautious about provisions that could facilitate price-fixing or market allocation. Competitors sharing pricing information can raise antitrust concerns, so this clause should be drafted carefully in contexts involving potential competitors.

📄 Clause Versions

Balanced Version: Protects specific fee arrangements while allowing reasonable internal use for budgeting and financial planning. Includes exceptions for legally required disclosures and aggregate reporting. 
"Fee Information" means confidential pricing and financial terms disclosed by either party, including:

(a) hourly billing rates for specific professionals or professional categories;
(b) fixed-fee, flat-fee, or project-based pricing arrangements;
(c) contingency fee structures, success fees, or performance-based compensation;
(d) retainer arrangements and advance payment terms;
(e) volume discounts, loyalty pricing, or relationship-based rate adjustments;
(f) rate increase schedules and pricing policies; and
(g) the total fees charged or paid under any specific engagement.

Each party agrees to maintain the confidentiality of the other party's Fee Information and shall not disclose such information to third parties, including competitors of the Disclosing Party, without prior written consent.

Notwithstanding the foregoing, the Receiving Party may:
(i) disclose Fee Information to its officers, directors, and employees with a need to know for legitimate business purposes;
(ii) include Fee Information in aggregate financial reporting without identifying specific providers or engagements;
(iii) disclose Fee Information as required by law, regulation, or legal process, subject to reasonable notice to the Disclosing Party; and
(iv) use Fee Information internally for budgeting, planning, and vendor management purposes.

Neither party shall use the other party's Fee Information to solicit competitive proposals or to negotiate pricing with the Disclosing Party's competitors.
Disclosing Party Favor: Maximum protection for all pricing information with strict limitations on use and disclosure. Ideal for firms with differentiated pricing strategies they wish to keep strictly confidential. 
"Fee Information" means any and all information relating to the Disclosing Party's fees, pricing, rates, compensation, and financial arrangements, whether disclosed directly or indirectly, including without limitation:

(a) all hourly rates, daily rates, and per-unit pricing for any professional level or service category;
(b) all fixed-fee, flat-fee, capped-fee, or project-based pricing, including the methodology for calculating such fees;
(c) all contingency arrangements, success fees, incentive compensation, and performance-based pricing structures;
(d) all retainer arrangements, advance payment requirements, and payment terms;
(e) all discounts, credits, fee reductions, write-offs, or other pricing concessions, including the circumstances under which such adjustments are offered;
(f) all rate cards, fee schedules, and pricing guidelines, whether standard or customized;
(g) the total fees, estimated fees, or fee ranges for any specific engagement or matter;
(h) fee comparisons, benchmarking data, or competitive pricing analyses; and
(i) the Disclosing Party's pricing strategy, margin targets, and profitability metrics.

The Receiving Party shall treat all Fee Information as strictly confidential and shall:

(i) not disclose any Fee Information to any third party for any purpose;
(ii) not use Fee Information in connection with any competitive procurement, RFP process, or pricing negotiation;
(iii) not share Fee Information with industry surveys, benchmarking organizations, or market research firms;
(iv) restrict internal access to Fee Information to those individuals with an absolute need to know;
(v) not use Fee Information to negotiate pricing with the Disclosing Party or any competitor of the Disclosing Party; and
(vi) immediately notify the Disclosing Party of any request for disclosure of Fee Information.

The existence of any fee arrangement between the parties, including the fact that the Receiving Party is a client of the Disclosing Party, shall itself be considered Fee Information unless expressly agreed otherwise in writing.
Receiving Party Favor: Narrower protection limited to specifically negotiated rates and arrangements. Preserves ability to discuss pricing in general terms and participate in legitimate benchmarking activities. 
"Fee Information" means only those specific fee arrangements expressly designated as confidential, limited to:

(a) specifically negotiated rates that differ materially from the Disclosing Party's published or standard rates;
(b) unique pricing structures developed specifically for the Receiving Party's engagement; and
(c) specific total fees paid under executed engagement agreements, where such fees reflect negotiated discounts or special arrangements.

Fee Information does not include:
(i) the Disclosing Party's standard, published, or rack rates available to the general market;
(ii) general information about the Disclosing Party's pricing model or fee structure types (e.g., that the firm offers hourly, fixed-fee, and contingency arrangements);
(iii) fee ranges or estimates provided during proposal or RFP processes;
(iv) pricing information that the Disclosing Party has disclosed to multiple clients or made generally available;
(v) aggregate spending data that does not reveal specific rates or negotiated terms; or
(vi) information required to be disclosed for regulatory, tax, or audit purposes.

The Receiving Party may:
(i) disclose Fee Information to its professional advisors (accountants, auditors, legal counsel) under their own confidentiality obligations;
(ii) include fee data in anonymous industry surveys or benchmarking studies that do not identify the Disclosing Party;
(iii) discuss fees internally for any legitimate business purpose, including procurement decisions;
(iv) disclose fees as required by applicable law, regulation, or court order; and
(v) reference general pricing levels (e.g., "market rate" or "premium pricing") without disclosing specific amounts.

💬 Key Considerations