Legal support for IT companies

Legal support for an IT company is ongoing or project-based legal assistance for a business in matters relating to agreements, intellectual property, work with the team, personal data, corporate structure, taxation and international relations.

An IT lawyer is needed not only when a dispute has already arisen. A significant part of the work takes place before a problem emerges: reviewing agreements with clients, formalising rights to code, NDAs, gig contracts, rules for handling personal data, corporate arrangements and assessing risks before entering a new market.

The lawyers at Prikhodko & Partners can assist with an individual task or provide ongoing legal support for an IT company.

Who needs legal support for an IT company?

The format and scope of legal support depend on the business model and the company’s current tasks.

Legal support may be relevant for:

• product IT companies;
• outsourcing and outstaffing companies;
• SaaS projects;
• start-ups;
• R&D teams;
• web and mobile development agencies;
• companies working with foreign clients;
• Diia City residents or potential residents;
• IT businesses that are scaling or changing their corporate structure.

The main purpose of legal support is not merely to prepare individual documents, but to build a system in which agreements, rights to the product, relationships with the team and the corporate structure do not contradict one another.

What is included in legal support for an IT company?

Legal support for an IT business may cover several areas at the same time: contract work, intellectual property, corporate matters, work with the team, personal data, tax and international aspects of the business.

Contract work

An IT lawyer prepares and reviews agreements with clients, contractors, developers, partners and other project participants.

Depending on the business model, these may include:

• software development agreements;
• service agreements;
• SLAs;
• NDAs;
• agreements with sole proprietors;
• employment agreements;
• gig contracts;
• licence agreements;
• agreements on the assignment of proprietary intellectual property rights.

Corporate matters

Legal support may include selecting or changing the business structure, preparing corporate agreements, regulating relationships between founders, changes in membership, structuring ownership interests and supporting corporate decisions.

For an IT company, this is particularly important before attracting an investor, the departure of a co-founder, scaling the business or creating an international structure.

Intellectual property

For an IT business, it is necessary to determine who legally owns the product and the results of the team’s work.

A lawyer may review:

• assignment of proprietary rights to software code;
• rights to design, graphics, databases and other results;
• use of third-party libraries and licences;
• trade mark registration;
• product licensing;
• terms governing the use of IP assets by clients and partners.

Specific matters relating to registration and protection of rights may be handled within the intellectual property practice.

Working with the team

The legal model should correspond to the actual format of cooperation with developers and other specialists.

This may include:

• employment relationships;
• cooperation with sole proprietors;
• civil-law agreements;
• gig contracts;
• NDAs;
• IP assignments;
• non-solicitation and other contractual restrictions;
• procedures for terminating cooperation and transferring access rights.

For an individual specialist, it is important to properly formalise an agreement with an IT developer, covering not only payment but also ownership of work results, confidentiality, access to systems and the procedure for ending cooperation.

Tax matters

The tax component of legal support depends on the company structure, the status of participants, jurisdictions and actual transactions.

Legal support may include analysis of:

• the model of working with sole proprietors;
• the payment structure;
• interaction with foreign counterparties;
• changes to the corporate structure;
• tax consequences of individual transactions;
• matters relating to the Diia City regime.

Tax decisions should be assessed together with the actual business model rather than solely from the perspective of formally reducing the tax burden.

Agreements with clients and the team

For an IT company, an agreement should answer at least three basic questions:

what exactly must be done → who is responsible for what → who owns the result.

An agreement with a client should define:

• the subject matter and scope of work;
• stages and acceptance procedure;
• payment;
• deadlines;
• change requests;
• SLA, where applicable;
• limitations of liability;
• the procedure for transferring IP rights;
• confidentiality;
• governing law and dispute resolution procedure.

An agreement with a developer or another team member should additionally regulate functions and work results, access to systems and data, confidentiality, assignment of rights to code and other results, use of third-party components and the procedure for terminating cooperation.

NDA for an IT company

An NDA regulates the use and non-disclosure of confidential information.

It may protect technical documentation, business models, client databases, financial data, internal processes, code and other information to which the team or counterparty gains access.

At the same time, a Non-Disclosure Agreement (NDA) does not replace provisions on the assignment of intellectual property rights: confidentiality and ownership of the work product are separate legal matters.

Protection of intellectual property and data

For a technology business, a significant part of the company’s value may be concentrated in intangible assets.

Therefore, legal support should review the entire chain through which the product is created:

developer → company → client or end user.

If the assignment of rights at one stage is formalised incorrectly, this may create problems when selling the product, attracting investment, undergoing due diligence or resolving a dispute.

Separate protected assets may include:

• software code;
• software;
• design;
• databases;
• trade marks;
• documentation;
• content;
• domain names;
• licensing rights.

Personal data

If an IT product collects or processes user data, it is necessary to determine separately:

• which data is collected;
• for what purpose;
• who is involved in the processing;
• to whom the data is transferred;
• where it is stored;
• which documents are required;
• whether foreign legislation, including the GDPR, applies.

Depending on the product, a Privacy Policy, DPA, cookie documents, agreements with processors and other documents may be required.

At the same time, not every Ukrainian IT company automatically falls within the scope of the GDPR merely because it operates online — the applicability of the requirements must be determined based on the actual business model.

International activities and legal risks

IT companies often enter into agreements with clients and contractors from different countries. In such a situation, simply translating a Ukrainian agreement into English is not sufficient.

An international contract should be reviewed taking into account:

• governing law;
• jurisdiction or arbitration;
• currency and payment procedure;
• tax consequences;
• IP provisions;
• confidentiality;
• liability;
• sanctions and compliance risks;
• processing of personal data;
• the actual country in which the parties operate.

If a company establishes a foreign legal entity or a structure consisting of several companies, the contractual model should correspond to that structure.

Diia City and legal support for an IT company

For some Ukrainian IT companies, the Diia City legal regime is a separate issue.

Legal work may cover:

• initial assessment of compliance with the requirements;
• preparation for obtaining resident status;
• adaptation of agreements;
• gig contracts;
• remuneration and IP matters;
• structuring cooperation with the team;
• analysis of corporate and tax consequences.

A transition to Diia City should be assessed comprehensively: not merely as obtaining a status, but as a change to the company’s contractual, personnel, corporate and tax model.

Which legal risks most commonly arise in IT businesses?

Code is created by a contractor, but the rights have not been properly assigned.
Risk: the company uses the product in practice but does not have properly documented rights to the entire work product.

The client agreement contains unlimited liability.
Risk: the potential amount of claims may significantly exceed the value of the contract itself.

An NDA exists, but confidential information is not defined.
Risk: in the event of a dispute, it may be difficult to establish which specific information was subject to special protection.

The team works under different agreement templates.
Risk: provisions on IP, confidentiality and termination of cooperation may contradict one another.

The Privacy Policy was copied from another service.
Risk: the document does not correspond to the actual processes for collecting and using data.

A foreign contract was signed without reviewing the applicable law.
Risk: in the event of a dispute, the company may find itself subject to a difficult or economically disadvantageous jurisdiction.

Formats for working with an IT lawyer

Subscription-based legal support

Suitable for companies where legal matters arise regularly.

Within the agreed scope, a team of lawyers may review and prepare agreements, advise management, respond to ongoing legal questions, support negotiations, monitor corporate and contractual changes and involve specialist lawyers.

This format can effectively perform the function of an external legal department.

Project-based support

Suitable for a separate complex task, for example:

• launching a new product;
• preparing a package of agreements;
• entering an international market;
• transitioning to Diia City;
• an IP audit;
• business restructuring;
• preparing for an investment transaction.

After such a project is completed, ongoing legal support is not mandatory.

One-off consultation or document

If the company needs to resolve one specific matter, it may order a consultation, legal analysis or preparation of an individual document without switching to subscription-based support.

How legal support for an IT company works

1. Initial consultation

We determine the business model, company structure and current legal tasks.

2. Analysis of current documents and processes

Where necessary, agreements, corporate documents, IP, team-related documents and personal data documentation are reviewed.

3. Setting priorities

The lawyer divides tasks into critical, ongoing and planned matters and agrees the scope of work with the client.

4. Preparing a legal plan

We determine which documents need to be prepared or amended, which risks need to be addressed and which matters require separate analysis.

5. Implementation

Documents are prepared, negotiations are conducted, and corporate and other necessary legal actions are carried out.

6. Ongoing support

Under the subscription-based format, the lawyer remains involved in the company’s ongoing tasks and reviews documents and processes as the business develops.

Cost of legal support for an IT company

The cost of legal assistance depends on the scope, complexity and frequency of the tasks.

The cost may be affected by:

• the number of agreements and documents;
• the complexity of the business model;
• the number of jurisdictions;
• the need to work with IP, GDPR or Diia City matters;
• the number of legal practice areas involved;
• the lawyer’s participation in negotiations;
• the urgency of the work;
• subscription-based, project-based or one-off cooperation.

Before work begins, the lawyers determine the scope of tasks and agree on the legal support format. This makes it possible to avoid paying for unnecessary services and to involve the required specialists exactly at the stages where they are needed.

Conclusion

Legal support for an IT company is needed not only to resolve disputes that have already arisen. Its main value is to structure agreements, rights to the product, relationships with the team and corporate processes in advance so that they correspond to how the business actually operates.

Prikhodko & Partners can assist with an individual legal task or provide ongoing legal support for an IT company. Before work begins, the lawyers analyse the business model and documents, identify key risks and agree on the required scope of legal support.

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