In this episode, Partner Tom Maasland and Senior Solicitor Abbey James from our Technology team unpack Transitional Services Agreements (TSAs), a critical yet often overlooked component of business transitions, offering both legal and practical insights to help navigate them with confidence.
[00:50] Tom and Abbey discuss the fundamentals of TSAs, explaining what they are, the services they typically cover, and how they help buyers “keep the lights on” and maintain business continuity during the transition to full operational independence after a purchase.
[02:08] Abbey and Tom explore what should be included (and excluded) in a TSA, noting that these decisions largely depend on the complexity of the business being sold and the extent to which its IT systems are intertwined
[04:14] They canvas the key features of TSAs and highlight some common legal pitfalls. Tom emphasises that TSAs are not profit-making arrangements, so fees are typically structured as fixed or cost-plus. Abbey adds that buyers should also manage expectations around service delivery, noting that TSAs are designed to ensure continuity, rather than service excellence.
[07:12] They discuss termination, liability, and governance emphasising the need for clear exit plans, fair liability caps, and thought-out governance structures. Tom notes that defining IP ownership and licensing during the TSA is critical to avoid disputes, especially when shared technology is involved.
[09:08] Tom considers the tech entanglement risks, explaining how today’s cloud based, and subscription-based software models impose significant licensing restrictions that can delay transitions and inflate costs. He notes that reviewing licence terms and divestment rights early is essential to avoid costly surprises.
[10:26] They round out the episode sharing their top tips for building a successful TSA, starting with engaging early, well before the sale and purchase agreement is signed. They highlight the importance of clearly defining the scope, identifying third-party and staffing risks, managing data safely through technical (not just contractual) measures, and planning ahead for stranded assets.
Information in this episode is accurate as at the date of recording, 24 October 2025.
Please contact Tom Maasland or our Technology team if you need legal advice and guidance on any of the topics discussed in the episode.
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