Can legal services be paid as a percentage of sales?

Business is often faced with the question: is it possible to pay for legal services not by a fixed amount, but by a percentage of the sale of goods? Such a scheme looks attractive, because it allows you to avoid large costs at the start. However, it has both advantages and legal limitations.

Is it legal?

The general principle of contractual freedom (Article 627 of the Civil Code of Ukraine) allows the parties to independently determine the terms of cooperation, including the form of payment. Payment as a percentage of turnover may be provided if it does not conflict with the law or the nature of the services.

Options for signing such an agreement:

• Consulting contract - it is possible to include a "success fee" if the lawyer's services really contribute to an increase in sales. However, such a fee should be clearly defined in the contract to avoid contradictions.

• Agency contract (Article 297 of the Civil Code of Ukraine) is suitable if the lawyer not only advises, but also helps in attracting clients, but the business entity must have the appropriate KVED.

• Mixed payment model - when part of the fee is fixed, and part depends on the financial result.

Possible risks

1. Tax consequences . Interest payment may raise questions from the tax authorities regarding its qualifications (hidden distribution of profits, labor relations, etc.). The Tax Code of Ukraine requires the correct registration of such payments.

2. Professional restrictions . Rules for success fees have been established for lawyers (Article 30 of the Law of Ukraine "On Advocacy and Advocacy"). For example, it cannot be the only source of payment.

3. Risk of non-payment . If the business suffers a loss, the lawyer may be left without compensation.

Therefore, the payment of legal services as a percentage of the sale of goods is possible, but requires the correct legal registration. Businesses should carefully draft the terms of the contract to avoid disputes and tax risks.

📌 Useful links:

Agency agreement (eng version)

Agency contract (Ukrainian version)

Agency agreement (Ukrainian-English version)

Agreement on provision of legal services

Invoice

Agreement on the provision of services (any) (Ukrainian-English), universal

Agency Agreement (Агентское соглашенье) intro to partners or lender, business sale non-exclusive (Russian - English/rus-eng)

🔹 If you need help in drafting legal documents, contact Instaco experts!