The Transitional Service Agreement guide — structuring the stability bridge.

A TSA is a formal consulting arrangement defining what the seller will do, for how long, and under what conditions after the sale closes. It is not a safety net for the seller to control post-sale decisions, an extended employment arrangement, or a vehicle to resist changes the buyer makes. A well-structured TSA is a stability bridge — it keeps client relationships intact, transfers operational knowledge that does not exist in writing, and lends the seller's credibility during the most uncertain weeks of new ownership.

§ 01 · The right duration3–12 months, usually 6–9.

Duration depends on three factors. Book complexity: a 50-client book with straightforward commercial policies may need 3–6 months; a 300-client book with complex multi-line relationships, brokerage arrangements, and personalized service protocols may need 9–12 months. Staff stability: well-documented operations and strong leadership team mean shorter TSA; critical processes living only in the seller's head plus nervous key employees mean longer. Seller's readiness to leave: a 12-month TSA can become an excuse to avoid retirement; a 3-month TSA may rush a handoff that deserves more time.

Most TSAs fall in the 6–9 month range. If the seller cannot articulate why a specific duration is needed, they have chosen wrong.

§ 02 · The three scope bucketsWhat goes in, what doesn't.

Client introductions and relationship handoff. Structured introduction of the buyer or designated successor to the top 20–30% of revenue clients — not a single meeting, but a series of calls, meetings, or visits where the seller presents new leadership, explains service continuity, and answers client questions. For mid-tier clients, the buyer meets them directly with a transition letter from the seller. For lower-touch clients, a recorded message or group email suffices. Be specific in the agreement: "Seller will conduct 25 client introduction meetings over the first 90 days, scheduled at mutually convenient times."

Operational knowledge transfer. Documentation and verbal transfer of the unwritten rules: carrier-relationship nuances (which underwriters prefer which risk types, key contacts, loyalty considerations), client-retention strategies (subtle reasons clients stayed or nearly left), actual versus org-chart operational roles, hidden revenue opportunities not yet pursued. Create a joint knowledge-transfer checklist before the TSA starts. Assign delivery methods: written documentation, recorded walkthroughs, or scheduled sessions with specific team members.

Carrier and partner relationships. Facilitate transition meetings with key carrier representatives, introduce the buyer to agency contacts, acknowledge the transition to partners. Some carriers or wholesalers require seller involvement during a transition period per their appointment terms. This bucket directly protects commission-income continuity.

What is NOT in scope: The seller is not running the agency, making hiring or firing decisions, vetoing buyer strategy, or fixing problems that belong to the new owner. Draw this line explicitly.

§ 03 · Compensation structuresFlat, hourly, or hybrid.

Flat monthly fee: $5,000–$15,000 per month depending on agency size and involvement level. Simplest and most transparent. Hourly rate: $150–$350 per hour for documented hours. Works when workload is genuinely variable and both parties can track hours honestly. Earnout component: a portion of TSA consideration tied to client retention or revenue targets during the TSA period. Incentivizes relationship transfer rather than sabotage — but use cautiously; if the earnout is too large, the seller remains financially invested as an owner. Combination approach: monthly fee for structured work (introductions, documentation) plus hourly billing for ad-hoc consulting.

Principle. TSA compensation should not approach what the seller earned as an owner. If it does, the seller has not actually exited — they have leased themselves as an employee.

§ 04 · Boundary-setting to prevent burnoutThe structure that holds.

For sellers approaching TSA work from a position of burnout or health issues, structure matters more than dollars.

Define hours: "Available Monday–Friday, 9am–5pm for TSA obligations. Outside these hours only for genuine emergencies." Set specific deliverables, not vague availability: "25 client introduction meetings, 12 knowledge-transfer sessions, weekly 30-minute strategy calls" — once these are done, the TSA is complete regardless of calendar. Create a firm end date: not "approximately six months" but a specific date, with a 2-week wind-down window then a hard stop. Define escalation protocols: "If a client contacts me directly during the TSA period, I will refer them to [new owner] and copy them on my response."

§ 05 · When a TSA is NOT appropriateThe honest call.

Some situations call for a Clean Break instead. Severe health issues that prevent genuine contribution. Full burnout where the thought of showing up creates physical distress. Lack of trust in the buyer where the seller will spend the TSA period undermining decisions. Clients who have explicitly stated they will leave if the seller departs — a TSA will not fix this. A fundamental incompatibility between buyer's vision and seller's values where collaboration will be constant conflict.

In these cases a shorter TSA (2–3 months, documentation only) or no TSA at all is more honest and less harmful than a full engagement that fails halfway through.

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