Exhibit 10.2

                                                        
                              EMPLOYMENT AGREEMENT

          This agreement,  entered into this 18th day of May, 1998,  between PSW
     Technologies,  Inc.  and  James T.  Kelsey  (herein  after  referred  to as
     "EMPLOYEE").
          
          1. PSW  Technologies,  Inc. hereby employs EMPLOYEE in the position of
     Senior Vice President of Sales & Marketing.
          
          2. EMPLOYEE shall receive a salary of $150,000.00  per annum,  paid in
     twenty-four  (24) equal  semi-monthly  installments of $6,250.00.  EMPLOYEE
     shall receive the benefits set forth in the  "Benefits  Package" as amended
     from time to time.
          
          3. EMPLOYEE will devote his or her full business time and best efforts
     to PSW Technologies,  Inc. will provide technical services on such projects
     or to such clients as PSW Technologies,  Inc. designates,  and will perform
     such  administrative  duties  related  to his or her  other  duties  as PSW
     Technologies, Inc. may reasonably assign.
         
          4. EMPLOYEE agrees not to disclose to third parties, or to use for his
     or her own benefit,  information,  materials or other  property  (including
     without  limitation,  source code,  object  code,  design  documents,  test
     suites, protocols,  other computer related information,  the customer list,
     billing  rates,  methods  of  doing  business  or  other  materials  marked
     confidential)  belonging  to PSW  Technologies,  Inc. or its  clients.  All
     information  gained as a result of this Agreement is confidential  and such
     information  shall not be  disclosed  to third  parties.  EMPLOYEE  further
     agrees that upon  termination  he or she will  return to PSW  Technologies,
     Inc.  all such  information  and  material in his or her  possession.  This
     paragraph shall survive the expiration or termination of this Agreement.
        
          5.  EMPLOYEE  shall not during the term of this  Agreement,  and for a
     period of one year thereafter, directly or indirectly:
              
          a. Solicit or induce any employee or consultant of PSW Technologies to
     terminate his or her employment.
             
          b. Solicit or induce any customer of PSW Technologies to terminate its
     business relationship with PSW Technologies, Inc. including firms that have
     been  customers  of PSW  Technologies,  Inc.  within the twelve (12) months
     preceding EMPLOYEE'S termination.

          c.  Accept  any  opportunity  (whether  of  a  contract  or  full-time
     employment) with a PSW Technologies,  Inc. client if Employee learned about
     the opportunity in the course of Employee's employment by PSW Technologies,
     Inc. 
 
          6. EMPLOYEE  agrees to disclose to PSW  Technologies,  Inc. in writing
     any and all  documentation,  inventions,  improvements or discoveries which
     arise out of his or her employment with PSW Technologies, Inc.
             
          7. All  copyrightable  work is "work  for hire"  and  EMPLOYEE  hereby
     assigns  to  PSW  Technologies,   Inc.  all  rights  and  interest  in  any
     copyrightable  work,  invention  or idea  made or  conceived  while  in the
     performance  of any job related  duties during the term of this  Agreement.
     EMPLOYEE  will  execute any  documents,  and at PSW  Technologies'  expense
     provide any cooperation  reasonably  necessary to create or record any such
     transfer of ownership.

          8. EMPLOYEE  represents that EMPLOYEE has the right to enter into this
     Agreement  without  infringing  any prior  agreement to which EMPLOYEE is a
     party;  that all deliverable  work provided  hereunder will be original and
     will not  infringe any  copyright,  patent or other  intellectual  property
     right; that the EMPLOYEE is an American citizen or legal permanent resident
     of the United States and, at the same time this  Agreement is signed,  will
     sign  an  I-9  form  and  will  provide  to  PSW  Technologies,   Inc.  the
     documentation required.  EMPLOYEE will obey all PSW Technologies' rules and
     regulations as they may be issued from time to time.
         
          9. It is  understood  that either party may terminate  this  Agreement
     without cause by giving two weeks prior written notice to the other. In its
     sole discretion,  PSW Technologies,  Inc. may terminate  employee,  without
     cause, effective immediately, upon payment of two weeks salary to employee.
     PSW  Technologies,  Inc. may terminate  immediately  upon written notice to
     EMPLOYEE for cause (including without  limitation PSW Technologies'  client
     requesting termination of EMPLOYEE's services).
         
          10. This Agreement will be governed by Texas law.

          11. This  Agreement  may not be assigned by either  party  without the
     prior written consent of the other.
         
          12. This Agreement,  and any written amendments  thereto,  contain all
     terms  and  conditions  agreed  upon by the  parties  hereto,  and no other
     agreements,  oral or otherwise,  shall be deemed to exist or to bind any of
     the  parties   hereto.   All  previous   communications,   representations,
     warranties,  promises,  conditions  or  agreements of any kind shall not be
     binding upon the parties  unless  incorporated  into this  Agreement.  This
     Agreement  may not be amended or  modified,  except by a writing  signed by
     both parties.
____________________

READ AND ACCEPTED BY EMPLOYEE:

\s\ James T. Kelsey
James T. Kelsey

Address of Employee is as follows:

5709 Highland Hills Circle
Austin, TX  78731

PSW TECHNOLOGIES, INC.

\s\ W.Frank King
W. Frank King
President & CEO