4 Essential Points to Include In Your Client Engagement Letter

18
Apr

Too often we hear about attorneys being sued for malpractice that didn’t think they needed a client engagement letter to provide services. They know their client, or they had a verbal agreement.

Unfortunately, there is no guarantee that the same client that shook your hand won’t turn around and file a malpractice claim against you later. An engagement letter is a great way to set expectations and protect yourself in case a malpractice claim is filed later.

The 4 essential points that should be addressed in an engagement letter are:

1. Identity of your client.

The engagement letter should define who your client is. If there are related parties who are not clients, those individuals should be specified as non-clients and they should also receive a copy of the engagement letter.

Consider an engagement on behalf of a corporate client: Do you represent the corporate entity only? The owners? The director and officers? If there are two or more owners, their interests may not align. Are you representing all of the owners or only some of them? Again, the engagement letter should spell out who is a client and who is not.

2. Scope of services

Your client may have several pending legal issues and you should clearly define the specific services you intend to provide. If there is any chance for ambiguity, the letter should go on to state what is outside the scope of the engagement. For example, when citing a specific lawsuit as the subject of the engagement, you may also state that you will not handle the appeal or ancillary litigation.

3. Right of withdrawal

Your client engagement letter should also detail your right to withdraw from representation. You should not rely on the filing of a motion to withdraw with the court in litigated cases as an acceptable way to notify the client of your decision. If you decide to withdraw, a disengagement letter should always be sent to the client.

4. Fee arrangements

All aspects of billing should be communicated to the client, including the basis for the fee and the frequency of billing. The engagement letter should specify if the basis for the fee is flat, hourly, or contingency. Will the billings be monthly? Quarterly? When will the payments be due to the firm? What out-of-pocket charges will be billed to the client? If expert witness fees are to be billed back to the client, you should put this in writing when discussing the hiring of any experts.

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