Engagement letters confirm the representation’s scope setting forth the parties’ responsibilities, billing rates/contingency agreements and expense costs. Engagement letters discuss the scope and limits of the firm’s representation. The engagement letter memorializes the bounds of the firm’s actual representation. For instance, if the law firm has no intention of pursuing appeals on behalf of its client, then the letter should explicitly state that appeals are not part the firm’s representation, unless a separate retainer is executed.
A written engagement letter should be provided prior to commencing representation, or within a reasonable time thereafter. Very occasionally it may be impracticable if the scope of services to be provided cannot be determined at the time of the commencement of representation then an overview of the provided services as best as possible should be provided.
Engagement Letters should address the following matters:
1. Explanation of the scope of the legal services to be provided
2. Explanation of attorney’s fees to be charged, expenses and billing practices
3. If there is a requirement to arbitrate fee disputes then this should be disclosed
Engagement letters may not be required in the following situations:
1. Where the fee to be charged is expected to be less than a certain dollar amount
2. Where the attorney’s services are of the same general kind as previously rendered to the client
Engagement letters are an essential part of a law firm’s risk management program insuring that the client’s expectations are laid out and met. If there is a disagreement later as to the services provided or fees charged, it can be an essential part in resolving those disputes without malpractice litigation or disciplinary bar complaints. Many local and state bars will provide samples of engagement letters for your jurisdiction.