Lawyers are often hired for an immediate need and want to charge forward. A full conflict check and a full engagement are needed immediately before any work gets done. Busy lawyers do not like that and often argue about the need for an engagement letter, but really appreciate the fact they did when they get sued for a legal malpractice claim years later.
Once conflicts are cleared, the engagement letter is sent to comply generally with the professional rules of the applicable jurisdiction. Most importantly, it identifies who is the client. You the lawyer need to be very clear who you represent — we represent the corporation, not its officers, shareholders, or employees. Thereafter you must often also send an “I am not your lawyer” letter to make it doubly clear with the CEO or other major players. They should be advised to get their own lawyers. The corporate Miranda equivalent comes into play when you are interviewing employees. You do not want one of them suing you later claiming: “I thought she was my lawyer.” Make all this clear and your engagement letter is “Exhibit A” in your defense.
In the first paragraph of the engagement letter, you have identified who you represent. You then need to spell out in a sentence or two what you have been hired to do. Lawyers are permitted to limit the terms of their employment if clearly stated. We have been engaged to do “X” only. We all know that the scope of our work often changes, but you can simply do a short writing then saying you have also engaged us to do “X” and now “Y” has been added. Without this, clients often do revisionist history and assert you were supposed to file the taxes, handle an appeal, do some regulatory filing, or the like when it was never contemplated. Spell it out and protect yourself. It can become your best friend later.
A new client who fusses about either a retainer or a reasonable engagement letter may just be a client you do not deserve. I suggest the development of a standard letter which can be modified to suit all basic situations. This speeds the process and makes the line lawyer’s job easier. It can also address a confirmation of the new client’s consent to an actual conflict. The terms portion of such an engagement can be more generic, and even in the form of an attachment. This also is a great opportunity to advise the client of their own duties; how fees, costs and retainers will be handled; document retention policies; termination dates or procedures; and many other basics that should be clear to the lawyer and the client.
An engagement letter is a take home exam. Every lawyer should get this right at the beginning of the engagement. It is basic and inexpensive protection should a relationship go astray. The lawyers who fuss about doing one likely have not yet been a defendant.
Once conflicts are cleared, the engagement letter is sent to comply generally with the professional rules of the applicable jurisdiction. Most importantly, it identifies who is the client. You the lawyer need to be very clear who you represent — we represent the corporation, not its officers, shareholders, or employees. Thereafter you must often also send an “I am not your lawyer” letter to make it doubly clear with the CEO or other major players. They should be advised to get their own lawyers. The corporate Miranda equivalent comes into play when you are interviewing employees. You do not want one of them suing you later claiming: “I thought she was my lawyer.” Make all this clear and your engagement letter is “Exhibit A” in your defense.
In the first paragraph of the engagement letter, you have identified who you represent. You then need to spell out in a sentence or two what you have been hired to do. Lawyers are permitted to limit the terms of their employment if clearly stated. We have been engaged to do “X” only. We all know that the scope of our work often changes, but you can simply do a short writing then saying you have also engaged us to do “X” and now “Y” has been added. Without this, clients often do revisionist history and assert you were supposed to file the taxes, handle an appeal, do some regulatory filing, or the like when it was never contemplated. Spell it out and protect yourself. It can become your best friend later.
A new client who fusses about either a retainer or a reasonable engagement letter may just be a client you do not deserve. I suggest the development of a standard letter which can be modified to suit all basic situations. This speeds the process and makes the line lawyer’s job easier. It can also address a confirmation of the new client’s consent to an actual conflict. The terms portion of such an engagement can be more generic, and even in the form of an attachment. This also is a great opportunity to advise the client of their own duties; how fees, costs and retainers will be handled; document retention policies; termination dates or procedures; and many other basics that should be clear to the lawyer and the client.
An engagement letter is a take home exam. Every lawyer should get this right at the beginning of the engagement. It is basic and inexpensive protection should a relationship go astray. The lawyers who fuss about doing one likely have not yet been a defendant.
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