My Engagement Letter

July 16, 2015
Read this in 18 minutes

Attorney engagement letters can span the spectrum of complexity. Jurisdictional rules of professional conduct speak to them, often within the subject of fees. For example, in Massachusetts a fee agreement is required except under certain circumstances. An effective letter could run fewer than 100 words if the project’s scope is confined to something routine with a definite beginning and end. But of course, letters can cover much more ground, and probably should in most cases.

My standard engagement letter runs approximately 1800 words over four pages. Most clients are engaging me because there exists a relationship of trust, so there’s not often much discussion about the engagement letter. It does what it needs to do and to date it’s never been relevant beyond the formality of it.

Click to View the Pages of My Standard Engagement

But clients really should understand the letter. It’s a contract for services. It lays out the parameters of representation – and that means much more than the cost of it. (Note that regulation of the practice of law presents factors external to the engagement that will interact with the representation, too.) If it’s well written, the letter should hold quite a bit of important information about what the lawyer will and won’t be doing.

As a service to my clients, and to attorneys who may be looking for new or added approaches, I’m going to walk through my standard engagement letter – paragraph by paragraph. Customization on a client-by-client basis is inevitable, and the document is always evolving, but this is a relatively well-rounded example.

Please note that this is not your engagement letter, even if you are a client or prospective client. Individual engagements are sui generis, and this piece having been written in 2015 does and will not reflect subsequent changes to my standard letter.

[0] You, as a member of and on behalf of Client LLC (CL), agree to retain me, Justin DuClos, of 470 Atlantic Avenue 4th Floor, Boston MA 02210, to perform the legal services described in Paragraph 2 below.

This initial paragraph makes clear who the parties to the engagement are.

[1] CL agrees to pay to J DuClos LLC the fees listed in Paragraph 3 below as compensation.

This is the client’s agreement to compensate my practice for my work. This is not personal compensation. It is paid to the firm. I break out the actual terms of payment in a separate paragraph so they can be changed efficiently on a case-by-case basis.

[2] The services to be performed by me for CL are solely:

– Scope 1
– Scope 2
– Scope 3

This is quite obviously where the scope of representation is articulated. It’s the most important section of detail particular to the matter being addressed. There are various reasons and strategies for being more or less specific. An open-ended form of representation may be necessary for an expansive bout of litigation, for example. But a tight description of what’s to be expected may be better for work on a discrete element of a project that’s got a neat beginning and end.

[3] The compensation to be paid to me by CL shall be the following:

– 0000 USD retainer due upon signing
– An hourly rate of 000 USD per, to be drawn from the retainer listed above

This is the aforementioned compensation detail. Compensation arrangements can take any of many forms, from simple to exceedingly complex – for example, tiers of contingency fees, or hourly rates with caps, or a flat figure, or combinatory approaches.

[4] All out-of-pocket fees, costs and expenses shall be paid by CL, as invoiced, without markup. Payments on invoices are due upon receipt. Outstanding invoice balances accrue 1% interest on a monthly and capitalized basis.

Beyond attorney/firm compensation, it’s essential to be clear about who pays for what ancillary expenses. The client will often assume these are items of firm overhead, and they may well be for small costs. But certain types of matters will incur extensive costs that are more appropriately paid by the client. I do not mark up these kinds of costs with any administrative surcharge. Furthermore, it’s important to be clear about when balances are expected to be reconciled, and what the carrying cost will be if they’re not. The opportunity costs associated with the provision of professional services require that interest be applied on outstanding balances.

[5] If this attorney-client relationship and my representation are terminated before the conclusion of the matter for any reason, either by me or by CL, I may seek payment for the work done and expenses advanced or incurred before the termination, less any retainer or deposit paid herewith. Such payment shall not exceed the fair value of the legal services rendered by me. This paragraph does not give me any rights to payment beyond those conferred by existing law.

This makes clear that payment for services rendered is due in the event representation is concluded for any reason prior to the completing the originally anticipated scope. It’s really a fairness clause that, as expressed, does what common law would do. It just sets the expectation and understanding that attorney work is an ongoing affair – not instantaneous – with periodic inputs of time and resources expended.

[6] CL acknowledges that I may engage or consult with experts and/or other attorneys or professionals about this matter. CL acknowledges that no other attorneys or firms located at 470 Atlantic Avenue, Boston MA 02210, are affiliated with J DuClos LLC and thus any such attorneys or firms have no responsibility for this matter or representing CL.

What this does is inform the client that other professionals may be brought into the matter. If there is an expense associated with the services of another professional it will be drawn either from the up front budget set by the engagement and deposited in retainer, or it will be separately approved and paid by the client (unless there is an independent understanding on a contingency matter). The second sentence here makes clear that any other attorneys or firms that share the street address of my office building downtown are not affiliated. Given the many configurations of attorney offices and business relationships, this is a prudent way to avoid any potential confusion – it’s also something jurisdictional rules of professional conduct may speak to.

[7] CL agrees that my representation in this matter does not give rise to an attorney-client relationship between me or J DuClos LLC and any organizations or individuals with whom CL is affiliated. Representation is of CL only, and all conflicts of interest among and between associated persons are hereby affirmatively acknowledged and waived.

This does a couple things. It’s easiest to see what it does in the case of corporate clients. For entity representation it delimits the relationship, confining it to the single corporate entity alone and boxing out employees, directors, members, agents, etc. It also acts as a waiver of any conflicts among persons or entities that may be affiliated or associated with the corporate entity, the existence of which will largely depend on the type of work being done on behalf of the corporate entity. There are circumstances in which this paragraph may be modified to suit individual representation, with the same general purpose and effect.

[8] If any dispute between us arises under this agreement, CL agrees to meet and confer within ten (10) days of written notice by either of us that a dispute exists. The purpose of this meeting and conference will be to negotiate a solution short of further dispute resolution proceedings. If the dispute is not resolved through negotiation, we shall attempt, within ten (10) days of failed negotiations, to agree on a neutral mediator whose role will be to facilitate a resolution within ten (10) days after selection. If mediation fails to produce a full resolution of the dispute satisfactory to both of us, we agree to submit to binding arbitration with and under the rules and processes of the Massachusetts Bar Association Fee Arbitration Board. The arbitration process must be initiated within fourteen (14) days of the failure of mediation. The costs and attorney’s fees for any of these dispute resolution procedures shall be carried by each party individually and respectively.

A dispute resolution provision can be so valuable to both parties and should never be overlooked. You can set this up to suit – whatever would work best for the parties. I’ve never had to use this, but if I did I’d appreciate very much this stepwise approach, both for its utility with issue refinement, as well as for its practicality with time and expense.

[9] Unless previously terminated, my representation of CL will terminate upon the conclusion of this matter. I will endeavor to provide written notice to CL that the engagement has concluded and deliver a final statement for services rendered in connection with this matter. Following such termination, all documents retained by me may be transferred to those responsible for administering records retention. I reserve the right to destroy or otherwise dispose of any such documents, whether electronic or physical, or any other materials, after the mandatory retention period has expired.

This concerns file closure and records retention. Closure is an essential element of practice risk management. It’s also a comforting courtesy to clients to say when you can that, “It’s over, we did it, everything’s as it should be.” I send a final letter and invoice with a clear statement of conclusion. Attorneys are so much in the business of documentation that there are inevitably records to manage. This paragraph explains that my practice is not likely to retain records permanently unless there’s a separate understanding for a prolonged retention service. In my final letter, clients are offered or are given the files for safekeeping, and they are advised to this effect. Original files provided by the client are client property and they are returned to the client at the conclusion of representation.

[10] CL is engaging me to provide legal services in connection with a specific matter. After conclusion of the engagement, there may be changes in applicable laws or regulations, or new legislation or court decisions, or new factual circumstances that could have an impact on future rights and liabilities and the matter for which I am being engaged hereunder. CL acknowledges and agrees that I am not engaged to monitor or advise of new legislation or court decisions, or changes in laws or regulations or any other governing law or factual circumstance that occur after conclusion of this particular engagement.

Law is a never ending web of ever-evolving rules, regulations, decisions, opinions, statutes, etc. It’s ongoing, which is very much why we call it the practice of law. You can only practice at something ever-changing, not master it. This provision tells the client as much, and at the same time informs the client that the project exists in space-time and is not infinite in any respect. Things change, for law as much as for anything, and if clients want ongoing representation that request needs to be specifically arranged so the attorney knows to be researching in and reporting from the relevant disciplines on a regular basis.

[11] CL acknowledges that I and J DuClos LLC represent many other organizations and individuals. CL agrees that I and J DuClos LLC may continue to represent or may undertake in the future to represent existing or new clients in any matter that is not substantially related to our work for CL, even if the interests of such clients in those other matters may be directly or indirectly adverse to CL, and even if the business of such clients is directly or indirectly adverse to CL. I and J DuClos LLC agree, however, that the prospective consent from CL to conflicting representation contained in the preceding sentence shall not apply in any instance where, as a result of our representation of CL, we have obtained proprietary or other confidential information of a non-public nature, that, if known to such other client, could be used in any other matter by such client to CL’s material disadvantage. CL further acknowledges without objection my employment by the Commonwealth of Massachusetts in auxiliary capacities.

This is a preemptive conflict waiver. Helpful discussions on the subject are available here, here and here. Also see Comment 22 to Rule 1.07 of the Massachusetts Rules of Professional Conduct.

When you are working with clients in a particular industry, and then in a particular jurisdiction, you could end up in a position of technical conflict, e.g. two clients that are competing for the same customer base, or two clients that become adverse to each other in matters unrelated to your representation of both. This addresses those kinds of technical conflicts. It specifically does not ask the client to preemptively waive conflicts that involve proprietary and confidential information, i.e. conflicts that – in and of themselves – present new challenges for the client that otherwise wouldn’t exist but for the duality of representation. Waiver of those types of conflicts requires separate and more explicit handling, if they can be waived at all. Also note that I am employed by the Commonwealth of Massachusetts in some capacities, and the ethical dictates governing public employees make it prudent to advise clients of that fact so there is less chance an accidental conflict will arise.

[12] CL agrees to cooperate with me and J DuClos LLC by complying with all reasonable requests for information in connection with the matter for which I am being engaged hereunder. CL agrees to keep me advised of concerns and any information that is pertinent to this matter. CL also agrees to provide me with copies of all documents and information, including correspondence to and from CL and individual members, shareholders, directors, executives, employees, agents, or the like of any relevant individuals or organizations that may have a bearing on the matter. CL further agrees to hold and keep all documents in an original state if related to the matter, and to permit my review upon request. CL acknowledges that legal counsel is specifically provided only orally or in writing on firm letterhead. CL acknowledges that email and text messaging and other forms of instant, transient or social messaging are tools to facilitate our relationship and are not intended for legal counsel, nor is any legal counsel providable by such means.

Law practice on behalf of a client can often be only as good as the client’s involvement. This lets the client know that success includes a role for the client. Much of that role concerns preservation and communication of information. This provision also addresses communication of information from me to the client, i.e. that certain modes, such as texting, are not intended for legal counsel but rather for mere facilitation. Legal counsel is offered only orally or on firm letterhead. As communication applications continue developing, each with their own tools, functions, purpose, and limitations, it’s important to be clear about how and from where true legal counsel is delivered – for both the attorney as a matter of practice risk management and the client as a matter of reliance.

[13] Unless specifically denied in writing, CL agrees to permit me and J DuClos LLC to summarize work completed on behalf of CL for inclusion in a publicly displayable portfolio, which may include, but is not limited to, disclosure of the nature of the work, the general range of value at play, the parties involved, the issues and topics addressed, the approach taken, and the extensible relevance or importance of the work.

It is practical to receive advance permission to display notes on completed work in a publicly available portfolio (the perils of discussing ongoing work are well known). Even the most sophisticated potential client may have difficulty conceiving the nature of an attorney’s work, particularly if a practice is low-volume/high-quality. These historical summaries may communicate more to potential clients about who you are and what you do than almost any other piece of material provided in the course of engagement. However, clients are given the specific option to abstain from participation in a portfolio, and expression of that desire is requested in writing to avoid any risk of confusion. Note that this permission is specifically circumscribed so as not to implicate Massachusetts Rules of Professional Conduct 1.8(d) and Comment 3.

[14] CL hereby grants to me the agency and authority to settle, adjust, compromise, collect, receive, request, demand, sue for, recover, and hold all such sums of money, debts, dues, commercial papers, checks, drafts, funds, accounts, deposits, notes, credits, interests, insurance, and other contractual benefits and proceeds, whether liquidated or unliquidated, now or hereafter owned by, or due, owing, payable or belonging to CL, or in which CL has or hereafter acquires an interest, and to have, use, and take all lawful means and equitable and legal remedies and proceedings in the name of CL for the collection and recovery thereof, and to execute and deliver for CL, or on behalf of CL, and in the name of CL, all endorsements, releases, agreements, receipts or other sufficient records or discharges as may be necessary and proper in the exercise of my duties hereunder and the agency and authority herein granted. CL further hereby grants to me the agency and authority to make, receive, endorse, deposit, and withdraw checks, drafts and funds as may be necessary and proper in the exercise of my duties hereunder and the agency and authority herein granted, including the maintenance of bank accounts for CL in that name or in the name of J DuClos LLC, and to make deposits or withdrawals of money belonging to CL in such accounts, and to disburse any money from such accounts on my signature. CL further hereby grants to me the agency and authority to make, execute and submit any and all government, arbitral or other agency filings on your behalf, consistent with the purposes of representation hereunder.

This is a financial power of attorney. Arguably it’s duplicative of much of the attorney’s role by nature. But it’s a convenience to spell out every which way that I can receive and manage funds on a client’s behalf, including authority to compromise and resolve claims. Lawyers are as much in the business of financial management as they are in the business of documentation. An appreciable portion of clients require some degree of financial service from me. Sometimes though, it’s not foreseeable at the outset of representation – so it is efficient to provide for such authority in all engagements, even if ultimately it won’t be used. The breadth of this grant can be off-putting, but the duties of agency follow this authority, and they are subordinate still to the fiduciary duties already binding attorneys to their clients at the highest level. Clients are protected from attorney self-dealing by all manner of regulation – from character assessments before admission to the bar, to detailed IOLTA scrutiny. A byproduct of this provision is that it acts as a litmus test for the degree of trust on which the attorney-client relationship is founded. If a client has reservations about a provision like this they shouldn’t hire the attorney at all. As an ancillary matter, this provision also grants authority to make government filings on behalf of the client. Again, it happens so often that it’s just efficient to include/clarify that grant of authority at the outset.

[15] Our agreement for this engagement shall be governed in all respects by the laws of the Commonwealth of Massachusetts, USA.

[16] If one or more of the provisions contained in this engagement are found to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected. Such provisions shall be revised only to the extent necessary to make them valid, legal or enforceable.

[17] No action of any party hereto, other than express written waiver, may be construed as a waiver of any provision of this agreement for engagement. A delay on the part of either party in the exercise of its rights or remedies will not operate as a waiver of such rights or remedies, and a single or partial exercise by either party of any such rights or remedies will not preclude other or further exercise of that right or remedy. A waiver of any one provision or right under this agreement for engagement shall not be construed as a bar to or waiver of any other.

[18] This agreement for engagement is complete and integrated. There are no understandings, agreements or representations not specified here. No terms or conditions may be added or deleted unless agreed to in writing by all parties hereto.

[19] This agreement for engagement shall be binding on its signatories and their successors and assigns, provided that nothing contained herein shall be modified, impaired or relieved by succession or assignment. Transfer or assignment by CL is prohibited, excepting transfer or assignment to an affiliate. For the purposes of transfer or assignment, an affiliate includes a parent, sister or merged entity, or transfer or assignment attendant to a sale of substantially all assets to another entity.

This string of paragraphs can be taken together because they are miscellaneous and rather non-substantive. They round out the letter. Most good contracts of any kind will include this series – governing law (personal jurisdiction is likely to be present due to the jurisdictional nature of legal practice, but one could certainly double that up with a concession to personal jurisdiction for cross-border transactions), severability of provisions, a variety of non-waivers, an integration clause to cordon off the agreement from surrounding conversations, and a bit on transfer and assignment to keep the relationship known and as conceived.

There are as many ways to write up an engagement as there are combinations of attorneys and clients. There are templates out there to draw from – some of which are endorsed by regulating authorities. The overall aims of my particular model of engagement are to establish predicability, eliminate risk, prime the client’s expectations, implement efficiencies, pin down the project scope and a governing set of common understandings, and generally set up the basis of a successful working relationship.

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