Letter of Engagement
It is crucial that once you and your client have agreed on the terms of engagement (nature of the problem, expectations, responsibilities, and costs) that the agreement be put in writing. Having a clear letter of engagement, written in plain language will help in avoiding disputes miscommunication between you and your client.
A letter of engagement should contain the following elements:
YOUR CLIENT’S OBJECTIVES
The beginning of a letter of engagement should provide a brief description of the nature of the problem and scope of the services you will be providing your client. The goals your client has set should be identified as well as the anticipated schedule for completion.
STRATEGY, WORK PLAN AND BUDGET
The document should outline the strategy that you and your client agree to follow, as well as the initial work plan. The outline should list each legal task required and each action or step to be taken to complete the tasks. The identity, roles and responsibilities of other lawyers, paralegals and other personnel in your office should also be set out if you are not going to handle all the work personally.
The work plan should be accompanied by an estimate of the total costs. Therefore, the budget specified in the letter of engagement should be broken down by each stage or phase proposed in the work plan. Even though for many projects or problems it is difficult to give precise cost estimates because it is impossible to anticipate every action other parties will take.
ROLES AND RESPONSIBILITIES
It is your role as a lawyer to keep your client informed as to every new development in their case. It is also important that you obtain your client’s instructions or permission before taking any major steps or making important decisions. It would be a good idea to stipulate this in the letter of engagement.
FEES AND DISBURSEMENTS
Whatever has been agreed on regarding fees and disbursements should be set out in the letter. What should be specified is how fees will be calculated and what disbursements your client has agreed to pay. The letter should also state what is required by way of retainer and whether this is refundable if your client decides not to proceed.
BILLING
The letter of engagement should state how often you will bill your client; what information each bill will contain; the time your client agrees to pay the bill; and whether or not interest will be charged on amounts outstanding after that time.
CONFLICT OF INTEREST
It would be useful to mention in the letter that no conflict of interest exists that would hinder you as the lawyer from giving your client full representation. It may also be useful to stipulate in the letter that you will not take any other matter or client that might create a conflict of interest.