“It makes good business sense to consistently use engagement letters…” advises Debra Elsbury, office manager of the Indianapolis law firm of Threlkeld & Associates. Debra shares guidance about the content and reasoning behind those engagement letters in ICLEF’s “Managing a Law Firm” CLE. She has generously agreed to me passing along a portion of her presentation her on Law Tips.
The Indiana Rules of Professional Responsibility require an engagement letter, signed by both the client and the representing attorney, for contingent fee cases and also in cases where fees are to be shared between lawyers from more than one firm. While these are the only times an engagement letter is required by professional standards, it makes good business sense to consistently use engagement letters.
Engagement letters are a helpful tool when dealing with clients who may be unfamiliar with the legal process, may not have prior experience with legal representation, or may be new to the procedures employed by your firm. A properly worded engagement letter will familiarize the prospective client with their obligations during the engagement to avoid delays, provide an expectation of fees to avoid surprises at billing time, and should establish the prospective client’s willingness and ability to pay for legal services before they begin.
A signed engagement letter is invaluable in the event of a fee dispute or should collection efforts become necessary.
Engagement letters should cover:
• Scope of the representation
– Is the representation for a limited scope project (divorce, real estate ownership transfer, estate plan, etc.) or more general in nature (for example, general counsel representation for a business)?
• Lawyer’s obligation to the client
– No conflict of interest
– Confidentiality of information and documents
– Frequency of status updates
– Rights to terminate the engagement
• Client’s obligation to the lawyer
– Cooperation in providing documents and information in a timely manner
– Rights to terminate the representation
– Requirement to retain copies of documents
• Fee structure and payment expectations
– Hourly rates or flat fee
– Retainer requirements
– Billing frequency
– Billing for costs such as copies, long distance charges, postage, online research, and document filing fees
– Payment expectations
Other considerations for inclusion:
• Document retention schedules and responsibilities
– Especially important in relation to responsibilities for retention of original documents
• Methods of communication
Thanks again to Debra Elsbury for participating in Law Tips. I hope you found these pointers helpful. If you wish to take advantage of her educational session and those of a panel of other law practice management experts, check out the Video Replay or Online/On demand Video of “Managing a Law Firm”.
About our Law Tips faculty member:
Debra Elsbury has been the office manager of the Indianapolis law firm of Threlkeld & Associates for 13 years. Her responsibilities involve overseeing all of the daily operations of the office from administrative personnel to office technology. Ms. Elsbury is a member of the Association of Legal Administrators (ALA), serving as Immediate Past President for the Indiana Chapter and the ALA Region 3 Business Partner Relations Officer.
About our Law Tips blogger:
Nancy Hurley, Law Tips blogger, has long-standing connections with Indiana lawyers. She was formerly a member of the ISBA and IBF staffs for over 30 years. Nancy’s latest lifestyle venture is with ICLEF. We are utilizing her exceptional writing and interviewing skills while exploring how her Indiana-lawyer background fits with ICLEF’s needs. When she isn’t ferreting out new topics for Law Tips, her work can be found in our Speaker Spotlight blogs, postings on the ICLEF Facebook page, Twittering and other places her legal experience lends itself.
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ICLEF • Indiana Continuing Legal Education Forum, Indianapolis, IN