Every lawyer has seen any number of articles or heard any number of lecturers or CLE instructors talk about the importance of using engagement letters. Even so, many lawyers still shy away from using them, or at least don’t take the time and care in creating them that they deserve. This is a mistake.
Some of the most powerful risk control tools and client service tools available to lawyers are engagement letters, non-engagement letters, and closing letters. Well-structured and well-handled, these documents can be the difference between incurring claim-related expenses and avoiding claims all together. They are worth the time it may take to develop them and to appropriately deliver and discuss with your clients or non-clients as the case may be.
Why Lawyers Should Use Engagement Letters
First, engagement letters are required by rule in every jurisdiction at some point for certain types of representation arrangements. In particular, for all contingency agreements. In some jurisdictions, rules require written agreements for other types of representation or payment arrangements, including but not necessarily limited to, flat fee arrangements, representations that are likely to generate more than some threshold in fees (often around $1000), or when more than one firm or attorney is sharing the representation and thus splitting fees.
Second, engagement letters are effective risk control tools because they can put distinct parameters around your professional obligations to clients. The result? The ability to respond quickly and easily to an unfounded claim that you negligently ignored a matter or issue by showing that the matter or issue falls outside the scope of the engagement.
Third, not only are they helpful for controlling professional liability risk, engagement letters are also useful client service tools in general, because they can establish and promote good communication between you and your clients. Clearly-written engagement letters coupled with a thorough discussion of their contents can be used to help clients understand what they should expect of you and what is expected of them. You can include a whole range of clear cut instructions and address all sorts of service concerns in an engagement agreement, including establishing your client’s preferred method of contact, expectations about payment, expectations about how quickly you respond to phone calls or other inquiries, expectations about the client’s obligations regarding cooperation in the representation, and a host of other issues.
Over the next several blog posts, we’ll address several aspects of creating and delivering effective engagement agreements, non-engagement agreements, and closing letters. So keep checking this space!
Posted by Emma Sepke
Emma Sepke is a marketing specialist who leads the digital and content marketing efforts at Protexure Insurance Agency, Inc. Before joining Protexure, Emma graduated from Iowa State University with a Bachelors of Science in Marketing.