When they include the right language, cover the important topics, and are delivered effectively, engagement letters are some of the most effective tools in avoiding malpractice claims and defending against them.
There are several essential points to include that can prove to be most effective later in diffusing confusion and establishing what was truly your professional responsibility and what was not in any particular representation.
One such essential point: Identity of the client
While this may seem like a no-brainer, it is not as simplistic as it seems at first glance. The engagement letter is the most solid place to establish specifically who is your client and, thus, who is not. In other words, it can be used to clarify to whom you owe professional responsibility and loyalty and to whom you do not; an important issue if you face a malpractice claim brought by someone who you did not consider to be a client.
Often, lawyers are approached by more than one party or person at a time about a particular matter. Children bring a parent to the estate lawyer after the other parent has died. Friends looking to complete a business transaction come into a single lawyer’s office for guidance about creating documents. Lawyers advise boards of directors about the implications of various proposed actions to be taken on behalf of a corporation. And, most of the time, the various people and parties have varied—and, at some level, competing—interests. A lawyer can only serve one master in any representation, so it is important to make clear who that master is: for your own understanding and for that of all the other parties involved.
Identifying the client you represent clarifies for you how to choose between various interests throughout a representation: if your client is mom and the will is a bit fuzzy about whether a bequest should be interpreted as going to her, the children, or to an outside charity, your obligation is to advocate for her interests, even if you have had interactions with the children and even if she likes the charity. Likewise, if you are hired to draft up a contract for a transaction among friends, it is necessary for you to clarify for all concerned that you will place your single client’s interests above those of others in any dispute or negotiation point.
So, it is essential to open any engagement letter with language that makes clear both who the specific client is and that, because they are the client, you will advocate for their interests to the exclusion of others’ interests. Even more effective: if there is an opportunity to specifically note who is not your client, you should do so.