The rules of engagement
Here’s what to include in your engagement letter. And what not to. Part 1 of a three-part series on documenting the stages of representation.

By APRIL M. McMURREY and JAMES CARLSON
Summer 2016

Communication breakdowns and fee disputes are some of the most common reasons clients contact the Office of Attorney Regulation Counsel. Whether a complaint is founded or not, it can still take time away from other work and cause you stress. In short, your practice suffers.

One of the best ways to ward off any misunderstandings is to develop a strong engagement letter. Consider this an opportunity: through this document you can educate the client regarding what they can expect of the attorney-client relationship.

Colo. RPC 1.5 may require only that you provide your client, in writing, with "the basis or rate of the fee and expenses," but that is the floor and may not be enough to avoid misunderstandings. While many lawyers already provide a written fee agreement to the client, they are not utilizing the engagement letter, where they can address issues beyond fees. Consider using both of these documents, or combining the two, and providing them to the client at the outset of the representation. This not only fulfills your ethical obligation under Rule 1.5. It protects the attorney.

So what goes in to a good engagement letter? While this is by no means an exhaustive list, here is a good start.

Define the scope.
For example, “You have asked us to do X, Y, and Z.”

Specify any exceptions to the scope.
Clearly state those things that are not included, such as appeals.

Describe how you will communicate with the client.
Explain your policy regarding when you return phone calls, emails, and texts.

Explain the file retention policy.
When drafting this policy, bear in mind ethical obligations regarding client file retention pursuant to Colo. RPC 1.16A.

Point out any other policies helpful to the client.
For example, explain whether other lawyers, paralegals and investigators will be assisting with the case.

If the engagement letter includes a discussion of fees, consider including the following:
List the retainer, if any, and the process for use and replenishment.
Explain the billing arrangement, including how often you bill and how the bill will be provided (mail, email, etc.).
Explain the procedure for returning client money should you or the client terminate the relationship.

Those are some of the issues you may want to address in your engagement letter. What about language you do NOT want to include?

You should not put in the agreement any kind of guarantee of outcome. Even stating that you'll do "good work" or "high quality" work can create a contractual cause of action. Steer clear.

Also, resist the urge to include a discussion of every contingency. This should be a reader-friendly document that is easy for the client to understand and reference. Lengthier is not better.

In general when thinking about your engagement letter, consider the questions a client might have throughout the representation. Then do your best to address those questions up front. Take time to review the engagement letter with the client. Consider having the client initial the provisions as they review, and then provide a copy to the client and retain a copy.

A clear engagement letter will serve to establish the client’s expectations for the representation, and can also be a good document to point the client towards if issues arise during the representation (“Remember, I return calls after 5 p.m., as I’m in court all day. This is addressed in my engagement letter.”). Finally, if the client does file a complaint, a strong engagement letter serves to demonstrate the lawyer’s efforts to clearly communicate with the client, and will likely assist the lawyer reviewing the matter to understand the representation. In short, there’s no downside to a good engagement letter.  

Want to know more? For information on flat fees, read "How to manage flat fees" in this edition of the OARC Update.

April M. McMurrey is the Deputy Regulation Counsel for the Office of Attorney Regulation Counsel’s intake division. James Carlson is the Information Resources Coordinator for the Office of Attorney Regulation Counsel.