Engagement Letter
Definition
An engagement letter is a formal written agreement between an attorney and a client that defines the scope of legal representation, fee arrangements, billing practices, and the responsibilities of both parties.
What Is an Engagement Letter?
An engagement letter (also called a retainer agreement or representation agreement) is the foundational document that establishes the attorney-client relationship. It serves as both a contract and a risk management tool, clearly defining what the attorney will and will not do, how fees will be calculated, and under what circumstances the engagement may be terminated. Most state bar associations require or strongly recommend written engagement letters for all new matters.
Key Components
#### Scope of Representation
The engagement letter must clearly define the specific legal matter being handled. Vague scope descriptions are one of the leading causes of malpractice claims and fee disputes. For example, "representation in the Smith v. Jones breach of contract litigation in Superior Court" is far better than "business litigation services."
#### Fee Arrangement
The letter specifies whether the attorney charges hourly rates, flat fees, contingency fees, or a hybrid arrangement. It should include all applicable rates, billing increments, and any retainer requirements.
#### Billing and Payment Terms
This section addresses when invoices will be sent, payment deadlines, interest on overdue balances, and the attorney's right to withdraw for nonpayment.
#### Client Responsibilities
The letter outlines the client's obligation to cooperate, provide truthful information, respond to communications promptly, and pay invoices on time.
Importance of a Well-Drafted Engagement Letter
A thorough engagement letter protects both the attorney and the client. It reduces the risk of misunderstandings, supports fee collection efforts, and provides critical evidence in any subsequent fee dispute or malpractice claim. AI tools like the Attorney Client Memo Generator can assist with drafting related client communications.