SIDEBAR Spring 2017 - 25

MONTGOMERYBAR.ORG

SIDEBAR FEATURE

Importance of

Engagement Letters

A

ccording to the American Bar Association (ABA)
Standing Committee on Professional Liability, nearly
16% of all malpractice claims filed between 2008 and
2011 arose from poor lawyer-client communication. To avoid
this problem, attorneys should start any relationship with a
client with a comprehensive, written engagement letter.

* Terms of payment. Because misunderstandings over
fees are a frequent cause of nonpayment, grievances, and
malpractice claims, the engagement letter must set forth
the monetary terms of payment, the frequency of payment,
the expenses for which the client will be responsible, and
a realistic outline of the steps involved in the course of the
representation, along with the expected time frame.
The time taken to draft a clear and unambiguous engagement
letter will pay for itself many times over by fostering positive
relationships with clients, increasing the likelihood of prompt
payment, and reducing the possibility of a malpractice claim.
For more information about how an effective engagement letter
can protect your practice, contact USI Affinity today.

Structure of an Engagement Letter
The structure of the basic engagement letter should include
what the attorney needs to know to effectively represent the
client and get paid for the services rendered. Some sections that
are important to include:
* Client identification. The engagement letter should
identify the client whose interests are being represented. In
the case of a business, care should be taken to explain that
the organization is the attorney's client. Engagement letters
in the trust and estates area should clarify the client being
represented so as to avoid the misconception by relatives of
the client that the attorney is the "family" lawyer.
* Scope of engagement. A plainly-worded provision setting
forth the defined scope of the legal services to be performed
is one of the most important risk management tools an
attorney can have to prevent him from being exposed
to potential liability for services outside of the range he
intended to perform. If the ongoing representation expands
beyond the original scope, an amendment to the original
engagement letter can easily be made.

It's where they help builders.

It's where we make decisions.
Deb and Tom Kearse, Owners
Kohl Building Products

Locally focused. A world of possibilities.

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SPRING 2017 25
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Table of Contents for the Digital Edition of SIDEBAR Spring 2017
