A lawyer letter engagement is an officially recognized document that defines the conditions and terms of a business project between two partners. When onboarding a new client, businesses face a slew of questions, including the scope of the project, deadline, payment schedules, and services provided.
To answer these questions and to navigate potential legal challenges, businesses often work with a lawyer to create an official engagement letter. A lawyer engagement letter is a legally binding document that clearly defines expectations, the scope of work, and the costs.
Having a lawyer engagement letter is crucial for defining project terms, mitigating risks, and protecting the business and client from legal headaches. While engagement letters are less formal than a contract, they still serve as valid evidence for insurance or court cases if problems arise between the two parties.
Understanding the Purpose of a Lawyer Letter of Engagement
When you agree to the terms of a deal with another party, a vocal agreement or handshake will often not hold up in a court of law. Therefore, to ensure both parties have agreed to clear terms for a deal, businesses will create a letter of engagement or a contract.
The purpose of a lawyer's letter of engagement is to formalize an agreement between a business and a client. The client can be an individual or another business. Not only will an engagement letter specify what services the business will provide, but it will also state what the client is responsible for.
Lawyer engagement letters are beneficial to both the client and the business. For the business, it defines a clear objective and limits scope creep, preventing the business from overcommitting resources to a single project. When it comes to the benefits for the client, those that sign a lawyer's letter of engagement have peace of mind knowing the business has agreed to deliver the work according to your budget and service requirements.
Letters of engagement can be formatted for use in numerous professional services, such as consulting, marketing, legal, and accounting. It is strongly advised to work with a lawyer or legal software when creating an engagement letter, as the content, terms, and responsibilities greatly vary by industry.
What to Include in a Lawyer Letter of Engagement
As we mentioned earlier, a lawyer engagement letter can formalize agreements between two parties in various fields. While each engagement letter may contain different wording and information, some key elements should be present in any letter of engagement, including:
- Legal Identification of Signees
- Start and End Dates
- The Responsibilities of Each Party
- Detailed Information Outlining the Scope Of Work
- Billing Schedule
- Payment Amount and Attorney Retainer Fee
- Confidentiality Agreement
- Termination of Contract
- Specific Conditions
To create an effective engagement letter, most of these elements must be clearly defined and agreed upon with the client.
Crafting a Comprehensive Lawyer Letter of Engagement
Now that we know some of the most crucial elements to include in a lawyer letter of engagement, we can start to discuss how to craft a comprehensive engagement letter. For many businesses, it can be helpful to start their process by looking at templates online, such as those from Bonsai.
While we do not suggest that you use the exact template letter, these resources are helpful for getting the process started. If you want some further information regarding lawyer letter of engagement formatting, here is the general structure to follow:
- Section One - Personal Information: The first section of a lawyer’s letter of engagement should outline the personal information for each party (names, emails, location)
- Section Two - Scope of Work: The second section of an engagement letter will outline the specifics of the services required. Businesses should add specific detail to this section to avoid scope creep and unwanted liability.
- Section Three - Payment: When creating an engagement letter, you will also need to outline the payment structure. This includes the total cost, hourly cost, retainer, and any other expected fees.
- Section Four - Specific Conditions: In this area, you want to outline elements related to termination, special requirements, data security, and confidentiality.
- Section Five - Signature Fields: Last but certainly not least is the signature field. At the end of the engagement letter, both parties must sign the document for it to be legally binding.
Below is an example of the formatting of a sample engagement letter.
These are the most simplistic elements of a lawyer’s letter of engagement, and depending on the scope of the project, an engagement letter will typically get much more complex and detailed than this.
Unfortunately, most businesses do not have the knowledge needed to create an engagement letter or adapt online templates to meet the requirements of their specific agreement.
That is why it is crucial to work with a lawyer when formulating a letter of engagement, or rely on pre-built legally vetted solutions. A lawyer will ensure the engagement letter accurately outlines the duties of each party. With the help of a lawyer's letter of engagement, the terms of the project are clearly defined and official.
Key Considerations for a Successful Lawyer-Client Relationship
One of the areas where engagement letters are most common is the legal field. Lawyer engagement letters are crucial for law firms and are the backbone of most lawyer-client relationships. With that said, there is more to fostering a healthy relationship between a lawyer and a client than simply signing a letter of engagement.
When working with a lawyer, there are a few considerations you should be mindful of to ensure you are developing a mutually beneficial relationship, including:
The backbone of any healthy relationship, be it work or personal, is effective communication. Whether you are part of the legal team or you are the client, it is crucial to communicate any current questions or progress updates. The longer each party goes without hearing from the other, the more tension and anxiety build up.
A good attorney-client relationship also requires ongoing transparency. Both clients and lawyers must be forthright with each other about their circumstances and any potential roadblocks to success. Throughout the relationship, each party must cooperate to reach the desired results to minimize the risk of legal issues.
Clearly Defined Expectations
Nothing can sour a relationship faster than unmet expectations, and this is what makes an engagement letter such a crucial aspect of doing business. When entering into a client-lawyer relationship, the client must clearly outline what services they require, and the lawyer must state the services they will provide, including a timeline for the work.
For both parties, beginning a lawyer-client relationship is exciting. The security of each party, however, and the specifics of the engagement letter must be kept a secret. Lawyers are obligated to keep their client's information discreet and private throughout the partnership. Clients must also be aware of their duties to maintain privacy and confidentiality.
Always Be Professional
Finally, just like any other professional relationship, it is helpful to cultivate a respectful and professional relationship between both parties. For clients, this means truthfully providing all relevant information. For lawyers, professionalism means that they must always protect their client's best interests and provide accurate legal advice.
Why is a Letter of Engagement for Attorneys Important?
- When you are working with a new client or anew business, a lawyer engagement letter is in both parties best interest. Engagement letters can be written and legalized much quicker than contracts, making them the ideal choice for clients or businesses looking to start a project as soon as possible.
- The challenge that businesses face on a global level is creating an all-encompassing letter of engagement. Even with all of the information online, it is difficult to fully understand what to include in a legal engagement letter. However, a letter of engagement template can prevent scope creep and ensure that the agreement is time bound, and well-documented to provide maximum protection.
- The letter of engagement helps you protect your profits by ensure you are only agreeing to a limited set of services. It is more comprehensive than a traditional scope of work contract
Thankfully, the process of creating a lawyer letter of engagement can be made simple with the help of Bonsai. Bonsai has leveraged its experience to develop helpful software for businesses. Simply sign-up for a free trial and get unlimited access to their entire collection of engagement letter templates. With the help of Bonsai’s templates and software, you can streamline the process and ensure your lawyer's letter of engagement clearly outlines the details of a project.
Formalizing a new work relationship does not have to be an overly complex legal matter. To simplify the process, use this guide as an overview, download a relevant Bonsai template, and work with a legal professional to finalize the specific details.
Start the process of creating a lawyer engagement letter today by visiting our templates page. With numerous templates in every niche, you can quickly start creating a lawyer letter of engagement to use when formalizing your next deal.