1. Ethical Challenges of Engagement Agreements and Fees
Melissa Chavin, London, England
Robert E. Juceam, New York City, NY
Ruby Powers, Houston, TX
Helen Sklar, Los Angeles, California

2. Introduction: Overview of Engagement Letters
Purpose: minimize disputes by managing expectations
Consider when drafting: state rules of professional conduct, contract law
Sometimes not required, examples from New York and Illinois
Includes scope of representation, fees and their basis, billing practices, etc.
Letter should be updated throughout the engagement

3. Warnings
Ambiguities will be construed against the lawyer in a dispute (adhesion contract)
Not the time to advertise one’s services as “the best” by promising “the best services”
The agreement can be modified orally; consents of client can be withdrawn without language to the contrary that it can be modified only in writing

4. Description of the Scope of Services to Be Rendered: Goldie Locks Issue
Not too broad: don’t go beyond client and lawyer expectations of scope
Not too narrow: A too narrow scope will be viewed as unreasonable without the client’s informed consent. See e.g., ABA Model Rule (“MR”) 1.2(c).

5. Engagement Letters Also Cover
Client identification and third party payor (non-client) identification
Informed consent to conflicts/ related waivers
Right of client to select arbitration for disputes (when mandated by jurisdiction)
Confidentiality compromised in multi-party representation
Termination of Services

6. Engagement Letters Also Cover (cont’d.)
Certification of truth from clients; promise of client to be cooperative
Process of consideration and signing of the engagement letter
No Guarantee Clause – re case success
Data Protection

7. Special Issues: a Client the Lawyer Never Meets
Lawyer should consider obtaining client’s written confirmation that:
Referring lawyer or agent is duly authorized to instruct lawyer in matters affecting scope of engagement
Communications to referring lawyer conclusively deemed communications to the ultimate client

8. Core Provisions of Strong Engagement Agreement
Use rules of professional conduct of the state you’re practicing in guide to writing
The ABA Model Rules of Professional
Examine closely the “Client Lawyer Relationship” section

9. Scope of Representation
Not a detailed scope of representation, but a brief summary of the undertaking in writing
Satisfy MR 1.4(b):
explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation
Scope of representation may be limited, if the limitation is reasonable and the client gives informed consent, see MR 1.2(c)

10. “Not Included” List
Avoids future disputes about what the estimate or flat fee covered
Opportunity to market future services
Could list related services that the lawyer may not be qualified to provide, for example because their practice is limited to federal law while they are out of state lawyers for the locality

11. Informed Consent to Dual Representation
Communicate the risks of dual representation to get informed consent
Give actual examples of conflicts that could arise in a given matter, and
Actual potential outcomes

12. Waiver of Future Conflicts/ Controversial
MR Rule 1.7(b): dual representation permitted when both clients’ interests are matched
If a new conflict arises, a lawyer can continue to represent both clients if:
The lawyer reasonably believes she can continue dual representation
Representation doesn’t involve assertion of claim by one client against the other
Each affected client gives renewed informed consent in writing

13. Effectively Setting & Communicating Fees
Survey data shows dissatisfaction with lawyers’ communication
What does poor communication look like?
Why should lawyers worry about poor communication?

14. The Duty To Communicate
Where does the duty to communicate come from?
What information is a lawyer required to communicate, and what is she not required to communicate?
The California Rule vs. the Model Rule
What information should we communicate?
How should we communicate?

15. Communication Regarding Legal Fees
Understand the legal problem before quoting fee
When research/investigation is required, structure the engagement accordingly
Well-crafted intake sheet decreases risk of an oversight

16. Fee Schedule Effective use of a fee schedule
Departures from the fee schedule
Responding to requests for discounts
Demonstrate respect
Respond with clarity
Avoid misunderstanding and misinterpretation

17. Intake Sheets, Thorough Interviews, Flat Fee Agreements
Effective use of an intake sheet
The perilous world of flat fees
The perilous world of hourly fees
When may a flat fee agreement be modified?
Peripheral Duties
Affirmative obligations to advise client of issues with nexus to engagement
Lawyer must alert client to reasonably apparent legal problems

18. Reviewing the Fee Agreement
Why it is important to communicate with the client regarding the fee agreement before the work begins
Which provisions are most important to discuss?

19. Explaining Exclusions
Client signing initials in box ≠ evidence of effective communication
Example: What explanation should accompany the exclusion of an appeal?
An appeal will require the payment of a separate legal fee
Filing of the notice of appeal is subject to a deadline
Exclusions are as important as inclusions (maybe more)

20. When and How to Disengage a Client
Start with a strong, clear engagement letter informing client of services
Take proper measures at the time of hire
Include a provision allowing attorney or client to end representation if expectations not met

21. Disengaging a Client (cont’d.)
Example: Jane Doe has the right to terminate this engagement at any time. Conversely, the law firm of Attorney XYZ reserves the right to withdraw from the engagement, subject to any ethics rules.

22. Ending the Attorney-Client Relationship
Disengagement letter recommended
Continuation of legal services for matters not covered in engagement letter
Model Rules of Professional Conduct Rule 1.16(d)
Disengagement letter especially helpful for immigration attorneys

23. Elements of a Disengagement Letter
Identify the subject matter of the letter
Notify the client of the case status and potential deadlines
State the status of fees collected and pending
Advise clients to maintain copies of documents

24. Conclusion
Engagement agreements should outline scope of attorney’s representation
Description of services helps manage client expectations
Exclusions (services not offered) should be listed
Clear communication in engagement letter and fee discussion is pivotal to healthy attorney-client relationship

25. Questions & Answers