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WHEN YOU ENGAGE AN ATTORNEY IT IS REQUIRED THAT YOU ALSO OBTAIN AN ENGAGEMENT LETTER

Posted by David Katz | Jul 20, 2019 | 0 Comments

A. WHEN YOU ENGAGE AN ATTORNEY IT IS REQUIRED THAT AN ENGAGEMENT LETTER FOR SERVICES BE PROVIDED AS PART OF THE ATTORNEY-CLIENT RELATIONSHIP.

Like any engagement in life, an engagement between an attorney and a client is a serious relationship and one that requires a written agreement. To that end, the Massachusetts Rules of Professional Ethics now mandate that all lawyer/client relationships require a written engagement letter. The rule provides that a lawyer must memorialize in writing "within a reasonable time after commencing the representation" the scope of the representation and the basis of the rate, fees, and expenses for which the client will be responsible. Consistent with the mandates of the Board of Bar Overseers (the organizational body that controls attorney conduct in Massachusetts) and our insurance carrier the Katz Law Group has devised an engagement letter that is both comprehensive, fair and understandable. Here is a breakdown of our engagement letter or what the Katz Law Group refers to as a " legal services agreement " as follows:

1.Scope of Service. This is the beginning point for defining what the role will be for a law firm and its client. It may seem obvious to an attorney but a client needs to know exactly what you will be doing and not doing. For example, if you engage the lawyer to perform the preparation of joint wills and a family trust the scope of service should specifically define that process. On the other hand, if counsel is to provide litigation services as it relates to a particular case then the scope of services for that particular matter should be strictly defined. The scope of service section as it appears in the Katz Law Group legal services agreement also lets the client know what the scope of service does not cover so that there are no misunderstandings at the outset of the relationship.

2. Retainers, Fees, Costs, and Expenses. Defining and detailing the nature of all retainers, fees, costs, and expenses are probably as key to the future success of a lawyer/client relationship as anything else. If counsel is to require a retainer, then counsel must set forth the scope of the retainer and the price per hour. As well, if there are other professionals in the firm who will be participating in any matter such as an associate or paralegal then the firm should indicate their names and hourly rates. For any retainer, it is imperative to know whether the client will be expected to provide ongoing retainers or if the matter requires only one retainer. The retainer must be maintained in a client's trust fund account at a designated bank and be fully compliant with all of the rules promulgated by the Board of Overseers. For any unused fees, the agreement should articulate that those fees will be remitted to the client, if unused, at the end of the matter.

As to fees and costs, this is also an important area for the client to understand as he engages with a law firm, especially for the first time. If a firm intends to charge you for certain expenses then those expenses must be delineated in the engagement letter itself. For example, if the client is to get charged for bulk postage then the engagement letter should say so. If the client is responsible for expert fees or consulting fees then those need to be articulated. Litigation matters will call for court fees while the preparation of real estate documents will require registry fees. As well, you should also make sure as to what fees you will not be paying for such as secretarial time, ordinary postage or copying expenses. Since disputes over fees between lawyers and clients remain the most common problem area in the legal profession today it is essential to make sure that the engagement letter you have is crystal clear as what you will be paying for.

3. Monthly Statements. Once you have established with the law firm how much you will pay and how you will pay it it is critical that you know when those payments will become due. To that end, the law firm you engage in must provide no longer than monthly statements on your account. In many instances law firms, for one reason or another, wait 60 days to provide billing to their clients for legal matters. If you have agreed to 60-day billing that is fine. If not, then it is assumed that a 30 day billing period is in place. Make sure that you have this covered in your engagement letter.

4. Liability Insurance. As a client, you should make certain that the law firm you hire has liability insurance in the event something goes wrong. Attorneys in Massachusetts are, at present, not required to carry malpractice insurance. Search around for the firms that have coverage. If necessary, you can always ask the firm for a copy of the declaration sheet as it pertains to their current legal malpractice policy. If a firm hesitates to provide this to you or does not carry insurance then run for the hills. You do not want to be doing business with them in any event.

5. File retention. The Supreme Judicial Court of Massachusetts recently amended its requirements in this area by mandating that all client files be maintained for six years. This clause must be made part of any engagement agreement.

6. Fee Disputes. No one goes into a relationship thinking that there will be a problem or even a lawsuit. In today's business climate, however, fee disputes between lawyers and clients have become prevalent. In the event that a fee dispute arises, that cannot be resolved between the parties then it would be wise to designate either court or arbitration as the place to resolve that fee dispute. In the Katz Law Group legal services agreement, for example, we specify arbitration as the forum for any dispute resolution. We also stipulate that arbitration shall be commenced before either the American Arbitration Association or JAMS Endispute.

7Predictability of Results. In the area of litigation, in particular, no law firm can predict with 100% certainty what any court outcome will be. It is thus imperative that the firm you choose has a provision that sets forth the understanding that the law firm does not guaranty a favorable result in any matter. 

While there may be other provisions that can be made part of any engagement letter the above list should give you a good idea of what you should both expect and demand from your law firm. If you are giving your hard-earned money to a law firm to perform certain services on your behalf, then it is incumbent on that firm to provide you with an understanding of what they will provide for you in any given case. At the Katz Law Group, our legal services agreements are clear and concise and are tailored to conform to the latest rules and regulations. We like to think of our legal services agreement as our  "ambassador" because it is the first chance the client sees as to how our firm does business.  If you would like to know more about our firm and what it takes to become a client, please call us at 508-480-8202 for further information.

About the Author

David Katz

Attorney David S.Katz is the founder and managing partner of the Katz Law Group, P.C., located in Marlborough, Massachusetts...

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