Lawyers Engagement Letter Matrix

Lawyers Engagement Letter Matrix TRAVELERS 1ST CHOICE A well-crafted engagement letter can be a very effective tool for avoiding and defending malpractice claims and ethical complaints. Furthermore, engagement letters help establish both your and your client s expectations regarding the engagement of your legal services by avoiding any ambiguities or misunderstanding. Even the best engagement letter is of no use, however, if it is not utilized in the specific client matter involved. Counsel should have form engagement letters to use as starting points for specific modification and individualization on various files. It is important to send out an engagement letter, by method that provides verification of receipt (i.e. email and/or certified mail) on each file before beginning work on a matter. To help you prepare the proper engagement letter, Travelers has gathered together relevant information and model engagement letter provisions for your review. These letters are intended as reference material only. Your engagement letters will need to conform to state law and ethical requirements in order to effectively protect you. Then, you ll need to work with your attorney in order to tailor them for your specific requirements. When considering engagement letters, remember to: Comply with the applicable standards Inform your clients Limit your risk Draft an engagement letter for every engagement Consult with your attorney Page 1 of 11

Lawyers Engagement Letter Matrix General Topics to Address or Include in Most Engagement Letters 1 Client Identification 11 Client Responsibilities 2 Related Party Identification 12 File/Document Retention 3 Scope of Representation 13 Withdrawal or Termination 4 Staffing the Representation 14 Post-Representation Issues 5 Fees 15 Methods of Communication 6 Expenses 16 Confirmation of Receipt 7 Attorney-Client Privilege 17 Closing Letter 8 Identification of Goal/Purpose 18 Disengagement Letters 9 Schedule/Timeline 19 Non-Engagement Letters 10 Scope of Authority Model Engagement Letters Plaintiff Case Contingency Fee Estate Planning Case Hourly Fee Criminal Law Case Flat Fee General Litigation Case Hourly Fee Consult as needed with your own attorney or other professional adviser. By providing this information as a possible source of reference, Travelers is not providing accounting, legal, or other professional advice. Please consult with your own lawyer regarding specific requirements, legal or otherwise, applicable to a particular Lawyers engagement letter. Click on the Engagement Letter Topic of interest to view the sample language. If you have questions about the Engagement Letter Matrix, please contact the Travelers Risk Management Helpline at 888.330.TRAV (8728). 2014 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries. 59844 Rev. 3-14 Page 2 of 11

1. Client Identification Specify who the client is or clients are, by precise legal name. Do not list general, blanket inclusionary language such as and all subsidiaries or and affiliates unless these entities are actually clients; if so, better to specifically identify each of these additional entities by precise name. In some situations, it is appropriate and probably advisable to also specify who is NOT a client. If an entity is identified as a non-client, that entity should be separately advised as such, in a document separate from the engagement letter itself, and asked to confirm such understanding in writing, if possible. This letter confirms our engagement to represent not retained to represent. and in the matter of. We are 2. Related Party Identification Specifically note if attorney and/or firm has represented (or is representing) another party or any of the lawyers/firms involved in the case, and follow specific waiver rules as appropriate. Conflicts of Interest and Our Professional Obligations Because we are representing both and, a potential conflict of interest exists. A conflict of interest is a real or potential incompatibility between the interests of two clients. When a lawyer represents more than one client in the same case, what is good for one client may not necessarily be good for the other. A lawyer, however, still owes both clients duties of loyalty, confidentiality, and other professional duties. Rule 1.7 of the [State] Rules of Professional Conduct says a lawyer shall not represent or continue to represent a client if there is a significant risk that the lawyer's own interests or the lawyer's duties to another client... will materially and adversely affect the representation of the client, except as permitted in [this rule]. In other words, we cannot necessarily represent both of you if your interests diverge. Some general examples of conflicts of interest are a discrepancy in the parties' testimonies, incompatible positions, and substantially different possibilities of settlement. We also owe a duty of confidentiality to both of you. Rule 1.6 of the [State] Rules of Professional Conduct requires us to maintain in confidence all information gained in the professional relationship with a client, including information which the client has requested to be held inviolate or the disclosure of which would be embarrassing or is likely to be detrimental to the client.... We still have to follow this rule when we represent two clients in the same case. If either of you asks us to keep information secret, we would have to honor that request. We would then probably have to withdraw from the joint representation. Clients can choose to waive a potential conflict of interest. They are not required to waive a potential conflict of interest. Rule 1.7(b) says that a lawyer can represent two clients with potentially conflicting interests if both clients consent after (1) consultation with the lawyer, (2) having received in writing reasonable and adequate information about the material risks of the representation, and (3) having been given the opportunity to consult with independent counsel. This means you can allow us to represent both of you despite a potential conflict of interest. We cannot represent anyone if either of you decides to assert claims against the other in this case. [State] Rule of Professional Conduct 1.7. Source of Potential Conflict [Explain in detail why there is or may be a conflict of interest.] Waiving Potential Conflicts of Interest We want you to have information about potential conflicts of interest and to give you a chance to choose whether you want us to represent both of you. Before you decide whether to waive these potential conflicts of interest, we encourage and invite you to talk to other lawyers. Page 3 of 11

Please understand that you have no obligation to consent. If you would like to waive this conflict of interest and allow us to represent all of you, please sign below. For Conflict with Former Client We have been asked to represent in the matter of. This creates a potential conflict of interest. We cannot represent without your consent. If you are willing to waive the potential conflict of interest and allow us to represent, please sign at the end of this letter. You are under no obligation to consent. Conflicts of Interest and Our Professional Obligations A conflict of interest is a real or potential incompatibility between the interests of two clients. A lawyer, however, still owes both clients duties of loyalty, confidentiality, and other professional duties. Rule 1.9 of the [State] Rules of Professional Conduct says: A lawyer who has formerly represented a client in a matter shall not thereafter represent another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client unless the former client consents after consultation. Thus, we cannot represent without your consent. We still owe you a duty of confidentiality. Except in certain situations, Rule 1.9 of the [State] Rules of Professional Conduct requires us to maintain your confidences. Former clients can choose to waive a potential conflict of interest. They are not required to waive a potential conflict of interest. Rule 1.9 says that a lawyer can represent a new client despite a conflict with a former client if the former client consents after consultation. Source of Potential Conflict [Explain in detail why there is or may be a conflict of interest.] Waiving Potential Conflicts of Interest We want you to have information about potential conflicts of interest and to give you a chance to choose whether you will allow us to proceed with the representation. Please understand that you have no obligation to consent. Before you decide whether to waive these potential conflicts of interest, we encourage and invite you to talk to other lawyers. If you are willing to waive this conflict of interest and allow us to represent, please sign below. 3. Scope of Representation Set forth the tasks and work the firm is being retained to perform in specific detail, and also list the related work that the firm is not undertaking to perform, as appropriate. This letter confirms our engagement to represent and in the matter of. We are not retained to represent. Also, we are not retained to do, 4. Staffing the Representation Identify by name and billing rate the attorneys and staff who will work on the matter, and include an express provision that others in the firm are authorized to also work on the file in an emergency situation (and list categories/ranges of billing rates for such other individuals not specifically identified). Even non-billing staff expected to have contact with the file should be listed, as this can safeguard against later allegations of undisclosed conflicts. Page 4 of 11

The lawyers who will work on this matter (along with their corresponding hourly billing rates) are ( /hour), ( /hour), and ( /hour). On an as-needed basis, we may assign other lawyers from our firm to work on this matter, and we will bill for their time at their standard hourly billing rates. Our paralegals (and their corresponding billing rates) are ( /hour) and ( /hour). On an as-needed basis, we may assign other staff from our firm to work on this matter, and we will bill for their time at their standard hourly billing rates. 5. Fees Set forth the basis for the fee(s) to be charged what type (hourly, flat-rate, contingent) and when/how they are to be paid. Many jurisdictions specifically require contingent fee agreements to be in writing. The client should sign a contingent fee agreement. Also, any statutorily required caps on fees (as in worker's compensation cases) should also be addressed in writing. The agreement should indicate who is paying the fees, and, if a third-party is paying, any specifics of that arrangement and what happens if that third-party does not pay or is only to pay a certain amount or only for certain parts of the representation. Also, specify what the process will be for addressing overdue invoices. If a retainer is used/due, the agreement should specify how and when that retainer will be used and whether and when it needs to be replenished as well as what occurs if the specified process is not followed. Please note: certain jurisdictions have restrictions on what types of retainers are permissible and under what circumstances. For Hourly Billing Arrangement Legal services will be provided at the hourly rates of the professionals involved, plus charges for photocopying, special delivery services, and other out-of-pocket costs. These rates may change annually and, if so, you may be given written notice. We will send you monthly invoices. Payment will be due on receipt of our statements. As a bill is not paid within days of receipt, we will withdraw from the engagement. For Flat-Fee Billing Arrangements Attorney agrees to represent client in the above-referenced case in consideration of a retainer fee of $[amount]. This is a flat fee for the entirety of the representation. It is understood by the client that the retainer fee is being paid to the attorney to cause the attorney to act on client's behalf, which in some cases may preclude the attorney from accepting alternative employment. Accordingly, the client agrees that the retainer fee is earned by the attorney(s) agreeing to accept this case and complying with the obligations under the law arising from such employment, and the client should have no expectation of a refund. For Contingency Fee Arrangements You have asked us to represent you in asserting claims against [defendant] arising out of [claim/source of controversy]. You will pay us [ %] of any gross settlement or verdict recovered in the case. The gross settlement or judgment is the face amount of the settlement or judgment entered; it does NOT include expenses or any other adjustments. Expenses will be deducted AFTER the calculation of the contingent fee. If there is no recovery, you owe us nothing, other than reimbursement of expense. For an Insurer (or Other Third-Party) As you know, is paying our bills. Nevertheless, you and the firm are our clients, not. Our professional obligations are to you. If you ever ask us to keep anything confidential, we will not share it with. If does not pay our bills, you agree to pay them when we send you an invoice. Note that Rule 1.8 of the [State] Rules of Professional Conduct says we cannot accept compensation for representing a client from someone other than the client unless (1) the client consents after consultation, (2) there is no interference with our independence of professional judgment or with the client-lawyer relationship, and (3) we maintain client confidences. If at all possible, we will try to resolve this matter on terms of your choosing, although the insurance company has to decide for itself how much, if anything, it is Page 5 of 11

willing to pay to settle any claims that may later be brought. It is standard practice for an insurance company to pay defense counsel's bills in litigated matters. Please let us know if you have any questions, concerns, or objections about our fees as your lawyers. For Retainer Arrangement You agree to pay us a retainer of $. We will draw down that retainer as we perform services and incur expenses. If we exhaust the retainer, we may, at our option, ask you to replenish that retainer. At the conclusion of our representation, we will of course refund any balance on your retainer. 6. Expenses Specify what expenses the client will be charged and/or expected to reimburse, as well as what the process will be if the expenses are not paid/reimbursed, specifically as to what this may mean for custody of the physical file (rules vary by jurisdiction). Also, set forth what experts are anticipated and who will be responsible for retainers and payments to these experts as well as how that process will work. Please note: whether or not a client can, or cannot be charged for copies, and under what circumstances, varies greatly among jurisdictions. You must consult your local rules and follow the appropriate process regarding copying charges and file retention or release on termination and/or when disputes arise over expenses, fees, or copies. You are also responsible to pay for the expenses of litigation in this matter, which include, without limitation, telephone charges, copying costs, delivery charges, court filing costs, court reporter charges, transcription costs, legal research costs, and other similar expenses. We anticipate the need to hire experts on these subjects:. You agree to pay the invoices of any experts we retain or to reimburse us for any expert fees we pay for you. We will undertake to consult with you prior to incurring expert expenses. 7. Attorney-Client Privilege Identify any risks of waiver of the privilege; include explanation of how privilege works, to whom or what it attaches/applies (and doesn t). Your communications with us are protected by the attorney-client privilege. That means your communications to us and our communications to you are confidential. Neither adverse parties nor anyone else has a right to know what we say. The privilege belongs to and not to anyone else. Note that our communications with or in the presence of people who are not our clients are not privileged. Note also that you can lose the protection of the privilege if you share our communications with other people. If you have any questions about the attorney-client privilege, please let us know. 8. Identification of Goal/Purpose Identify the specific reason the client is retaining the firm and what the intended outcome is. If possible, the attorney should provide an estimate of the likelihood of success and/or an outline of the obstacles and problems that may be encountered in moving toward the stated goal/purpose. We are retained to represent you in the matter of. We understand you goal is. We will do our best to help you achieve that goal. Bear in mind that we cannot predict the outcome or guarantee any results. Here are some potential obstacles to achieving your goal [or reasons you might not win your case]:. Page 6 of 11

9. Schedule/Timeline Include a realistic description of the length of time the representation will likely last and/or the time it will likely take to realize the purpose of the engagement. Have a general roadmap and timetable for significant events and for the ultimate goal to be accomplished, stressing that these are estimates and that outside factors may effect or even control the length of time. Provide examples, or a non-exhaustive list, of some of those possible outside factors. For Transactional Engagements We will try to complete our work as quickly as possible. Understand that sometimes legal work can take a while to complete, and it is not easy to predict when we will finish. If there are specific deadlines by which you need our work product, please let us know in writing. For Litigation Engagements We will try to resolve this case as quickly as possible and on terms of your choosing. Please understand that lawsuits sometimes move slowly. Some things are beyond our control, like the trial date and the time it takes the Court to rule on contested motions. We cannot guarantee that the case will be resolved by any particular time. We can tell you generally that discovery will begin on and will last approximately months. When discovery closes, the parties may file motions, and those motions could delay the date of trial. An appeal could follow a judgment in the trial court, and that could further delay the resolution of the case. 10. Scope of Authority The agreement should define the extent of the firm s authority to act on behalf of the client, and in what context and role within the representation. If there are important matters that must be decided by the client, those should be identified to avoid confusion about the firm s responsibilities and authority to act. If the jurisdiction s rules and laws provide that the attorney is responsible for litigation strategy and the client for ultimate resolution decisions, the agreement should indicate as such. You give us authority to make strategic and procedural decisions in the course of litigation. These include, for example, whether to depose a witness, agreeing to deadlines (or extensions of those deadlines), whether to file motions, and what documents to request and produce. We will, of course, consult with you throughout the course of the litigation. You have the exclusive right to make substantive decisions. These substantive decisions include whether to demand or waive a jury trial, where to file the claims or to what venue to transfer them, whether to invoke an evidentiary privilege, and, most importantly, whether to settle. 11. Client Responsibility The agreement should set forth what is expected of the client what duties the client has to make the representation possible and assist in realizing the ultimate purpose/goal. Providing up-to-date contact information, effectively and promptly communicating with the firm and cooperating with the attorneys to effectuate the engagement purpose is crucial to the attorney-client relationship. These responsibilities such as accepting phone calls, keeping appointments, giving depositions, producing documents and keeping the attorney updated on any new developments should be spelled out in the agreement. Also, when defending a claim, a lawyer may owe a duty to advise the client to put insurance carriers on notice. Language to this effect should appear in the engagement letter. Page 7 of 11

You agree to respond timely to our communications, requests for information, and requests for documents. You agree to forward us any communications relating to the case. If you change your e-mail address, telephone number, or mailing address, you agree to notify us. In the event you have other available insurance coverage which may apply to the potential claims, it is critical that you place the appropriate carriers on notice immediately, or you may jeopardize your rights to coverage under those policies. Some of the types of coverage that may apply include excess coverage, any coverage to which you may be entitled in the event you practiced with another firm, policies maintained by your current or former employers, umbrella policies, tail policies, policies that overlapped with your current coverage, and perhaps even homeowner's policies. There may even be coverage under your personal excess policies for certain types of claims. We strongly recommend that you consult with your broker to make certain that your rights under all possible policies are protected. If you have any policies you think might provide you with additional coverage, please provide us with a copy of the policy immediately. 12. File/Document Retention Engagement letters should confirm the extent to which the law firm will maintain documents as the matter progresses and after the representation has ended. It should also spell out what documents will be provided to the client as the matter progresses and whether and when original documents or items will be returned to the client upon completion of the matter. We will send you documents, correspondence, and other information throughout the representation. These copies will be your file copies. We will also keep the information in a file in our office, which will be our file. At the conclusion of the representation, should you desire a copy of those portions of the file that are considered the client's, please let us know. Otherwise, we retain the files for a period of seven years running from the conclusion of the representation, at which time the files are destroyed unless you notify us to the contrary in writing. 13. Withdrawal or Termination The agreement should set forth reasons under which a firm will choose or need to withdraw from representation, how that process will go should this become necessary or should the firm decide to do this, and what will occur with the client s file materials in the firm s possession should this occur. Different jurisdictions have different rules sometimes opposite, in fact as to whether or not a firm can or even must retain the client file on withdrawal and under what circumstances. You must consult your local rules on withdrawal and file retention/release. For Transactional Engagements We reserve the right to terminate the engagement if you do not timely pay our bills. If that happens, you will still have to pay the remaining balance of our fees. We will return your original file to you, and we will keep a copy. For Litigation Engagements We reserve the right to withdraw if you do not timely pay our bills. If that happens, we will ask the Court for permission to withdraw. We will be your lawyers unless and until we get Court permission to withdraw. If and when the Court does grant our motion, we will no longer be representing you, and you should begin consulting with a new lawyer of your choosing. [NOTE: A corporation generally can appear in court proceedings only through a licensed attorney. In most situations, a corporation will have to retain new counsel, or it could be held in default.] Page 8 of 11

If a Deadline is Approaching Please note that the deadline for is [DATE]. The consequences of missing that deadline could include. We encourage you to consult with a new lawyer well in advance of that deadline. 14. Post-Representation Issues Whether or not the firm retains any responsibilities to the client after the representation has ended, such as file retention or to provide updates should the applicable law or circumstances surrounding the representation change, and how that process will work if continuing duties are indicated, should be addressed in the agreement. For General Language We will send you documents, correspondence, and other information throughout the representation. These copies will be your file copies. We will also keep the information in a file in our office, which will be our file. At the conclusion of the representation, should you desire a copy of those portions of the file that are considered the client's, please let us know. Otherwise, we retain the files for a period of seven years running from the conclusion of the representation, at which time the files are destroyed unless you notify us to the contrary in writing. We always try to remain abreast of developments in the law. However, we are not retained to notify you of changes in the law that take place after our engagement ends. Nor are we engaged to supply any advice or perform any services after our engagement ends. After our engagement ends, we will be happy to help you in any way we can; please feel free to call us, and we can enter into a new engagement. For Plaintiff's Cases If and when we obtain a judgment, we will record that judgment in at least one jurisdiction. The purpose of recording the judgment is to create a lien on the defendant's property. That helps collect on the judgment. Judgment liens do not last forever. Under [State] law, judgment liens expire in years. We are not retained to renew any judgment lien or to ensure that a judgment lien remains current. If and when it comes time to renew a judgment lien, you may contact us (or another lawyer of your choosing) and enter into a new engagement to renew the judgment lien. For Secured Financing As part of securing the debt, we will, as necessary, record UCC financing statements in the appropriate jurisdiction(s). UCC financing statements do not last forever. Under [State] law, they expire in years. You can renew them by filing continuation statements. You should consult with a lawyer to ensure the proper filing of a continuation statement; under current law, you can renew a UCC financing statement by doing this:. We are not retained to renew any UCC financing statements or to file any continuation statements. When it comes time to renew the UCC financing statements, please feel free to contact us (or another lawyer of your choosing) to enter into a new engagement for the renewal of the UCC financing statements. 15. Methods of Communication The agreement should confirm which methods of communication regular mail (to which addresses), email (to which addresses), facsimile transmission, home phone, work phone, cell phone, etc. are acceptable and preferred and which are not acceptable. Current contact information should be listed and the client should be reminded of its responsibility to keep any and all such information current and complete. Page 9 of 11

's cell-phone number is and 's cell-phone number is. If you ever need to reach either of us when we are out of the office, please don't hesitate to use these numbers. E-mail is also a good way to communicate with us. We will typically communicate with you by phone (at this number ) or by e-mail (at this address ). If you would prefer that we communicate by some other method or that we use other numbers or addresses, please let us know in writing. Also, please notify us in writing if any of your contact information changes. 16. Confirmation of Receipt The client s receipt of the engagement letter must be confirmed in order for the document to fully serve its purpose. Ideally, the lawyer will obtain the client s signature with date of signature on multiple copies at least one to retain and at least one to provide to each client. When this is not feasible, then a letter should be sent out, by email and/or certified mail so that receipt can be confirmed, with the terms of the representation specifically outlined as set forth throughout this outline. Be advised that when prospective clients meet with an attorney, and/or send/leave documents or file materials with an attorney, an allegation could arise later that this prospective client believed the attorney was going to take certain action and/or protect certain rights for the prospective client. You should be wary of such situations, and allowing prospective clients to leave without clarifying your responsibilities, or lack thereof, in writing and with written acknowledgment, if possible, from the prospective client (see, also, Item 19 with synopsis and sample, below) should be avoided. For Letters Without a Signature Line We ask that you notify us immediately if any of the terms of this letter are not to your agreement, and if we receive no response, we will assume that you are in agreement with the terms of this engagement as detailed in this letter. 17. Closing Letter When the purposes of the engagement letter have been fulfilled, a closing letter should be sent, thereby terminating the relationship and officially closing the file. The client should be informed about what transpired and how the files will be stored. I write to confirm that our representation of you [name all parties] in the matter of has concluded. We will maintain our files for seven years from today s date, at which time the files will be destroyed. [Describe any outstanding fee or expense issues]. If you wish us to do any additional work on your behalf, we will need to execute a new engagement letter. 18. Disengagement Letters When a firm must cease representation of a client and/or needs to withdraw from representation, a letter must be sent to the client informing them of the firm s intention and the reason for the withdrawal. In some states, particularly if the engagement was a litigation matter, local rules describe the manner in which a firm must disengage, and often require consent of the court. Local rules should be consulted prior to sending a disengagement letter. We must withdraw from representing you [name all parties] as of today s date. If you hire a successor counsel, they may contact us, and may view a copy of your file. [Describe any outstanding fee or expense issues]. We will maintain our files for seven years from today s date, at which time the files will be destroyed. Page 10 of 11

19. Non-Engagement Letters If the firm has decided not to represent a prospective client due to a conflict of interest or otherwise, it is important to send a nonengagement letter to that prospective client memorializing the fact that the firm will not be representing that client. This letter should send a clear signal that the prospective client will not be represented by the firm. A return receipt requested card should accompany the letter to evidence that the letter was received, or alternately, it can be sent by e-mail. It was a pleasure to meet/speak with you and [name all attendees] on [date]. However, we are not going to represent you or [name all individuals and entities] in the matter we discussed or any other matter. We wish you the best of luck in retaining counsel. There may be deadlines which pertain to the matter we discussed, and we recommend that you consult with a new lawyer well in advance of any such deadline. We have no file materials which are yours or which pertain to the matter we discussed. The Travelers Lawyers Professional Liability Engagement Letter Matrix and associated materials were prepared with substantial assistance and contribution from the law firms of Carlock Copeland & Stair, LLP, and Litchfield Cavo, LLP. travelers.com/1stchoice Travelers Casualty and Surety Company of America and its property casualty affiliates. One Tower Square, Hartford, CT 06183 This matrix is for general informational purposes only. None of it constitutes legal advice, nor is it intended to create any attorney-client relationship between you and the author. You should not act or rely on this concerning the meaning, interpretation, or effect of particular contractual language or the resolution of any particular demand, claim, or suit without seeking the advice of your own attorney. This information does not amend, or otherwise affect, the terms, conditions or coverages of any insurance policy or bond issued by Travelers. This information is not a representation that coverage does or does not exist for any particular claim or loss under any such policy or bond. Coverage depends on the facts and circumstances involved in the claim or loss, all applicable policy or bond provisions, and any applicable law. 2014 The Travelers Indemnity Company. All rights reserved. Travelers and the Travelers Umbrella logo are registered trademarks of The Travelers Indemnity Company in the U.S. and other countries. 59844 Rev. 3-14 Page 11 of 11