Rules of engagement: get it in writing to get paid

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Published on 10/31/05

The rules of professional conduct require that lawyers have a signed engagement letter for a new client, stating each party's responsibilities for making the engagement a success.

You will have an easier time meeting your client's expectations and collecting your fee if you incorporate all essentials in the engagement letter.

Make sure clients understand that they're entering a two-way relationship. The lawyer agrees to perform to the best of his or her ability in accord with professional standards, and the client agrees to communicate and cooperate fully - which includes paying the bill.

At minimum, the following points should be covered in the engagement letter, with both lawyer and client stipulating and agreeing to the facts stated:

  • who the lawyer is representing;
  • the scope of the representation - what the lawyer will and will not do;
  • the fee to be charged and how it will be calculated;
  • when the fee is to be paid;
  • the client's responsibilities, including payment in accord with the agreement (ask the client his preference!);
  • the consequences of non-payment, including the lawyer's right to withdraw;
  • budgeting and staffing;
  • frequency and method of communications from lawyer to client;
  • dispute resolution procedures if either party to the engagement has a dispute with the other; and
  • resolution of conflicts of interest or other ethical issues.

This list is heavily weighted to the financial side, for good reason: Stipulating payment rates and terms up front is the best way to get paid.

If the client says at this point, "You're too expensive," you respond by saying that other of your clients find that their investment in their matters with you are more than justified by the results. However, you can understand this client's feeling and that this client should find other counsel because your fees are not negotiable.

Often, this produces one of two results:

  1. the client is impressed with your negotiation skills and wants to be represented by a tough, expensive lawyer, and therefore will accept your terms of engagement; or
  2. the client leaves but becomes a great walking advertisement for you, convincing listeners that you must be highly qualified because you're aggressive, expensive and unapologetic.

You can also be more flexible and counter a price concern not by lowering your rates, but by taking services "off the table."

In other words, for X dollars, you will do this and for "Y" dollars you will do that less "abc." The client gets the message that you are not changing your price; you are charging a different price for a different quality of service. If returned phone calls within two hours are part of your regular hourly rate, tell the client that your response time will be 24 hours at a lower price.

When you get agreement on things like this up front, your chances of collecting your fee go up significantly because the client understands what to expect. The time to make it clear is right at the start - as documented in the engagement letter.

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