The Woman Advocate Post Gives Some Nice Tips.
Shari L. Klevens and Alanna Clair, in a March 2, 2017 post on the The Woman Advocate (which was republished in a recent post by the ABA Section of Litigation), entitled “Engagement Letters: Four Key Terms to Reduce Risks,” do offer some nice guidance tips on retainer agreement terms that law firms should consider in their engagement letters to reduce overall risk. Here are the tips:
- Define the Client. For example, specify that the attorney specifies that he/she is representing the officer of a corporation but not the corporation itself (or its shareholders.) In fact, it might be prudent to include this language: “No duties have been undertaken or assumed for any person or entity that has not been specifically identified as a client.”
- Confirm the Scope and Duration of Representation. The authors note that legal malpractice claims have been dismissed where the engagement letter was clear as far as scope and duration of representation. For example, the authors suggest making clear that a representation is for the trial but not the appeal. With respect to a limitation on duration, specifying the event may prevent any application of a longer tail for work to notify a client about a renewal of a security filing or changes in the law. They also suggest a “file-closing letter” upon the terminating event, confirming the end of the relationship.
- Confirm the Fee. This means specifying that the representation is hourly, a contingency fee, or an alternative/mixed fee arrangement. One also needs to make clear the expenses for which the client is responsible, independent of the fee arrangement.
- Include Nonassignability Language. This relates to legal malpractice exposure, because some jurisdictions hold these claims are nonassignable by the client (the majority do) but some are not so clear. The authors recommend that attorneys include nonassignability language to help insure exposure is only limited to the unique attorney-client relationship.
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