One thing every professional services firm cares about is the fees it will incur for legal advice. Thus, you will probably want to include detailed
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information about your lawyer’s (and his or her law firm’s) billing rates and practices in your engagement letter. Most engagement letters contain some information about fees, but you may want to check to see whether the information covers what you want it to cover. One important issue to consider is how the billing is structured. Depending on the nature of the work, you may prefer to opt for a f lat fee or retainer structure instead of being billed on an hourly basis. For example, if the lawyer performs certain activities on an ongoing or recurring basis, a f lat fee or retainer may be a desirable option. If, on the other hand, the activity appears to be a one-time event, you or your attorney may prefer to use an hourly billing approach. Additionally, there are billing questions to be covered in the area of procedure and extras. For example, how often will your lawyer bill you? What will the bill contain? And what are your lawyer’s policies regarding extra expenses? Will the firm charge for long distance? Copies? Document delivery? There may be other concerns, depending on your situation.
Another item your engagement letter should include is the explicit identification of your primary contact. If the primary contact works at a firm, he or she should be the person who is responsible for ensuring that the work done for you is effective and efficient.
There is no special formula for covering everything. You may have any number of specific needs or concerns that you want to set out in the engagement letter. The important point is to understand the situation and cover what is important for you.
WORK ORDER MODEL.
To take the professional services model to its
logical conclusion, a client could implement a work order model with its lawyers. Under this approach, you and your lawyer would complete an engagement letter that served as a master services agreement. Each subsequent piece of work would be set forth in a statement of work containing information typically found in a statement of work, but tailored to address your specific situation. This approach would help promote a common understanding of the relationship between you and your lawyer as well as the lawyer ’s specific assignments.
Scope of Assignments
In addition to defining the nature of the relationship in the engagement letter, it will probably be useful to implement some measures to control the scope of each assignment. Having clarity about project scope before work starts is important to a successful completion of the project. In this section, we discuss several ideas you may want to consider as part of an effort to define each assignment’s scope.
ESTABLISH A PRIMARY CONTACT FOR EACH MATTER.
In addition to
having your lawyer serve as the primary contact for the relationship as a
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whole, it should be useful to maintain a primary contact for each individual matter. While your primary contact should be able to help resolve issues for you on any particular matter, a primary matter contact will be more familiar with the nature and status of the particular piece of relevant work. Thus, a primary matter contact can provide updates more frequently and in greater detail. And the primary contact for a particular matter can also serve as a contact for your lawyer.
BE CAREFUL WHAT YOU ASK FOR.
In making requests to your lawyer,
you will probably want to consider the surrounding business context of your request as it relates to what you ask the attorney to do. For example, what if you receive a lengthy contract from a large telecom provider for a small, inexpensive service, and you understand that the contract is essentially a form agreement that, given its size, is unlikely to be amended (or even seriously discussed) by the provider? And what if you have serious concerns about a single, stand-alone provision in the agreement? If you ask an attorney to review the agreement, without even providing context, you are placing the attorney in a situation where he or she, without understanding the business context, may spend many hours thoroughly and thoughtfully reviewing the document, perhaps providing extensive comments. And the accompanying fees are likely to be significant given the size of the agreement. While this may frustrate you, resulting perhaps in a negative experience with your lawyer, it would not necessarily be the lawyer ’s fault. By providing the attorney with the business context of the situation and educating the attorney about what issues are of particular concern to you, you will provide guidance and business context, leading to a more efficient result.
EXPLAIN THE ASSIGNMENT CLEARLY. When you give an assignment to
your lawyer, try to explain the assignment clearly and in detail. Complaints about lawyers who seem to f loat around sometimes center on the lawyer ’s inability to understand and act on what the client wants. It is unfair to the attorney, however, to expect him or her to have either a thorough understanding of a given matter or clear direction about the deliverable if the client has not provided adequate preparatory information. This explanation really falls into two areas: the background of the assignment and the assignment itself.
First, you should try to help your lawyer understand the background of the assignment. Remember, your lawyer does not shadow you all day every day, so he or she will not know all the background facts to the matter you are assigning. Additionally, the lawyer may not know what you are trying to achieve. You may be glad in the long run if you take the time and make the effort to provide your lawyer with a greater understanding of what is going on from a business perspective.
Second, ensure that the lawyer understands what you want delivered.
Everyone has heard cautionary tales on this front: The client requests an answer to a seemingly simple question and 10 days later receives a 10-page
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memo on some esoteric choice of law issue. Lawyers are in the client service business, and most attorneys want to provide good client service just like any other professional services provider would, so when there is a major disconnect and failure in delivery, the client should recognize that the deliverables may not be clearly defined. Clients who take the time to clearly explain what they expect the lawyer to deliver will have a better chance of receiving the deliverable they want, even if the answer to a question is not the answer they hoped to receive, and receive fewer surprises.
ASK QUESTIONS.
It sounds obvious, but it is nevertheless worth mention-
ing because it often emerges as a source of dissatisfaction with legal services providers. Legal matters can sometimes be difficult to deal with, especially for busy professionals who have other important matters on their mind. For example, you may not be sure how the lawyer expects the relationship and process to function. Or you may not understand the nature of the matter being addressed. Additionally, sometimes clients are hesitant to display what they may fear is a lack of sophistication about legal matters. Thus, they avoid questions they think may be perceived as dumb, perhaps assuming things are covered, and instead move their attention to something else.
If you do not understand what is happening, ask questions. You should take the time to understand the details of the legal relationship. Again, the majority of lawyers, like most other professional services providers, want to provide quality service. And most lawyers understand that it is valuable for his or her client to ask questions up front instead of learning about things at a later date. Thus, you may be well served to ask any questions you may have concerning issues ranging from operational matters such as billing, which lawyers will be working on the matter, and any number of other issues, many of which are covered in this chapter, to legal matters, such as, for example, what the client’s options are on a given matter or the benefits and risks of a particular course of action.
PROVIDE CLEAR EXPECTATIONS ABOUT COST.
A final suggestion to
help promote a solid understanding between you and your lawyer is in the area of cost. Too often we hear stories of people who are surprised (and disappointed) by the amount they are being billed by their lawyers. Most service clients would not allow another professional services provider, for example an IT consulting firm working on a software development project, to begin without first establishing some understanding about cost. The same principle should apply to legal services. Thus, before your lawyer begins work, establish an understanding about cost. Specifically, no work should be started before it is clearly defined and you have a clear cost estimate. One of two things should happen: The attorney will agree and you will have a mutual understanding that benefits both you and the attorney, or the attorney will inform you that your expectation is too low, in which case you will need to rethink your estimate, persuade the attorney to work at a lower rate, or