The properly prepared engagement letter can avoid misunderstandings with the client, mitigate potential problems, and set realistic expectations. Here are five key items to cover well in engagement letters. Make sure you have clearly identified who the client is and disclaim representation of other parties. For example, if you are representing a start-up company, state that you represent the legal corporate entity and not any shareholder, officer, director or employee.
Retainers are appropriate and beneficial in many situations.
But the client can be confused as to how the retainer is to be used. Ideally, from the lawyer's perspective, the retainer is in essence a security deposit to be used when needed at the end of the engagement. And, if that is the case, the client should be made aware that his first bill from the lawyer will need to be paid separately and that the retainer will not be used for that purpose. Fees and Expenses. Conflict of Interest.