For law practices

The lawyer engagement letter, and the fee rules it must satisfy

The letter that opens a matter is also the document that decides how it closes: what was in scope, what the client owes, and who was allowed to give instructions.

Fee arrangements in a law practice are not purely a matter of contract. your provincial law society's retainer rules governs what has to be communicated and, in many cases, put in writing before the work begins — and the consequences of getting it wrong run from an unenforceable fee to a regulatory complaint.

The template below is written as a client-facing letter rather than a retainer agreement in legalese, because a client who reads it is a client who cannot later say they did not understand it.

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Lawyer engagement letter

The full letter as a PDF, written for Canada, covering scope, fees, trust money and termination.

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What a legal engagement letter has to settle

1

Who the client is, and who is not

In a company matter, the client is usually the company rather than the director sitting in front of you. In a family matter, it is one spouse. Saying so in writing prevents the most common conflict problem there is.
2

The scope of the retainer, and its end

The matter you are retained for, the steps included, and what is excluded — appeals, enforcement, tax advice, other jurisdictions. Say what event ends the retainer, because a matter that never formally ends is a limitation period problem waiting to happen.
3

Fees, in the form the rules require

The basis of the fee — hourly, fixed, contingency where permitted — the rates of everyone who will work on it, what disbursements are charged, and how often you bill. your provincial law society's retainer rules sets the floor; your own regulator may require more.
4

Money held on account

How retainers and client money are held, which account they sit in, how they are applied to invoices, and what happens to the balance when the matter ends. This is the clause your regulator will read first.

The lawyer engagement letter

Written for Canada. The download is the same text as a PDF you can put on your letterhead.

[Firm letterhead]

[Date]

[Client name]
[Client address]

Dear [Client contact],

Thank you, and who we act for

Thank you for instructing [Firm name]. This letter sets out the terms on which we will act. Our client in this matter is [Client name] and only [Client name]. We do not act for any related company, director, shareholder or family member unless we confirm that separately in writing.

The matter, and its scope

You have asked us to [describe the matter and the outcome sought]. Our retainer covers [list the steps included].

It does not cover [appeals, enforcement, tax advice, advice on the law of another jurisdiction, or any other matter]. If you would like us to act on any of those we will confirm a separate scope and fee first.

Who will do the work

[Name] will have day-to-day conduct of the matter, supervised by [Name]. We may involve others where it is more efficient, at the rates set out below. We will tell you if the person with conduct changes.

Fees, disbursements and billing

Our fees are charged [on a fixed basis of [amount] / at hourly rates of [rates]] in Canadian dollars, in units of [number] minutes. Disbursements — [filing fees, experts, searches, travel] — are charged in addition, as incurred.

We invoice [monthly / on completion of each stage]. Invoices are payable within [number] days. We will give you an estimate for the matter as a whole and update it if it changes materially, but an estimate is not a cap unless this letter says it is.

Money held on your behalf

We ask for [amount] on account before we begin. Money you pay us on account is held in our [client / trust] account and applied to invoices as they are issued. Any balance is returned to you when the matter ends. [Interest is dealt with as follows.]

Conflicts and confidentiality

We have checked for conflicts of interest and are not aware of any. If one arises, we will tell you promptly and may have to stop acting. Everything you tell us is confidential and privileged, subject to the limited circumstances in which the law or our professional obligations require disclosure.

Ending the retainer

You may end this retainer at any time by telling us in writing. We may stop acting where we have good reason and reasonable notice, including where invoices remain unpaid or where a conflict arises. In either case fees and disbursements incurred to that point remain payable, and we will tell you what steps remain outstanding on the matter.

Your records and ours

At the end of the matter we will return your documents on request and keep our file for [number] years, after which it is destroyed. We hold your information in accordance with PIPEDA or its provincial equivalent. If you are not happy with our service, [describe the complaints procedure and the regulator's contact details].

Agreement

Please sign and return a copy of this letter. If you have any question about any part of it, ask before you sign.

[Name], [Firm name]

Agreed by [Client name]:

Signature ______________________ Date ____________

Before you use this

Supplied as-is, with no guarantee. These templates are general information, not legal advice, and not a substitute for it. Have your own legal adviser review and adapt one to your practice and your jurisdiction before you put it in front of a client. FirmHello accepts no responsibility or liability for any use made of them.

Where legal engagement letters fail

Ambiguous about who the client is

The director assumes you act for them personally. When the company's interests and theirs diverge, that assumption becomes a conflict and a complaint.

An estimate treated as a cap

If the letter does not distinguish the two, the client will, and they will do it after the bill arrives.

No stated end

A retainer that never ends leaves you owing duties on a matter you stopped thinking about years ago.

Other engagement letters

What it is Engagement letters Template and samples Templates Appraisal Appraisal

Questions law practices ask

Is a written engagement letter mandatory?

It depends on where you practise and on the size and type of the matter. your provincial law society's retainer rules is the starting point, and several jurisdictions make writing mandatory above a monetary threshold — in California, for example, a written fee agreement is required where fees are reasonably expected to exceed $1,000. Check your own regulator before relying on anything here.

Does it need to be signed to be effective?

A signed copy is much stronger evidence, and in some jurisdictions the rules effectively require the client's agreement in writing. Where a client proceeds without signing, confirm in writing that the terms apply and keep the acknowledgement.

Can one letter cover several matters for the same client?

A standing terms-of-business letter plus a short matter-specific scope letter is a common arrangement and works well. What does not work is one letter from four years ago describing a different matter.

What about contingency or conditional fees?

They are permitted in some jurisdictions and for some matter types and prohibited in others, with their own disclosure requirements. This template does not attempt to cover them; take advice specific to your jurisdiction.

The letter is the easy half

Sending it, getting it back signed, and finding it again in two years is the half that eats the week. That is what the portal is for.

No card and no sales call. If you would rather tell us about your firm first, use the longer form.