May 2017

The two key letters you should be writing to your clients

There are two types of letters that lawyers should be writing to their clients — the engagement letter and the non-engagement letter. That’s according to Laurence J. Fox, a trial lawyer of 38 years and partner at Drinker, Biddle & Reath LLP in Philadelphia, who discusses them in “Engagement Letters,” an episode of Sound Advice from the Section of Litigation.

“This is a difficult topic,” acknowledges Fox, who also is Crawford Lecturer at Yale Law School and former chair of the ABA Section of Litigation. He begins with a hypothetical scenario. Suppose you meet with a prospective client who has been badly injured at the hands of a terrible doctor, but as the story unfolds you start having misgivings, including about the merit of the case and if your firm can handle it. You tell her that her case isn't very strong and you’re not the right lawyer for her and send the client on her way. A few weeks later, she calls and asks how the case is going. You’ve forgotten about it, but repeat that you aren’t interested in representing her, even as she says she is sure you were handling her case. Even worse, you realize that between the two interactions the statute of limitations has run out on her case.

This scenario illustrates why anytime you meet with a potential client, Fox says, you should follow up with a letter. “No one videotaped the conversation,” he says, so she will have her story that you agreed to take her case, and you will have your side. Worse, he says, you did in fact give her advice, saying her case wasn’t strong (without doing any research on it).

Fox says with this scenario you could be in trouble two ways: first, because she could be your client; and second, she could be a prospective client who didn’t pursue her claim because of your “advice,” which very well may be wrong. Thus, the client could become an “accidental client,” which you always want to avoid, Fox says.

So to prevent this scenario, he says, you have to send a “non-engagement” letter. Keep it short and to the point. He recommends writing that you met with the potential client but you’re not taking the case and you didn’t give any advice. Further, if the potential client wants to pursue the case, she should do it quickly with other lawyers because the claim “could be extinguished by the passage of time,” he says.

The non-engagement letter is not required by the Model Rules of Professional Conduct, but Fox said he thinks it should be.

The next letter is the “engagement” letter. Although also not required by the Model Rules in most states, Fox says, “it should be required by you.”

This letter should also be succinct. Make clear who you’re going to represent (the person or the company, if it’s unclear), the boundaries of the representation and the fee basis. Make sure you write that the payment of fees on a prompt basis is required of the client, and that the failure to do so will give you a basis for withdrawing from the case. (This will give you evidence for the judge for grounds for withdrawal, should it come to that, Fox says.)

In addition, clarify that the client is responsible for expenses, and how much they will be charged for photocopying, messenger services, etc. “It is absolutely critical to get the client to sign it,” Fox says, although “it is not required as a matter of professional responsibility.”

And yes, he acknowledges, this is practicing “defensive law.”

Further, Fox says every jurisdiction requires that any engagement letter for a contingent fee agreement has to be in writing or it won’t be enforced.

Finally, Fox addresses disengagement letters from existing clients that you want to turn into former clients, which he called “even harder” to write. Although you get new business from old clients, there may be business reasons for wanting to turn a happy client into a former client. It may be advantageous to have the client in the database as a former client, so the client doesn’t disrupt getting new business.

Still, you want that client to come back for other matters, so Fox says that disengagement letter must be very diplomatic. You want to say something like “we have completed the engagement … and if in the future you have different matters, we hope you’ll re-engage us.”

These letters – the engagement letter and two types of disengagement letters, Fox says, are “critical for avoiding liability” and for “creating the right atmosphere for a good lawyer-client relationship.”

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