Retainer Agreements or Engagement Letters

When you are retained by a client, you should consider confirming the terms of the engagement with the client in writing in order to avoid any misunderstanding between you and your client. Essential terms of the engagement may be confirmed by way of retainer agreement executed by the client or an engagement letter. The content of the retainer agreement or engagement letter will vary depending on the client and the nature of the matter. The following are some of the items that a lawyer or paralegal may consider confirming using a retainer agreement or engagement letter:

Scope of Services

  • the client’s goals and the specific legal services that the client will receive from the lawyer or paralegal 
  • the key steps in the matter and the lawyer or paralegal’s representation of the client 
  • any actions or next steps to be taken by the client (e.g. information or documents to be provided) or third parties (e.g. investigations or preparation of expert reports) 
  • the expected time required to complete the legal services and achieve the results 
  • any limits to the representation (e.g. when the engagement will end, tasks that cannot be performed under the law or goals that the lawyer or paralegal cannot achieve for the client)  
  • the results that the lawyer or paralegal is likely to achieve 

Fees and Disbursements 

  • an estimate of the fees or disbursements that the client will likely incur and any assumptions upon which the estimate is based 
  • whether the client will be charged an hourly rate or a flat fee, or by another method  
  • the amount and payment date of any initial money retainer or ongoing monetary retainers  
  • whether and how often the lawyer or paralegal will provide the client with interim bills, what they will include, and when the client can expect the final bill 
  • whether the client is responsible for paying disbursements directly or if the lawyer or paralegal will pay them and later bill the client (e.g. third-party expert fees)  
  • the rate of interest that will be charged on outstanding accounts (i.e. in accordance with the Solicitors Act)  
  • consequences of the client’s failure to pay accounts in accordance with the terms of the lawyer or paralegal’s engagement 
  • the lawyer or paralegal’s billing policy (enclosed for the client’s review), if the lawyer or paralegal has one   

Communications With the Client

  • manner of communication between lawyer or paralegal and client (e.g. telephone, email, mail, fax)
  • how the lawyer or paralegal will keep the client apprised of the matter on an ongoing basis (e.g. sending the client copies of correspondence, documents relating to the matter, memos to file; telephone calls; meetings)
  • how the client will keep the lawyer or paralegal apprised of the matter on an ongoing basis
  • frequency of reporting to the client
  • estimated time that it will normally take for the lawyer or paralegal to respond to client calls, emails, letters or other communications 

Withdrawal From Representation

  • circumstances where the lawyer may withdraw from representation (e.g. client’s failure to pay retainers or accounts in accordance with the retainer agreement, any other circumstances contemplated by the lawyers’ Rules of Professional Conduct or the Paralegal Rules of Conduct)  
  • consequences if the lawyer or paralegal cannot obtain adequate instructions from the client to complete the tasks for which the lawyer or paralegal was retained  
  • ownership of file contents 
  • charges for file transfer in the event that the file is transferred to the client or to another lawyer or paralegal 

If you choose to use an engagement letter or retainer agreement, the language and meaning should be clear and you should explain the terms of the document so that the client will understand the scope of the professional relationship.

Additional Resources:

Client Service and Communication Practice Management Guideline

Technology Practice Tips: Engagement Letters and Retainers

Sample Billing Policy