What is an engagement letter?

A letter from a lawyer to a new client that confirms who the client is, what the lawyer will and will not do, how fees and expenses are charged, and how the engagement ends. The client signs a copy to accept it.

Is an engagement letter required?

ABA Model Rule 1.5(b) asks for the scope and the basis of the fee and expenses to be communicated, preferably in writing. Some states require writing outright, such as California for fees over $1,000 and New York unless the fee is under $3,000, and Rule 1.5(c) requires a contingent fee agreement in writing, signed by the client.

What is the difference between an engagement letter and a retainer agreement?

Very little in substance: both set the scope, fees and terms. An engagement letter is written to the client and countersigned; a retainer agreement is set out as a contract and signed by both sides. Choose the form your clients expect.

Can a retainer be non-refundable?

Rarely. Under Rule 1.16(d) an advance fee that has not been earned must be refunded when the engagement ends, and most states treat a non-refundable label on an advance as unenforceable. A true general retainer, paid only to secure the lawyer's availability, is the narrow exception.

What should a contingency fee agreement include?

Under Rule 1.5(c): the percentage on settlement, trial and appeal, the expenses deducted from the recovery, whether they come off before or after the fee, and which expenses the client owes even without a recovery. The client must sign it.

Do I need a new engagement letter for each matter?

Yes, for a new client, and best practice for each new matter. Rule 1.5(b) excuses a regularly represented client billed on the same basis, but a separate letter still fixes the scope of each matter.

What billing increment should the letter state?

The one you bill in, usually a tenth of an hour (6 minutes). Corporate clients' billing guidelines often require it, and a letter that names the increment avoids disputes about short tasks.

Is the generated letter legal advice?

No. It is a template that covers the points the Model Rules ask for. Check it against your state's rules and the matter before you send it.

Built by Unison Labs

Engagement letter generator for law firms

Fill in the client, the scope and the fee, and the letter or retainer agreement is written on the right as you type. Copy it, or download it as a PDF or a Word file.

Your engagement

Document

Firm

Firm nameResponsible lawyer

Firm address

Client and matter

Client is

Client name

Date

Client address

Matter

We will...

Not included

Governing state

Fees

Fee basis

Hourly rate ($)

Billing increment

Other rates

Advance deposit ($, blank for none)Payment due (days)

Preview

Harper Lane LLP200 Market Street, Suite 1400San Francisco, CA 94105

[Date]

Northwind Supply, Inc.48 Harbor RoadOakland, CA 94607

Re: Engagement letter, Northwind Supply, Inc. v. Castell Logistics LLC

Dear Northwind Supply, Inc.,

Thank you for choosing Harper Lane LLP. This letter sets out the terms on which we will represent you: who our client is, what we will and will not do, how our fees and expenses are charged, and how either of us can end the engagement. Please read it carefully and ask us about anything that is unclear.

1. Our client

Our client in this matter is Northwind Supply, Inc. only. We do not represent its owners, directors, officers, employees or affiliated companies unless we agree to do so in writing.

2. Scope of the representation

We will represent you in your claim against Castell Logistics LLC for breach of the 2025 warehousing agreement, through trial in the Superior Court of California.

Our engagement does not include any appeal, collection of a judgment, or advice on tax or insurance matters. If you ask us to take on further work, we will confirm the terms in writing before we start.

Dana Whitfield will be responsible for your matter and may be assisted by other lawyers and staff of the Firm.

3. Fees

Our fees are based on the time we spend on your matter. Dana Whitfield's rate is $450 an hour. Other lawyers and staff who work on your matter bill at these rates: associates $275 to $325 an hour, paralegals $150 an hour. We record time in increments of one tenth of an hour (6 minutes). Time includes meetings, calls, correspondence, research, drafting, travel and court appearances.

Any estimate we give you is our best judgment at the time and not a fixed price. We review our rates from time to time and will tell you in writing before a new rate applies to your matter.

4. Expenses

In addition to our fees, you are responsible for the expenses incurred on your behalf, such as court filing fees, service of process, court reporters and transcripts, expert witnesses, investigators, travel, and copying and delivery. We charge them at cost, without a mark-up. We will ask for your approval before incurring any single expense of more than $500.

5. Advance deposit

Before we begin work, you agree to pay an advance deposit of $10,000. We will hold it in our client trust account and apply it to our invoices only as fees are earned and expenses incurred. We may ask you to top it up while the matter continues. Any part not used when the engagement ends will be refunded to you.

6. Invoices and payment

We will send you an invoice each month, showing the work done, who did it, the time spent and the expenses incurred. Payment is due within 30 days of the invoice date. If you have a question about an invoice, please raise it with Dana Whitfield promptly; we would rather resolve it early.

7. Conflicts of interest

We have checked our records for conflicts of interest using the names you gave us and found none that prevents us from acting. If a conflict arises later, we will tell you and deal with it as the rules of professional conduct require.

8. Your responsibilities

You agree to give us complete and accurate information, to tell us promptly of any change that affects the matter, to cooperate with us and respond to our requests in good time, and to pay our invoices when due.

9. No guarantee of outcome

We will give you our professional judgment on the matter and its likely outcome, but we cannot promise any particular result. Nothing we say about the outcome is a guarantee.

10. Ending the engagement

You may end our engagement at any time by telling us in writing. We may withdraw where the rules of professional conduct allow it, including when invoices are not paid, after giving you reasonable notice. If a court must approve our withdrawal, we will ask for its permission and keep acting until it is given. When the engagement ends, you will pay the fees earned and the expenses incurred up to that date, and we will refund any unearned part of an advance payment. Unless it ends earlier, our engagement ends when we send you our final invoice for this matter.

11. Your file

Your file belongs to you, and you may ask for it at any time. When the matter ends, we will keep the file for seven years and may then destroy it without further notice to you.

12. Governing law

This letter is governed by the law of California and the rules of professional conduct that apply to lawyers there.

If these terms are acceptable, please sign and return a copy of this letter with the advance deposit. If you ask us to go ahead before signing, these terms will apply to the work we do. We look forward to working with you.

Sincerely,Dana WhitfieldHarper Lane LLP

Agreed and accepted by the clientNorthwind Supply, Inc.Date:

A template to check and adapt, not legal advice. It covers what ABA Model Rule 1.5(b) asks you to communicate (scope, the basis or rate of the fee, and the expenses the client pays). Your state's version of the rules may require more.

What an engagement letter has to say

ABA Model Rule 1.5(b) asks for three things to be communicated to the client, preferably in writing, before or soon after the work starts: the scope of the representation, the basis or rate of the fee, and the expenses the client will pay. Any later change to the fee or expenses has to be communicated too.

Several states go further. California requires a written fee agreement when fees and costs are expected to exceed $1,000 (Business and Professions Code section 6148). New York requires a letter of engagement unless the fee is expected to be under $3,000 (22 NYCRR Part 1215). Without one, a firm can find its fee limited to what a court thinks reasonable.

The letter is also what both sides go back to in a dispute. A scope that names what is excluded, such as an appeal or collection of a judgment, settles most arguments about whether a piece of work was covered.

Retainer agreements and advance deposits

A retainer agreement carries the same terms as a letter, set out as a contract that both sides sign. "Retainer" also means the deposit a client pays up front. That money is still the client's until it is earned: Rule 1.15 requires it to be held in a client trust account and withdrawn only as fees are earned and expenses incurred.

When the engagement ends, Rule 1.16(d) requires any unearned part to be refunded. On a $10,000 deposit with $7,400 billed, $2,600 goes back to the client. Calling the deposit non-refundable does not change that in most states, and an ethics complaint over a kept retainer is a common one.

Contingency fee agreements

Rule 1.5(c) requires a contingent fee agreement in writing, signed by the client. It must state the percentage on settlement, trial and appeal, the expenses deducted from the recovery, whether they are deducted before or after the fee is calculated, and the expenses the client owes even if nothing is recovered.

The order matters. On a $300,000 settlement with $15,000 of expenses and a 33% fee, deducting expenses first gives a fee of $94,050 and leaves the client $190,950. Taking the fee first gives $99,000 and leaves the client $186,000. At the end, the client gets a written statement showing the split.

Rule 1.5(d) bars contingent fees in criminal cases and, in domestic relations matters, fees contingent on a divorce or on the amount of support or a property settlement.

Rates and the billing increment

State each rate and the increment you bill in. In tenths of an hour, a two-minute email bills as 0.1, which is $45 at $450 an hour; a day of such emails adds up, and clients notice. The billing increment chart shows what any amount of time bills as.

Rates change, usually once a year. Because Rule 1.5(b) requires a change in the basis or rate to be communicated, say in the letter that you will give written notice first, and then do it. The invoices should then match the terms: the legal invoice template bills time in tenths at the rates you set here, and Sixminute records the time those terms are billed against.

Client care letters and ending an engagement

Solicitors in England and Wales work under the SRA rules rather than the Model Rules: the client care letter generator covers costs information, complaints and the Legal Ombudsman. When a matter ends, or you withdraw, the disengagement letter generator puts the end of the representation in writing.