Sample form Engagement Letter
(For Joint Representation in a Litigation Matter)
[Date]
[Client’s name and address]
Dear
:
As previously discussed, I am writing this letter to set forth the proposed terms
under which XXX (the “Firm”) will jointly represent you and ► (“►“) in defense of the
lawsuit filed by ► (the “Litigation”). This letter to you, along with a letter [letters] of
even date to ►, will confirm the terms of the joint representation, detail the effect of that
joint representation, and request signatures confirming that both you and ► consent to
the joint representation. You and ► are sometimes referred to in this letter collectively
as the “Joint Clients” and individually as a “Joint Client.”
Additional proposed terms and conditions of our representation of the Joint
Clients are set forth on the enclosed “General Provisions Relating to Relationships with
Clients” (the “General Provisions”). If you have any questions about any of the
provisions in this letter and the General Provisions, or if you would like to discuss
possible modifications, please call me.
1.
Identity of Client; Scope of Representation. The Firm’s clients, for
purposes of this representation, will be the Joint Clients, and not any of their respective
incorporators, promoters, organizers, shareholders, partners, members, directors, officers,
employees, subsidiaries, parents, other affiliates, insureds, insurers, family members or
other related interests. [This means that we will not have a conflict of interest if we
represent other clients in matters in which they are adverse to any of the parties
having any of the specified relationships with any of the Joint Clients.]
The Joint Clients have engaged the Firm to advise and represent them in defense
of the Litigation. This letter does not apply to our representation of you in any other
matters, which may be the subject of a separate engagement letter or letters. The General
Provisions, however, apply to our representation of all clients in all matters, except as
provided therein or in any separate engagement letter or other agreement between the
client and the Firm.
[First Alternate Section 2: Include only in letters to Joint Clients who are not
responsible for payment of our fees.]
2.
Fees and Expenses. Although the Firm will be representing the Joint
Clients, ► has agreed to pay our fees, and to pay or reimburse our costs and expenses, in
connection with the Litigation. Under applicable rules of professional conduct (the
“Rules”), we may not accept compensation for representing a client from a person other
than the client unless the client consents after consultation, there is no interference with
our independence of professional judgment or with the lawyer-client relationship, and the
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confidentiality of information relating to representation of the client is protected as
required by the Rules.
In the present circumstances, the principal risk to your interests created by the
arrangement for our fees to be paid by ► is that our professional judgment might be
influenced by consideration of ►’s interests; however, because we believe that the
interests of you and ► are closely aligned with respect to the Litigation, we do not
believe that there will be any interference with our independence of professional
judgment or the lawyer-client relationship between us and the Joint Clients, or that our
representation of the Joint Clients will otherwise be adversely affected by the
arrangement for payment of our fees by ►.
We understand that, based on the foregoing, you consent to the payment by ► of
our fees, costs and expenses in connection with the Litigation. Your signature on the
enclosed copy of this letter will confirm this consent.
[Second Alternate Section 2: Include only in letters to Joint Clients who are
responsible for payment of our fees and do not have insurance coverage for those
fees.]
2.
Fees and Expenses. Our fees will be based on the amount of time spent by
our lawyers and paralegals on behalf of the Joint Clients. Each lawyer and paralegal in
the Firm has a standard hourly billing rate, and the applicable rate times the number of
hours spent by each lawyer or paralegal, measured in tenths of an hour, will determine
our fees. Our standard billing rates currently range from $XXX to $XXX per hour for
lawyers and $XXX to $XXX per hour for paralegals.
In addition to our fees, we will be entitled to payment or reimbursement for costs
and expenses as set forth in the General Provisions.
You and the other Joint Clients [, except ►,] will be jointly and severally liable
for payment when due of all our fees for services and costs and expenses in connection
with the Litigation. We will send our statements for fees and expenses to ►. If you have
any questions or concerns about any of our statements for fees and expenses, please call
me promptly so that we can discuss your questions or concerns and I can respond
appropriately.
[Third Alternate Section 2: Fixed Fees. If this alternative is selected, a very precise
description of the scope of the representation is essential.]
2.
Fees and Expenses. Our fee for this matter will be ►.
[Note: The approval of the Firm’s CEO is required for any fixed fee arrangement or
any other fee arrangement that may result in realization below minimum rates.]
In addition to our fees, we will be entitled to payment or reimbursement for costs
and expenses as set forth in the General Provisions.
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You and the other Joint Clients [, except ►,] will be jointly and severally liable
for payment when due of all our fees for services and costs and expenses in connection
with the Litigation. We will send our statements for fees and expenses to ►. If you have
any questions or concerns about any of our statements for fees and expenses, please call
me promptly so that we can discuss your questions or concerns and I can respond
appropriately.
[Fourth Alternate Section 2: Include if our fees are to be paid by an insurer.]
2.
Fees and Expenses. We understand that ____________________ (the
“Insurer”) will be paying our fees and expenses. [You will be responsible for payment
to the extent the Insurer does not pay, however. [Note: If this optional sentence is
included, the usual information about hourly rates and expenses (i.e., the text of the
above “Second Alternate Section 2”) should be included as well.]]
Under the Rules of Professional Conduct to which lawyers in the Firm are subject
(the “Rules”), we are prohibited from accepting compensation for representing a client
from anyone other than the client unless certain requirements are met. The first
requirement is that the client give informed consent. We understand that the Joint
Clients, who are our sole clients in this matter, consent to payment of our fees and
expenses by the Insurer. Your signature on the enclosed copy of this letter will confirm
your consent.
The second requirement is that there be no interference with the lawyer’s
independence of professional judgment or with the client-lawyer relationship. We will
not allow any such interference.
The third requirement is that information relating to our representation of the Joint
Clients must be protected as required by the Rules. We will ensure that such information
is so protected, as we do in connection with all clients’ matters, but we understand that
the Joint Clients consent to our disclosure to the Insurer of information to which it may
be entitled under the relevant insurance policy or otherwise by virtue of its position as
insurer, subject to the further understanding that it will maintain the confidentiality of all
such information.
[Include in All Letters.]
3.
Staffing. Although ►I/name of lawyer to be primarily responsible ►
will be primarily responsible for this engagement, various portions of the work may be
delegated to other members of the Firm, associate, staff, and of counsel lawyers, and
paralegals, as the Firm deems appropriate in the circumstances. [Include one or the
other of the following sentences unless the Fixed Fee Alternative has been selected:
The current standard hourly billing rate for [my time/the time of ___________ is
$______ per hour./The names and current standard hourly billing rates of the
lawyers we expect will work on this matter are listed on the attached Schedule A.]
4.
Professional Responsibility Issues.
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(a)
Applicable Rules. Under the Rules [Substitute if Second or
Third Alternate Section 2 has been selected: applicable rules of professional conduct
(the “Rules”)], a lawyer may not represent more than one client in the same or related
matters unless the lawyer reasonably believes that he or she will be able to provide
competent and diligent representation to each affected client. In addition, the clients
must each give informed consent, confirmed in writing, to the joint representation. To be
“informed,” each client’s consent must be preceded by the lawyer’s communication of
adequate information and explanation about the material risks of and reasonably available
alternatives to the joint representation. If at any time during the representation the
lawyer’s belief changes or any of the clients so requests, the lawyer must withdraw from
the representation.
(b)
Relevant Considerations. One important aspect of a joint
representation is its effect on the attorney-client privilege and the confidentiality of
information related to the representation. In general, a lawyer is required to keep each
client informed of the proceedings and the subject matter of the representation so that
each client can make informed decisions. At the same time, lawyers are also required to
not disclose client confidences. However, when a lawyer represents multiple clients in a
single matter or in related matters, the lawyer cannot simultaneously reveal important
information to one client that was obtained from another client and still keep the
information confidential.
Accordingly, for us to enter into this joint representation, there must be a clear
understanding with both [all] of the Joint Clients that otherwise confidential information
of either one of them, relevant to the Litigation, will be disclosed by the Firm to the other
[others]. If either [any] Joint Client decides that some information material to the joint
representation should be kept from the other[s], we will be forced to withdraw from the
joint representation.
Neither Joint Client should have any expectation that any information it discloses
to us that is relevant to the Litigation will be kept confidential from the other Joint
Client[s]. This will continue to be the case even if a controversy arises between [among]
the Joint Clients. This does not mean that anyone else (i.e., any other client or a nonclient) can gain access to such communications. Indeed, the privilege protecting the
confidentiality of such communications would remain fully intact vis-a-vis third parties.
Moreover, neither [none] of the Joint Clients would be able to waive that privilege
without the other’s [others’] consent.
The second risk which necessarily arises out of any joint representation is the
possibility that a conflict of interest may one day surface between [among] the joint
clients. Although we presently are unaware of any facts which might give rise to such a
conflict in the present matter, such a possibility always exists, at least theoretically. If
such a conflict should arise, the Firm would need to withdraw from the joint
representation and, although we would hope to be able to continue our representation of
you in the Litigation [and _______________ has prospectively consented to our doing
so], it is possible that we would conclude that the Rules did not permit such continued
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representation. If we reached that conclusion, you would be required to engage new
counsel in mid-stream and to absorb any related additional expense.
The third consideration regarding a joint representation involves an assessment of
various litigation factors. For example, during the course of the Litigation, there may be
an opportunity to settle on behalf of one Joint Client, while the other Joint Client[s] is
[are] not in a position to achieve a satisfactory settlement. We must be free to negotiate
separate settlements if either [any] Joint Client so desires. The Joint Clients also should
be aware that a disagreement between [among] them regarding settlement of the
Litigation may prevent either [any] of them from settling.
There are certain tactical advantages and disadvantages to joint representation. It
may be advantageous to have separate opening statements, separate closing arguments,
and separate cross-examination of witnesses at trial. These factors may favor separate
representation.
On the other hand, there are factors which favor joint representation. First, there
will be a substantial savings in legal fees and expenses. Second, a united front during
discovery and trial can be psychologically effective. Separate representation could
suggest to a jury that there was some difference or even antagonism between the
separately represented parties. Obviously, this could be counter-productive. Third,
although separate attorneys might obtain some advantage at trial, there is also some
detriment. For example, the total time available for opening and closing statements is
usually limited by the Court and would have to be allocated among all defense attorneys
and could result in insufficient time for each attorney to make a full presentation.
(c)
[Include if applicable] Protection of Choice of Counsel. If, during
the pendency of the joint representation, you requested that we represent you in any other
matter in which your interest was adverse to ►’s, the Firm would hope to be able to
represent you in connection with that dispute or other matter despite the conflict of
interest that representation would involve. Accordingly, we are asking ► to agree that
the Firm may represent you in any and all matters now or in the future, regardless of
whether you have an interest in any such matter that is adverse to ►’s interest. We also
are asking ► to waive any and all conflicts of interest inherent in any such representation
of you. Whether ►’s consent and waiver permitted us to represent you in a matter in
which ► was adversely interested would depend on all the facts and circumstances,
however, and we might conclude that the Rules did not permit us to represent you, in
which event you would need to retain other counsel in the new matter.
[Include in all letters] (c)/(d)]
Conclusion. Based upon the investigation
we have conducted thus far with respect to the Litigation and our understanding of the
issues presented by the Litigation, it is our belief that joint representation will not
adversely affect our representation of either [any] of the Joint Clients. The principal
factor favoring joint representation in the present circumstances is [that a united front in
defending the Litigation may be more effective than if each Joint Client were
separately represented/ the likely cost savings].
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However, each of the Joint Clients must consent to our joint representation in
order for that representation to proceed. Should you have any questions or comments
about the proposed joint representation, you should feel free to call me. I also encourage
you to discuss any questions regarding this joint representation and the waiver of
potential conflicts with any lawyer of your choice.
If, after consideration, you agree to joint representation under the terms of this
letter, you should sign in the space provided on the enclosed copy of this letter and return
the copy to me. We are requesting a similar agreement from the other Joint Client[s], and
our ability to represent you is dependent upon our receipt of its [their] agreement.
[Optional (but inclusion is encouraged unless you believe the risk of a material
adverse effect on our relationship with the client outweighs the likely benefit of a
waiver of future conflicts)--Waiver of Future Conflicts]
5.
Conflicts of Interest. The Firm represents many other clients, and some of
our present and future clients may have disputes, transactions or other business with you
during the time that we are representing you. Except as may be otherwise provided in
Section 4, above, however, the Firm will be precluded from (i) representing, in any
matter that is the same as or substantially related to any matter in connection with which
we have represented or are representing you, any other client whose interest in such
matter is directly or materially adverse to your interest; or (ii) using any information
relating to our representation of you to your disadvantage, except as permitted by
applicable rules of professional conduct. Except as provided in the preceding sentence,
the Firm will have the right to continue to represent or to undertake to represent existing
or new clients in matters in which the interests of such clients are adverse to your
interests, including litigation, transactional and other matters in which you are a party or
are otherwise interested.
Without limiting the generality of the foregoing, [Include if the client is a bank:
we will have the right to represent present and future clients in connection with the
negotiation and documentation of loans from you and other transactions in the
ordinary course of your business,] we will have the right to represent debtors or other
creditors in bankruptcy, workout and other debtor-creditor matters in which you are a
creditor, and we will have the right to represent other clients who are defendants or
potentially responsible parties or are otherwise interested in federal and state Superfund
and other environmental matters (including but not limited to litigation, administrative
proceedings, alternative dispute resolution proceedings and private negotiations) in which
you also are a defendant or potentially responsible party or otherwise have interests
actually or potentially adverse to those of our other client.
Parties who are adverse to you in matters in which we represent you may, from
time to time, seek to retain us to represent them in unrelated matters. We will have the
right to represent any such party so long as the matter in which we represent it is not
substantially related to any matter in which we represent you and we believe that the
representation of such party will not adversely affect our relationship with you.
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Your signature on the enclosed copy of this letter will constitute your consent to
any and all representations permitted by the terms of this Section 5 and waiver of any
conflicts of interest inherent in any such representations. You should know that, in
engagement letters with many of our other clients, we have requested similar consents in
order to preserve our ability to represent you.
[If, notwithstanding your consent, the Firm concludes that it cannot or
should not continue to represent you while also representing another client in one or
more matters in which it is adverse to you or any of your affiliates, insureds or
insurers, the Firm will have the right to withdraw immediately from its
representation of you. You acknowledge that the Firm’s withdrawal in such
circumstances will not breach any duty of loyalty or other duty of the Firm to you.
If the Firm exercises its right to withdraw, you immediately will become a “former
client” of the Firm for purposes of applicable rules of professional conduct.]
[Alternate Section 5: If you do not choose to include Optional Section 5, you
must include the following, at least in the first draft presented to the client.]
5.
Representation of Other Clients. Your signature on the enclosed copy of
this letter will constitute your consent to the Firm representing [Include if the client is a
bank: other clients in connection with the negotiation and documentation of loans
from you and other transactions in the ordinary course of your business,] debtors or
other creditors in bankruptcy, workout and other debtor-creditor matters in which you are
a creditor and other clients who are defendants or potentially responsible parties or are
otherwise interested in federal and state Superfund and other environmental matters
(including but not limited to litigation, administrative proceedings, alternative dispute
resolution proceedings and private negotiations) in which you also are a defendant or
potentially responsible party or otherwise have interests actually or potentially adverse to
those of our other client, except that this consent will not apply to any representation of
another client in a matter that is the same as or substantially related to a matter in which
we have represented or are representing you. This consent applies with respect to both
present and future clients of the Firm.
[Optional—Retainer to be Applied to Fees]
6.
►Retainer. This will acknowledge receipt of a check for $► as an
advance against statements to be rendered for fees and expenses in connection with our
representation. Such advance will be deposited in our general trust account and we will
charge our fees and expenses against the advance and credit them on our billing
statements. In the event our fees exceed the advance deposited with us, we will bill you
for the excess. Any unused portion of the advance will be refundable at the conclusion of
our representation. We will have the right to request additional advances from time to
time based on our estimates of future work to be undertaken, and you will promptly pay
any additional advance requested.
[Alternate—Security for Fees and Costs]
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►6. Retainer. This will acknowledge receipt of a check for $► as security for
our fees for services and costs and expenses incurred in connection with our
representation. This amount will be held in our general trust account and may be applied
by us to any amount that is billed and not timely paid. If it appears, at any time during
the course of our representation, that our future fees and expenses will exceed $►, we
will have the right to request a further deposit and you will promptly pay the amount
requested.
[Alternate—Advance for Expenses]
►6. Advance for Expenses. This will acknowledge receipt of a check in the
amount of $► as an advance against expenses. We will have the right to apply the
advance to expenses as incurred without any further authorization from you.
]Include in All Letters]
We are pleased to have this opportunity to be of service and to work with you.
Very truly yours,
XXX
By:
[Name of Signing Lawyer]
AGREED TO AND ACCEPTED:
____________________________________
Date:____________________________
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