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The Art of Getting Paid

3 Examples of Retainer Letters That Can Help Document Fee Estimates

Retainer letters need not include every little detail, but they should describe key factors that can affect fees.

By Frederick Hertz  |  October 7, 2015

Once you have completed your evaluation of the likely fees and discussed it with your client, it’s time to send out the retainer letter. I used to dread this routine task, but I now realize that it’s an essential part of the retention process and it’s an opportunity for me to further refine my description of the work to be done. You should take the time to customize your standard letter for each client, and if your assistant prepares the letter, it’s important that you take the time to review it and include the specific details for this particular client. Clients actually read these letters—something I learn whenever I am told there’s a mistake in a letter I’ve written.

Remember, the purpose of the retainer letter is to confirm the basic terms of the agreement, which should be worked out in a conversation with the client if at all possible. Occasionally I send out the letters before our first meeting, if the issue of retention is particularly sensitive, such as in a divorce representation. My preference, however, is to wait until after the first meeting before sending out the letter. That way I can be more specific about the nature of the task, and include particular details that are pertinent to the client’s situation. I can also be much more realistic in estimating the fees when I know a bit more about the situation.

Sample Retainer Letters

I try to keep my letters simple, while still covering the essential points. Here are a few examples of what to include in different types of retainer letters.

How I describe the work I do for a premarital agreement:

Art: Documenting the Estimate in the Fee Agreement

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This letter will confirm our agreement regarding the services you have requested that I provide to you regarding this matter. As we discussed in our conversation, I will only be representing you, and not your fiancée, who will consult with her own independent counsel. At this point we expect that my work will involve advising and representing you in all issues involving this matter, including the review of a premarital agreement.

How I described the tasks for a client who hired me as his consulting lawyer for his partnership dissolution:

This letter will confirm our agreement regarding the services you have requested that I provide to you regarding this matter.  At this point we expect that my work will involve advising and representing you regarding the various property and asset issues, advocating on your behalf, possibly attending a negotiation meeting (with or without your partner) with his advisor or attorney, helping you with the settlement documents to dissolve your relationship, and drafting one or more interim and/or final agreements.

How I typically describe the uncertainty of the fees that will be incurred:

Because it is uncertain at this time exactly how the various issues will be resolved or how complicated the agreement process will be, I have not given you any firm estimate of total fees and costs.  Moreover, should I give you any estimates, those estimates should not be viewed as a firm guarantee of what the fees will be in total, since the nature of any matter depends on the needs and actions of the parties and the services you request of me. If at any time it appears that the total fees and costs will be significantly higher than anticipated at any time, I will contact you and obtain your approval before proceeding with additional work.

When it comes to describing the key factors that can affect fees, it’s important to point out the major ones in the retainer letter. If it’s a contingency fee arrangement, those details need to be clearly spelled out—especially as to how the fee is calculated and how costs are allocated.  The best way to test the adequacy of your letter is to imagine being on the stand in a fee arbitration where the client asserts that they weren’t told what they were being charged.  You don’t need to include every little detail, but you want to be able to point to the basic provisions to show that indeed, the client agreed to pay you the fees you are seeking to collect.

Isn’t that what you would advise your clients to do in their business transactions?

Frederick Hertz, an attorney and mediator based in Oakland, has managed his practice for more than 25 years.
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