Rule 1.16, Refusal or Termination of Representation, describes the circumstances in which you may withdraw from a client`s representation. Your contract must inform the customer that you have the right to withdraw, subject to judicial approval, if any, as well as the reasons and procedure for such withdrawal. Clarity of a contract`s fee terms is essential because many malpractice claims only arise when the company tries to collect unpaid fees. In addition to determining how the company`s fees are calculated, the mandate letter may include a provision for the payment of an advance payment, instalment payments or the payment of a so-called “evergreen” advance, which serves as a kind of deposit. If you choose not to require advance payment, you must at least reserve the right to condition future services after receiving a deposit or prepayment. • Will the client pay the fees directly or will the law firm pay them and ask the client for a refund? You may also want to consider adding provisions to your letter of commitment to determine when the representation is considered complete (“Unless previously terminated, my firm`s representation will end when my firm sends you a final invoice for services in this matter”) and establish your company`s record-keeping policies. Establishing an endpoint for representation helps determine two things: (1) when the limitation period begins to run; and (2) when Customer becomes a former Customer for conflict analysis purposes. From a risk management perspective, the most important provision of the mandate letter is the first requirement: the definition of the scope of representation. You must use the contractual agreement to specify exactly what tasks your company will perform for the customer, and each contractual agreement must include a description specifically tailored to the customer`s new business. And if you`re taking on a new case for an existing client, you also need to describe in one form or another in writing – an email message is enough – the scope of the new case. If the lawyer`s client agreement simply states that the scope of representation is to represent the client in connection with the acquisition of the target company, the client will no doubt argue (and perhaps even convince himself) that the lawyer has been tasked with providing a range of services, including due diligence and analysis and advice on the merits of the potential acquisition.

It will be the lawyer`s word against the client`s word, which usually doesn`t go well for the lawyer. If, on the other hand, the lawyer has defined the scope of the assignment in such a way that he documents the transaction negotiated by the client himself and, in particular, excludes the performance of due diligence or other advice to the client on the substance of the potential acquisition, the client cannot put forward this argument. Defining what is within the scope of the mission – and what is not – could be a major headache for the lawyer. For the purposes of this rule, when a business (c.B. an insurance company) hires a lawyer to represent a third party, the term “client” refers to the company that hires the lawyer. In the event of a significant change in the scope of services or fees to be charged, the customer will receive an updated letter of commitment. Scope of legal representation. Another purpose of a written mandate letter is to document the scope of the lawyer`s commitment. In the context of litigation, it is often clear what the scope of the lawyer`s duties is – to pursue or defend a lawsuit by settlement, judgment or dismissal. In other contexts, however, the scope may not be apparent.

Suppose a customer negotiates a transaction in which they buy another business. The client then hires the lawyer to document the transaction, including any agreement with a credit source. Two years later, the acquired company turns out to be bankrupt, and the client turns to the lawyer and accuses her of not having done sufficient due diligence for the acquired company. However, counsel was not engaged to perform due diligence or otherwise analyze the value of the acquisition target. Another thing to watch out for is the fee structure. Common options include hourly payments, an advance, a “standing” advance, a fixed fee, and a success model.3 Depending on your needs as a customer, different fee agreements must be agreed. For example, a fixed (or flat-rate) fee for the production of limited short-term services (e.B. Creation of a simple contract, etc.) makes more sense, while a success or hourly costs may be more appropriate if the parties are not able to predict the time spent (p.B dispute, etc.). 4 For detailed drafting of law firm billing structures, read our blog post. (a) From 4 March 2002, a lawyer who undertakes to represent a client and concludes a contract on behalf of a client, invoices or collects fees from a client must provide the client with a written letter of assignment before the commencement of the representation or within a reasonable time thereafter: if the clients do not return an order contract, this can lead to problems and potential confusion about it, if you are really their lawyer. To combat this, when you send the order contract to the customer for signature instead of having it signed while he is in your office, you must explicitly state that the provisions it contains (including fees) are only valid if the agreement is signed within a certain period, and specify that if the agreement (and the anticipated fees) have not been received within this period, You are not obliged to represent the client. .