What is an Engagement Letter Review?
An engagement letter is a formal document that explains terms between a client and service provider to formalize their working relationship. Although it should be shorter and quicker to read than a formal contract, it must provide clarity regarding the parties’ roles and expectations.
When an engagement letter has been drafted, you should review it for clarity and to ensure you prevent disputes between parties.
Here are the key terms to pay attention to in an engagement letter, how to review it closely, and when to consult a lawyer for help with the review process.
What Key Terms Should You Review in an Engagement Letter?
There are some common terms that appear in an engagement letter, so make sure you review them.
- Services scope. This outlines the services the provider will deliver to the client. Check that they’re specific and detailed.
- Duties. Both parties’ responsibilities must be included to ensure accountability.
- Confidentiality. To protect sensitive information shared between parties, the document must specify how it will be safeguarded.
- Limitations and liability. Make sure that this section defines the service provider's liability for potential losses or damages.
- Timelines. Check that deliverable dates and final deadlines are included and reasonable for the service provider to achieve.
- Compensation. You should specify the fee structure and all payment terms, such as late payment changes or expenses.
- Termination. When studying the termination clause, check how incomplete work is handled should the contract end early.
How Should You Review in an Engagement Letter?
When reviewing an engagement letter, make sure you look for specific things to protect your interests and prevent challenges in your working relationship.
Check for What Won’t be Provided
While your engagement letter might include details about what services will be provided, which is good, it’s essential to include what won’t be provided. This prevents conflicting expectations that can result in future disputes.
Include Client Duties
If the client’s obligations aren’t outlined in the document, you should add them. It’s up to the client to provide information that’s accurate so that the provider, such as an accountant or a lawyer, will be able to do their job well.
Discuss Terms with the Other Party
Go over every term with the other party so that you’re both happy with the document before it's finalized. This is also a good time in which to share any queries you might have.
Guard Against Scope Creep
Scope creep is when additional work is conducted that isn’t in the agreement. You can prevent it from happening by establishing a clear list of deliverables and including clarity about how fees will change if the work scope changes. Putting both of these in the engagement letter ensures that all additional work is fair and compensated.
Mention Communication Guidelines
You want to ensure that the engagement letter details how regularly the service provider will communicate with the client. Explain exactly how clients will receive updates on the work being completed and on what channels clients can reach service providers, such as via email or phone.
Review Your Engagement Letter Regularly
It’s worth reviewing your engagement letter whenever new services are required. This is a good time in which to check that terms are still relevant and it prevents you from missing information that could result in disputes.
Should You Hire a Lawyer to Review an Engagement Letter?
You should hire a lawyer to review your engagement letter if it is filled with complex obligations or it’s written in a vague way that makes it challenging to understand. A lawyer can help you in various ways during the review process, such as:
- Explaining the services scope to confirm exactly what the service provider is committing to provide.
- Analyzing the fee structure, such as hourly rates and retainers, to include provisions that protect your financial interests.
- Checking both parties’ duties. A lawyer will identify these responsibilities so that they’re tailored to the specific working relationship.
- Considering liability provisions, such as indemnification clauses, that minimize your risks.
- Looking for any unfair terms that they can negotiate with the other party on your behalf. This makes the engagement letter fair and balanced.
- Checking all confidentiality terms to protect your personal or business data.
Where to Find a Lawyer for an Engagement Letter Review
If you need to hire a lawyer to review your engagement letter, you’ll know that finding a reputable lawyer can be challenging at times. On online legal platforms, you can access a network of qualified lawyers who are experienced to help you.
ContractsCounsel is one of the largest online legal marketplaces that enables you to connect with a curated network of vetted lawyers from the comfort of your home.
You can easily ask a lawyer on the platform to review your engagement by following these steps:
- Go to the ContractsCounsel marketplace.
- Post your project for free. Try to mention additional info about the project to help you find the most suitable lawyer, such as any specific sections in the engagement letter you’d like to review.
- Wait for bids. Instead of having to search for the right lawyer, you’ll receive multiple bids from lawyers directly on the platform.
- Review the lawyers’ profiles. Go through the platform’s lawyer data, such as their location, client ratings for previous projects, expertise, and credentials.
- Connect with a lawyer you think is best suited to your requirements and hire them to review your engagement letter for a flat fee. Alternatively, they can draft an engagement letter for you from scratch.
