Top 10 Financial Errors: #6 Think You Don’t Need a Fee Agreement With Each Client.

Louis Agassiz stated: “I cannot afford to waste my time making money.” 

The way some lawyers carry on, you think they had taken Louis’ quote to heart. But when it comes to taking time to get a signed fee agreement, we think that this is time well spent.  It is a huge financial mistake to not record in writing the very nature of the contractual relationship with each and every one of your clients.

Of course it’s important to communicate in writing with every client during, or immediately after, the initial consultation to define your professional relationship. Clearly defining whether or not you are acting on behalf of the client will help avoid any misunderstandings about the timing, scope and cost of your legal representation. Misunderstandings about the lawyer-client relationship often lead to the souring of the relationship—and to costly collection and malpractice suits.

A well-written fee agreement encompasses more than your hourly, flat or contingent fee. It should define the parameters of the work to be completed and address your obligations to the client and the client’s obligations to you. It should also address your rights (for example, to seek withdrawal) and your client’s rights (for example, to terminate representation).

Be clear in the language you choose. Avoid legalese. Remember, because you are the person drafting this document, it is possible that any error or ambiguity may be resolved against you if a fee dispute arises later. Also, be sure to consult your jurisdiction’s ethics rules regarding fee agreements to ensure that you are totally on-side.  They may even have precedent agreements for you to use in your practice.

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