Simply put, an engagement letter is a contract between you and your client. Each new client or project, big or small, should start with a letter that is signed by both parties. These letters can be used as binding contracts in the event of fee disputes, collection issues and more. Overall, this documentation delivers peace of mind and security to both parties.
Why send an engagement letter?
First and foremost, this letter sets expectations for both parties. Your client will know exactly what to expect from you, as well as what is expected of them. This can help prevent misunderstandings or even lawsuits down the road.
In the rare event of a dispute between you and your client, the legally binding engagement letter can serve as the go-to document for resolution.
What to include:
Though each engagement letter will be different, always include these sections:
- Purpose of letter
- Scope of work
- Fees and billing
- Collection issue / disputes
- Client responsibilities
Always review and update your practice’s letter for each new client and project. A well-drafted letter can give your firm peace of mind in the event of a client dispute.
At Lockton Professional, you can download a complimentary engagement letter example. Lockton Professional also offers additional risk management tools along with the coverage you need to protect your business and career.
Coverage may not be available in all states and is subject to actual policy terms and conditions. Coverage may be provided by an excess/surplus lines insurer which is not licensed by or subject to the supervision of the insurance department of your state of residence. Policy coverage forms and rates may not be subject to regulation by the insurance department of your state of residence. Excess/surplus lines insurers do not generally participate in state guaranty funds and therefore insureds are not protected by such funds in the event of the insurer’s insolvency.