The following is sample language that may be considered in drafting a fee agreement addressing many issues. There can be no “one size fits all” model fee agreement. Accordingly, the provisions listed here will need to be modified, amplified or omitted as appropriate. The language does, however, provide some guidance as to how some issues may be addressed in trying to effectively deal with a client when drafting a fee agreement.   Do you need a trust account?

CONFIDENTIAL AND PRIVILEGED INFORMATION

DATE

Dear Clients:

I am writing to confirm the terms under which Law Firm, LLC (the “Firm”) proposes to represent [INSERT SPECIFIC CLIENT(S) TO BE REPRESENTED] (the “Clients”) in connection with [INSERT DESCRIPTION OF ENGAGEMENT WITH REASONABLE DETAIL]. We appreciate your decision to retain the Firm in this matter. So that we all clearly understand the basis upon which we have agreed to represent you, I have prepared this letter.

1.       Clients Represented. It is understood that our Clients for the purpose of this representation are [INSERT], and not any of Clients' individual members or any other entities whose interests in this matter are being represented by those individual members.

2.       Staffing. Other Attorney and I will have primary responsibility for the matter. Particularly at the outset, we expect to perform the bulk of the work and I have enclosed a copy of our resumes. We also may utilize other attorneys, paralegals and litigation/clerical assistants where appropriate. Staffing decisions will be made by me, with the objective of rendering services on an efficient and cost-effective basis.

Our representation is effective as of the date we first begin providing services to you as a result of the requested representation. We will undertake your representation and work with you to achieve the desired objectives by using our best judgment and skill in representing you. You understand that we cannot and have not made any guarantee regarding the outcome of the matter.

3.       Fees. [FOR “HOURLY RATE” ENGAGEMENT: We anticipate billing for professional services in accordance with Rule 1.5 of the Rules of Professional Conduct promulgated by the Arizona Supreme Court, primarily based upon the schedule of hourly rates established by the Firm for the lawyers and other members of the professional staff of the Firm. In order to help us determine the value of services that we render, our attorneys, paralegals and document clerks maintain written records of the actual time they spend working for Clients. The hourly rates are based on years of experience, specialization in training and practice and level of professional attainment. We periodically review our hourly rates and make adjustments as necessary. My currently hourly rate is $ [INSERT RATE] and Other Attorney's current hourly rate is $ [INSERT RATE.]
Prohibited Agreements   Non-Refundable Fee   Earned Upon Receipt

[FOR CONTINGENT FEE ENGAGEMENT: Clients have retained the Firm on a contingent-fee basis and agree to pay and assign to the Firm: (1) twenty-five (25) percent of the gross amount recovered by settlement prior to the filing of a complaint; (2) thirty-three and a third (33-1/3) percent of the gross amount recovered by settlement after a complaint is filed but before a trial is commenced; (3) forty (40) percent of the gross amount recovered during or immediately after the first trial, by settlement or otherwise; or (4) forty-five (45) percent of the gross amount recovered if an appeal or further action is taken after the first trial. Any award of attorneys' fees will be included in calculating the gross amount. Except as provided in the next paragraph, attorneys' fees will be payable only out of amounts recovered. If no recovery is obtained, no fees will be payable to the Firm. Clients will, however, remain liable for all costs incurred on their behalf regardless of recovery.

The Firm may waive their right to fees and withdraw as counsel for Clients at any time upon giving reasonable notice. Clients may terminate this agreement at any time before settlement or ultimate recovery upon giving reasonable notice. In the event this agreement is terminated by the Firm before settlement or ultimate recovery, no fees shall be payable to the Firm, but Clients shall remain responsible for payment of all costs advanced by the Firm. In the event this agreement is terminated by Clients before settlement or ultimate recovery, Clients agree to pay the Firm their fees at the hourly rates customarily charged by the Firm for all time reasonably spent by the Firm on Clients' behalf before Clients' termination of this agreement, plus any costs advanced.]

4.       Costs. In addition to our fees for services, Clients will be responsible for all out-of-pocket disbursements that we incur on their behalf. Typical of such costs are travel expenses, long-distance telephone calls, outgoing fax (at INSERT RATE per page), Federal Express, courier services, and delivery charges, photocopying (at INSERT RATE per page), and online database retrieval charges (Lexis, Westlaw, etc.). We anticipate making advances to cover out-of-pocket costs incurred but reserve the right to forward to Clients any larger items with the request that they pay them directly to the service providers.

5.       Billings. Our statements for services rendered and costs incurred will be prepared and mailed to the address listed above during the month following the month in which services are rendered and costs advanced. We will make every effort to include our out-of-pocket disbursements in the next monthly statement. However, some disbursements are not immediately available to us and, as a result, may not appear on a statement until sometime after the charges were actually incurred. All statements are due and payable upon receipt and considered past due thirty (30) days after the statement date. The Firm reserves the right to decline to perform further services if any account is sixty (60) days or more past due. Subject, of course, to our ethical and professional obligations, Clients must agree that the Firm may terminate its legal services and withdraw from this engagement in such event.

6.       [Advance Fee. It is our policy to ask clients without an established payment history with the Firm to provide us an advance fee before commencing work. We believe that it is appropriate here, and an advance fee of $[INSERT AMOUNT] is requested. Except as provided herein, the advance fee amount will be held by us in a trust account until our representation is concluded. If any monthly statement is not paid before coming past due, we will have the right, in our discretion, to apply the amount being held in trust to Clients' outstanding balance. Should that become necessary, Clients will still be responsible for any remaining balance, and we will have the right to withdraw from further representation if it remains unpaid. If we use the advance fee to pay an outstanding statement, we reserve the right to notify Clients that we have done so, whereupon Clients will then promptly replenish the advance fee so that at all times there is $ [INSERT AMOUNT] on deposit. If the advance fee is not replenished within [INSERT] days, we reserve the right to terminate our representation.]
Retainer   Flat Fee

7.       [Obligations As Local Counsel. We recognize that our role in this matter is to serve as local counsel for Out-of-State Firm, which will have principal responsibility for the litigation. We also understand you wish to avoid the undue expense that would be incurred in having two firms duplicate their efforts in this matter. However, even as local counsel, we are required by the applicable rules to exercise a continuing responsibility to conduct a reasonable inquiry to ensure that pleadings and filings are well grounded in fact and law and otherwise meet the applicable standards. Accordingly, although we understand and will seek to accommodate your interest in avoiding duplicate legal fees, our professional obligations compel us to undertake activities and investigation deemed necessary to discharge these obligations.]

8.       [Fee Shifting. The matter for which Clients have retained us is one in which attorneys' fees may be recovered by the prevailing party from the losing party. Although if Clients prevail, we will press a claim asking the Court to award you your fees incurred in this matter, please also understand that, if Clients lose, the other party may attempt to shift their fees to Clients. Moreover, the provisions under which a Court may shift fees generally leave that decision to the discretion of the Court to decide whether, and in what amount, to award fees.]

9.       Settlement. The Firm will not enter into a settlement without Clients' consent.

10.      Clients' Responsibilities. Recognizing that the Firm cannot effectively represent Clients without their cooperation and assistance, Clients agree to cooperate fully with the Firm and to provide promptly all information known or available to Clients relevant to the Firms' representation, including providing information and documents requested in a timely fashion; assisting in discovery, disclosure and trial preparation; cooperating in scheduling and related matters; responding to telephone calls and correspondence in a timely manner; and informing the Firm of changes in Clients' address and telephone numbers.

11.      [Arizona Disclosure Rules. It is important that Clients understand how Arizona's rules of civil procedure may apply to this case. Arizona's rules substantially change the litigation process that Clients may be familiar with from federal court or from other states. The purpose of the rules is to reduce the time and expense involved in civil litigation. The rules encourage early Court involvement in case management, require disclosures by the parties and contain presumptive discovery limits. For example:

There are numerous rules that give the Court the power to impose sanctions on a party or an attorney for failure to comply with these rules.

There are several aspects of the rules that have a direct impact on how we proceed with the case. The rules require Clients and their attorneys to conduct a reasonable inquiry and investigation about all matters to be revealed in the disclosure statement as described in Ariz.R.Civ.P. 26.1. We have the duty to investigate facts that are good and bad for Clients. The failure of Clients or their attorneys to conduct a reasonable inquiry and investigation into these topics, and to disclose all relevant information may subject Clients, their attorneys, or both to sanctions. Furthermore, any evidence favorable to Clients that is not timely disclosed in accordance with Rule 26.1 cannot be used at trial.

I shall assume that you have talked or will talk with someone knowledgeable about all the facts that give rise to Clients' defenses. You or we need to talk with all the people that may have information about the case. You or we need to identify and review all documents that may be relevant to Clients' defenses or to plaintiff's claims.

As you can see, one effect of the rules is to “front-load” a lot of the legal investigation and analysis to be done in this case. Obviously, this will also “front-load” some of Clients' legal expenses. However, please keep in mind that the other side must abide by these same rules, and that a benefit to be derived is that both sides should know relatively early on in the litigation the relative strengths and weaknesses of their cases. The rules were designed precisely for that purpose, to allow both sides to assess the whole case well in advance of trial, and to focus their resources on exchanging information and resolving the dispute rather than waging discovery battles.]

12.      [Joint Representation. The Rules of Professional Conduct, as adopted in Arizona, permits the joint representation of multiple clients where a lawyer can adequately represent the interests of each client and each client knowingly consents to that joint representation. At this point, I believe that we can represent both Clients adequately in this case. Based on the information available to us, there currently appear to be no conflicts of interest among Clients that would prevent us from undertaking their joint representation. However, although the interests of Clients may be similar in many respects, they may not be identical in all respects, and a conflict may develop at some later date. Any time an attorney represents several parties in litigation, certain conflicts of interest may arise among the parties. There are times when strategic decisions differ with respect to different parties. For example, a dispute could arise between Clients as to whether or not to settle and on what terms. If at any time any of the Clients becomes aware of any conflict or potential conflict between their interests and those of other of the Clients, I ask that they immediately call that to my attention so that we can consider whether we can continue to represent any of the Clients in this case.

In the ordinary one-lawyer/one-client relationship, information given to the lawyer by the client in confidence as part of the representation may be considered privileged or confidential information (i.e., the lawyer may not disclose that information to any other person without the client's consent as required by law). That privilege also exists in the context of a joint representation, but there is an added factor. The privilege extends to protect the confidences of the entire group from disclosure to any person who is not a member of the group. However, information that any of the Clients provide us in connection with this joint representation is available to all of the other Clients. There will be no confidences among us regarding the work we do for Clients. In other words, if we receive information from or about one of the Clients that we believe the others should have in order to make decisions regarding the subject of our representation, we will share that information with them or with the whole group.

In order to assure that we represent their interests in a coordinated manner, and so long as no conflict develops between and among the interests of the Clients, we will take our direction from the group as a whole as it reaches its consensus on various issues. If Clients disagree on an issue, we will ask that the members of the group resolve their differences among themselves without our assistance. Although we perceive it to be unlikely, in the event circumstances arise that make it impossible for us to continue to simultaneously represent one of the Clients, we trust that they understand that we might have to withdraw from our representation of all Clients. In the event a dispute does arise between any of the Clients, the Firm may only be able to represent one of the parties in the dispute, and, under certain circumstances, we may be precluded from representing any party to the dispute. Consequently, we must ask that Clients' agreement to our engagement encompass that situation as well.]

13.      [Representation of Other Client. As we have discussed, the Firm has represented and continues to represent Other Client on unrelated matters. Because our ethical duty to all of our clients requires us to avoid acting in a manner that is prejudicial to the interests of any other client, you must understand that we are not permitted to allow our role in this litigation to involve the rendering of advice or other services that appear to us to be prejudicial to the interests of Other Client. Based on the information available to us, we do not think it likely that such a situation will arise, but you must recognize this possible limitation on our ability to represent Clients. Moreover, we must ask that you agree that if such a situation should eventuate, we may refuse to undertake a particular service or may withdraw from our representation of Clients in the matter. At this point, based on the information available to us, we reasonably believe that our representation of Clients will not be materially limited by our responsibilities to Other Client nor anyone else. ]

14.      Advance Waiver of Conflicts. As we have discussed, the Firm represents many other companies and individuals. It is possible, if not probable, that some of our present or future clients could have disputes or transactions with Clients. Therefore, as a condition to our undertaking this matter, Clients must agree that the Firm may continue to represent or may undertake in the future to represent existing or new clients in any matter that is not substantially related to our work for Clients, even if the interests of such entities in those other matters are directly adverse to Clients. We agree, however, that Clients' prospective consent to conflicting representation contained in this paragraph shall not apply in any instances where, as a result of our representation of Clients, we have obtained privileged, proprietary or other confidential information of a nonpublic nature that, if known to such other entity, could be used in any such other matter by such entity to Clients' material disadvantage.

15.      [Spousal Affiliation. As we have discussed, my husband (“Husband”) is an attorney at Other Firm. From the filings to date, we understand that Other Firm represents defendant Other Corporation. It is my understanding that Husband does not now and has never personally represented that entity. Moreover, I will request that Other Firm take precautions to ensure that Husband does not have any participation in the matter. In addition, a wall of silence will be placed between Husband and I to ensure that there is no possibility that privileged or confidential information will be shared with him. My marriage to Husband and his affiliation with Other Firm will not limit or affect in any way our responsibilities to you or adversely affect our representation of you in this litigation.]

16.      Document Retention. During the course of our representation of Clients, they may have occasion to provide us with documents and other materials from their files. At the end of our engagement, we will return the documents and materials to Clients in care of your office, or retain them as Clients direct. If we receive no such direction from Clients, and the documents and materials are not returned to Clients, we would like Clients' agreement that the documents may be destroyed at such time as the file itself is destroyed in accordance with our document retention policy. Currently, it is our policy to destroy files after they have been closed for ten (10) years. We will deem Clients' acknowledgement of our engagement as an assent to the handling of Clients' documents in this respect.

17.      Termination of Engagement and Post-Engagement Matters. Either of us may terminate the engagement at any time for any reason by written notice, subject on our part to applicable rules of professional conduct. In the event that we terminate the engagement, we will take such steps as are reasonably practicable to protect Clients' interests in this matter and, if you so request, we will suggest to you possible successor counsel and provide successor counsel of your choosing with whatever papers you have provided to us. Unless previously terminated, our representation of Clients will terminate upon our sending our final statement for services rendered. Clients are engaging the Firm to provide legal services in connection with a specific matter. After completion of the matter, changes may occur in laws or regulations that are applicable to Clients that could have an impact upon their future rights and liabilities. Unless Clients continue to engage us to provide additional advice, this Firm will assume that it has no continuing obligation to advise Clients with respect to future legal developments

18.      Insurance Coverage. In connection with our representation of Clients in this matter, Clients have been informed that if Clients have comprehensive or commercial general liability insurance policies, Clients may be entitled to insurance coverage for this matter. If Clients have policy(ies) that may provide coverage, Clients should notify the insurer(s) of this matter and tender the defense of the matter to preserve any rights Clients may have to coverage of the claim and/or defense costs. If Clients prefer, and if any such policies exist, we would be happy to review those documents and advise Clients of the possibility of such coverage. To date, however, we have not been informed that any such coverage exists and have not been provided any such policies. Accordingly, unless we receive such information from Clients, we cannot take any such measures.

19.      Arbitration. If a dispute arises between the Firm and Clients regarding [attorneys' fees] [the services provided in the engagement], the parties agree to resolve that dispute through [mediation before any suit is filed] [mediation followed by arbitration through [INSERT] arbitration service] [arbitration through [INSERT] arbitration service]

20.      No Advice Regarding This Fee Agreement. The Firm is not acting as Clients' counsel in advising them with respect to this letter, as we would have a conflict of interest in doing so. If Clients, or any of them, wish to be advised by independent counsel on the question of whether they should be so represented, we recommend that they consult with independent counsel of their choice. In addition, if they have any questions or would like additional information, we would be happy to discuss this matter with any of them.

I am enclosing two originals of this letter. If the foregoing correctly states our understanding regarding the Firm's representation of Clients, please have an appropriate representative of Clients sign one of the originals in the space provided and return it to me at your earliest convenience.

Very truly yours,

Laura Lawyer

Enclosures

THE TERMS OF THE ENGAGEMENT OF

THE FIRM AS STATED ABOVE

ARE ACCEPTED AND APPROVED BY:

________________________________________

CLIENT