You should give careful thought to the scope of your engagement. It should briefly but clearly and accurately describe the services to be delivered and set out the expectations of both parties to the agreement. There is an important balance to be struck in setting out the scope. If the scope is too wide you risk assuming responsibility for matters that you intended to be outside the engagement. A wide scope also makes it harder for you to terminate the engagement if relations with the client break down as it removes from you the argument that you have completed the retainer and thus do not have to accept further work. On the other hand, if the scope is too narrow, there is a risk that you inadvertently assume responsibility for additional work outside the scope. In addition, if you (expressly or impliedly) represent that you have authority to act when you do not, and a third party relies on that, you may be liability to the third party for losses resulting from that reliance ((known as breach of warranty of authority). The best approach therefore is to have a carefully crafted narrow scope and to review it periodically to ensure it always records and reflects the work being undertaken, but no more.
A new Engagement Letter will be required if:
On occasion, and particularly in employment matters, a third party may be nominated to pay our fees. If so, simply inform Central Office once you are made aware of it. The Risk Questionnaire asks this as part of a new matter set-up. If this comes to light later, then you should advise invoicing@keystonelaw.co.uk. Unless the matter is high risk, we need only the name and address of any third-party payer. (Colleagues in the Isle of Man will need to identify and verify the third-party payer and establish the source of the payer's funds.)
It should be noted that, even where an Invoice is marked as payable by a third party, the client retains primary responsibility for payment and, further, any third-party payer cannot be the addressee of our invoices and may not be able to reclaim the VAT. If this is an issue, and where the work has genuinely been carried out for the third party, the solution is for that third party to become a client of the firm in the usual way. Please bear in mind that you will then owe a duty of care to both clients. For further details, see the section on third party payers.
As matters evolve and develop, we must ensure the client's expectations remain well managed, particularly in so far as timescales and costs are concerned. The most common cause of clients' complaints to the Legal Ombudsman is lawyers failing to keep clients informed of costs. Therefore, it is very important that expectations are managed from the outset and throughout the retainer.
You have a duty to carry out all work the client needs which is in scope and to warn the client about work the client might need which is out of scope. Warnings should be adequate, so the client understands the impact and risk of failing to take that advice. Where you are not taking work which the client needs, then you must make sure the file clearly records your advice on this and be aware that when you are proved right by later events and the client should have heeded your advice to take whatever steps you had in mind, it is common for them to claim and say your explanations were inadequate. Take extreme care here and always remember your duty to warn (click here for the training notes on the duty to warn) and follow the guidance on clients ignoring your advice. If the client asks us to undertake additional work beyond the original scope and we agree to do so, then you should record the extended scope of work in writing as this amounts to a change in the terms of our engagement (our contract) with the client. A simple email is sufficient, but it is important that the change is documented.