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Contract to Employ Law Firm

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Contract to Employ Law Firm - Hourly Fee - with Retainer

Agreement made on the (date), between

(Name of Client), a not for profit corporation organized and existing under the laws of the state of , with its principal office located at

referred to herein as Client and

(Name of Law Firm), a professional limited liability company organized and existing under the laws of the state of , with its principal office located at

referred to herein as the Firm.

I. Purpose of Employment

Client employs Firm to represent Client in (describe purpose of representation such as representing Client in mortgage matters before the Department of Housing and Community Development)

II. Initial Retainer

The Firm acknowledges receipt of $ as an initial retainer in this matter and, in consideration of that payment, agrees to provide legal service in connection with this matter. The initial retainer paid shall be applied against actual legal services performed for the Client and for costs and expenses incurred.

III. Hourly Rates

The Client and the Firm agree that services shall be charged at the following standard hourly rates:

A. Members: $ to $ .

B. Associates: $ to $ .

C. Paralegals: $ to $ .

IV. Final Bill

The Client and the Firm agree that the final bill to be rendered by the Firm in connection with this matter shall, in addition to reflecting the time expended, take into account any factors prescribed by the State Bar of (name of state) to be considered as guides when determining the reasonableness of fees for legal services, such as the following:

A. The time and labor required, the novelty and difficulty of the questions involved and the skill requisite to perform the legal service properly.

B. The fee customarily charged in the locality for similar legal services.

C. The amount involved and the results obtained.

D. The time limitations imposed by the Client or by the circumstances.

E. The nature and length of the professional relationship with the Client.

F. The experience, reputation, and ability of the lawyer or lawyers performing the services.

4. Interim Billings

Interim billings may be submitted to the Client from time to time in the event the time charges of the Firm exceed the initial retainer. All interim billings shall be due and payable on receipt unless otherwise stated. Failure to pay interim billings promptly will permit the Firm after notice to the Client to terminate its representation of the Client. It is understood that the hourly time charges include but are not limited to: court appearances; telephone conferences; office conferences; legal research; depositions; review of file materials and documents sent or received; preparation for trials, hearings, and conferences; drafting of pleadings or instruments; and office memoranda and correspondence.

5. Out-of Pocket Disbursements

The Client agrees to assume and pay for all out-of-pocket disbursements incurred in connection with this matter. These shall include filing fees, witness fees, travel, sheriff's and constable's fees, expenses of depositions, investigative expenses, and other incidental expenses. The Firm agrees to obtain the Client's prior approval before incurring any disbursement in excess of $ .

6. Refund to Client

If, upon either the completion of the matter or the termination of the Firm's representation of the Client, the total cost of the legal services performed by the Firm shall be less than the amount of any retainer paid by the Client, the balance shall be refunded to the Client by the Firm.

WITNESS our signatures as of the day and date first above stated.

By:

By:

Enter text✕

What the Contract to Employ Law Firm Is and When It Applies

A Contract to Employ Law Firm (also called an engagement letter or retainer agreement) is a written agreement that defines the relationship between a client and a law firm. It establishes scope of work, fee arrangements (hourly, flat, contingency, or hybrid), retainer and billing terms, responsibilities of the parties, confidentiality obligations, conflict-of-interest disclosures, and the governing law and dispute-resolution process. The contract creates contractual duties, helps manage expectations, and provides evidence of authority for the firm to act on the client's behalf in negotiations or litigation.

Why a Clear Engagement Contract Matters

A written engagement contract reduces misunderstandings about fees, scope, and authority; it protects privilege and clarifies when the attorney-client relationship begins and ends. For electronic execution, the agreement is generally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes when intent, consent, attribution, and reliable record retention are satisfied.

Why a Clear Engagement Contract Matters

Who Typically Uses a Contract to Employ a Law Firm

Typical users include individual clients, small businesses, and corporate legal departments who need written terms for legal representation.

  • Individual clients seeking personal legal services such as family law, estate planning, or criminal defense who need fee and scope clarity.
  • Small and medium businesses engaging outside counsel for transactional, litigation, or regulatory matters that require defined deliverables and billing terms.
  • In-house legal or procurement teams contracting a firm for large or ongoing matters where service-level and conflict provisions are necessary.

The document suits any matter where formal engagement terms, billing expectations, or delegation of authority should be documented in writing.

Primary Signers and Roles

Client — Authorized Officer

The client signatory must be the natural person with authority to bind the client (individual) or an officer/authorized representative for an organization; include title and capacity to avoid later disputes about authority.

Law Firm — Managing Partner

A partner or designated counsel should sign on behalf of the firm and identify billing contact, responsible attorney, and any delegated subcontractors or co-counsel.

Essential Elements to Include in the Engagement Contract

A complete Contract to Employ Law Firm sets expectations across fees, scope, communication, and termination to reduce disputes and support enforceability.

Scope of Services

Define specific tasks, phases, excluded work, and deliverables so both parties understand what the firm will and will not perform.

Fee Arrangement

State hourly rates, flat fees, contingency splits, retainers, billing increments, reimbursement of expenses, and conditions for fee adjustments.

Retainer and Billing

Specify retainer amount, when it is earned or refundable, billing cycle, interest on overdue amounts, and acceptable payment methods.

Confidentiality & Privilege

Affirm attorney-client privilege, limits on disclosure, data handling expectations, and any client consents required for sharing information.

Conflict Disclosure

Document known conflicts, consent procedures for potential conflicts, and the firm’s right to withdraw if an unconsented conflict arises.

Termination & Dispute

Describe termination rights, notice requirements, transitional obligations, and governing law or arbitration provisions.

Step-by-Step: Completing the Contract to Employ a Law Firm

Follow these steps to prepare, review, and execute a clear and enforceable engagement contract.

  • 01
    Draft: Populate client and firm details, scope, fees, retainer, and termination clauses.
  • 02
    Review: Both parties review for accuracy, conflicts, and required disclosures.
  • 03
    Authorize: Ensure signers have authority and any corporate approvals are recorded.
  • 04
    Execute: Sign using a compliant method and retain the signed record including audit trail.

How to Configure an Online Engagement Workflow

If you complete the contract electronically, set a workflow that secures identity, preserves records, and routes approvals in order.

Field Configuration
Signer Order Specify sequence: client then firm or simultaneous signing.
Authentication Use email plus SMS code or stronger verifier for identity.
Audit Trail Enable timestamp, IP, and action log capture.
Retention Automate PDF export and secure storage on completion.

Digital Signing and Submission: Platform Considerations

Choose a platform that supports reliable authentication, secure storage, and an auditable signature trail.

  • Integrations: Works with common systems such as Microsoft 365 and NetSuite.
  • Document Formats: Supports PDF and DOCX with export to archived PDF/A.
  • Authentication Options: Email link, SMS code, or advanced signer verification.

Capture a complete certificate of completion and preserve signed documents under applicable retention policies; ensure any HIPAA or regulatory needs are configured before sharing.

Where to Send or File the Executed Engagement Contract

After execution, route the fully signed contract to the appropriate recipients and storage locations to maintain proof of agreement.

  • Client Copy: Provide the client a digitally-signed PDF for their records.
  • Firm Records: Store in the firm's matter management system with retention tags.
  • Billing System: Attach executed contract to matter in the billing platform.
  • External Filings: File with court or agency only if required by the matter.

eSignature Pricing Comparison for Executing Engagement Contracts

Comparison of common eSignature vendors and plan-level pricing to consider when selecting a signing platform for engagement agreements.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor Varies by vendor Varies by vendor Varies by vendor
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
Envelope Cap No envelope cap 100 envelopes/user/year Varies Varies Varies

Security, Compliance, and Technical Safeguards to Note

Encryption In Transit: TLS 1.2/1.3
Encryption At Rest: AES-256
Audit and Reporting: Detailed audit trails and logs
Certifications: SOC 2 Type II and ISO 27001
Regulatory Support: ESIGN, UETA, 21 CFR Part 11
HIPAA: BAA available where required

Key Risks and Legal Consequences of a Flawed Engagement Contract

Unenforceable Fees: Ambiguous fees risk disputes
Authority Issues: Non‑authorized signatory invalidates agreement
I-9 or Tax Errors: Paperwork violations carry fines
Privileged Status: Poor confidentiality language can waive privilege
Missed Deadlines: Statute of limitations risk
Data Breach: Regulatory and reputational exposure

Common Mistakes to Avoid When Preparing the Engagement Contract

  • Using vague scope language that later leads to scope creep and billing disputes between client and counsel.
  • Failing to confirm signer capacity for organizations, which can result in unenforceable contracts or claims of lack of authority.
  • Omitting retainer treatment (earned vs. refundable), causing disagreements over refunds at termination.
  • Not configuring electronic authentication or retention settings, which can impair enforceability under ESIGN or state law.

Practical Tips for Accurate and Efficient Execution

Use these practices to reduce disputes and ensure the contract is complete and enforceable.

Use Clear, Specific Scope Language
List tasks, milestones, and deliverables. Attach exhibits for complex matters to reduce ambiguity and limit surprise charges.
Document Signatory Authority
For corporate clients, include title and reference board or resolution if required to confirm that the signer may bind the entity.
Preserve Audit Trails
Capture timestamp, IP, and authentication evidence for electronic signatures and store completed records as immutable PDFs.
Review Fee and Termination Clauses
Include dispute-resolution and refund mechanics for retainers to reduce post-termination billing disputes.

Typical Timelines and Deadlines in an Engagement

Track contractual dates to manage performance, billing, and any statutory deadlines triggered by the engagement.

Effective Date:

Date when obligations and billing begin (entered as MM/DD/YYYY).

Retainer Due:

Usually payable upon signing or before work commences.

Billing Cycle:

Monthly or as agreed; specify due dates and late fees.

Notice to Terminate:

Contract may require written notice period (e.g., 10–30 days).

Record Retention Start:

Retention begins on effective date or creation of final signed copy.

Frequently Asked Questions About the Contract to Employ Law Firm

Answers to common legal, procedural, and technical questions when preparing or executing an engagement agreement.


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