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Letter of engagement template, with costs disclosure

An engagement letter that also covers costs disclosure, in Word and PDF with space for your logo. Filled in for a family law property settlement.

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The template

Formatted for Word, with a box for your logo. Placeholders are [highlighted] so nothing is missed.

Letter of engagement template

Your logo

[Firm name]

[Street address], [Suburb] [STATE] [Postcode]

T [Phone] · E [Email]

ABN [ABN]

[Date]

Private and confidential

[Client name]
[Street address]
[Suburb] [STATE] [Postcode]
By email: [Email]

Our ref
[Matter number]
Contact
[Lawyer name]

Dear [Client name],

Engagement and costs disclosure: [matter]

Thank you for asking [Firm name] to act for you. This letter sets out what we will do, who will do it and what it is likely to cost. Please read it, then sign and return the acceptance at the end.

1.What we will do

[The work you have been instructed to do.]

Our work does not include [exclusions, e.g. appeals or tax advice]. If you want us to do more, we will confirm the extra work and its cost in writing first.

2.Who will work on your matter

[Name], [role]$[rate] an hour plus GST
[Name], [role]$[rate] an hour plus GST

We charge for time in units of [6] minutes. [Other charges, e.g. a fixed fee for a stage.]

3.Estimate of your total legal costs

We estimate our legal costs for this work at $[amount] to $[amount] including GST, plus disbursements of about $[amount].

This is an estimate, not a quote. The main things that could change it are [variables, e.g. whether the other side responds promptly]. We will tell you promptly if the estimate changes significantly.

Disbursements are costs we pay for you, such as [court fees, searches, a barrister or an expert]. We add them to your bill.

4.Bills and payment

We will bill you [monthly / at the end of each stage]. Each bill is payable within [number] days. We may ask for money in advance, which we hold in our trust account and use only to pay your bills. [If you charge interest on unpaid bills: the rate and when it starts.]

5.Your rights

  • Ask us about our costs at any time.
  • Negotiate the terms of this engagement and how we bill you.
  • Receive a bill, and ask for an itemised bill if you receive a lump-sum bill.
  • Be told promptly of any significant change to this estimate.
  • Dispute our costs. Please raise it with us first. You can also contact [the legal regulator in your state].

6.Ending the engagement

You may end our engagement at any time by telling us in writing. We may end it on reasonable notice for a good reason, such as unpaid bills. You will need to pay for the work done up to that date.

Please call me on [phone] if you have any questions.

Yours sincerely,

[Lawyer name]

[Title]

[Firm name]

Acceptance

I have read this letter, including the estimate of costs, and I instruct [Firm name] to act for me on these terms.

Signed
[Signature]
Name
[Client name]
Date
[Date]

What is a letter of engagement?

A letter of engagement confirms that your firm acts for the client: the work you will do, who will do it, what it is likely to cost and how you will bill. It is sent at the start of a matter, before substantial work begins.

In most Australian states the costs part is not optional. Once costs are likely to pass a threshold, a law practice must tell the client in writing how costs are calculated and give an estimate of the total.

  • Documents

What to include

  • What you will do

    The scope of the work, and what is not included.

  • Who will do it

    Names, roles and rates, and the time units you charge in.

  • An estimate of total costs

    A range, what could change it, and likely disbursements.

  • Bills and payment

    How often you bill, when bills are due, and money held in trust.

  • The client’s rights

    To negotiate, receive an itemised bill, be told of changes and dispute costs.

  • Acceptance

    A signature, so there is no doubt the client agreed.

  • Workflow

How to write a letter of engagement

  1. 01

    Confirm the scope in writing

    What you will do, and what you will not, in the client’s terms.

  2. 02

    Give a real estimate

    A range the client can plan around, with what could change it.

  3. 03

    Update it when it changes

    Disclosure is ongoing. Tell the client promptly when the estimate moves.

  4. 04

    Check your state’s rules

    The thresholds and required wording differ between the Uniform Law states and the rest.

  5. 05

    Keep it readable

    Plain English, short sections. The client should understand what they are agreeing to.

  6. 06

    Get it signed

    Before substantial work begins, and keep the signed copy on the file.

  • Recordings
  • Documents
  • Review

Start from the first consultation.

Law Brief records the first meeting and drafts the file note and client letter, in Australia. The scope, the client’s goals and the work agreed are written down before you prepare the engagement letter.

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2:002:152:302:453:00
AlexConsultation · Alex
2:00 to 2:45
TranscriptTranscript
Ready in seconds
2:45
Letter and noteDella drafts letter and note
Under 5 min
2:49
Next: SamNext client · Sam
11 minutes to spare
3:00

The red bar is the consultation itself: 45 minutes with the client. Everything after it takes Della under 5. The letter and file note are waiting for your lawyer 11 minutes before the next client sits down.

Case study

Live since February at a Sunshine Coast law firm.

  • ~$420Ka year in staff time, from Della
  • 20legal professionals using it
  • 45 → 5minutes per client letter

How we worked it out: about $35,000 a month in staff time, on the firm’s own dashboard.

Also freeLetter of advice template, with a worked example

Questions.

Checked . General information, not legal advice. Sources: VLSB+C on costs disclosure · Legal Profession Uniform Law (NSW), s 174 · Legal Profession Uniform Law (NSW), s 178 · Uniform Law in Western Australia (LPBWA) · Queensland costs disclosure changes, March 2024 (Proctor)
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