Identification of the parties. State that the agreement is between your law firm (“Law Firm”) and the client (“Client”).
Legal service to be provided. State that the legal services to be provided is representation of Client in forming a California corporation, and then specifically list what that includes, e.g.,
analysis and consultation to determine the structure of the corporation, including the appropriateness of an Internal Revenue Code S corporation election; preparation of articles of incorporation, bylaws, and minutes of the first meeting of directors; preparation and filing of documents necessary to comply with applicable federal or state securities regulations; and obtaining a corporate minute book, share certificates, and a corporate seal.
You may also want to state what it doesn’t include, such as advising on or obtaining business licenses, permits, bonds, or insurance; obtaining a federal Employer Identification Number; or drafting employment agreements. Make it clear that a separate agreement would have to cover anything not included.
Responsibilities of Law Firm and Client. State what you will do (e.g., perform services under the agreement, communicate with Client) and what you expect from the client (e.g., that Client will be truthful and cooperative and timely make required payments).
Attorney fees. State the hourly rate that Client will pay for the services and how they will be charged. Specifically list the activities for which Client will be charged, e.g.,
Law Firm will charge for all activities undertaken in providing legal services to Client under this agreement including, but not limited to, the following: conferences, including preparation and participation; correspondence and legal documents (review and preparation); legal research; and telephone conversations. When two or more of Law Firm’s personnel are engaged in working on the matter at the same time, such as in conferences between them, the time of each will be charged.
Make it clear that you make no promises about the total amount of attorney fees to be incurred under the agreement.
Deposit for fees and costs. State the amount Client will deposit with you for payment of attorney fees and costs incurred. Specify when and how additional deposits are required, and what amount will be refunded at the end of services.
Billing statements and payments. Note that you will send monthly statements (except if “no attorney fees or costs are incurred for a particular month, or if they are minimal, the statement may be held and combined with that for the following month”). Require that any balance be paid in full within 30 days after the statement is mailed, and provide for interest on any balance remaining unpaid after 30 days.
Arbitration. State that, if you file suit on an attorney fee dispute, Client will have the right to stay that suit by timely electing to arbitrate the dispute under Bus & PC §§6200-6206.
Errors and omissions insurance. If you don’t have malpractice coverage, include the following type of statement:
Law Firm does not maintain errors and omissions insurance coverage and has not filed a written agreement with the California State Bar guaranteeing payment of all claims established against the attorney or law corporation by clients arising from the representation.
Other CEBblog™ posts you may find useful:
- Fee Agreements: Say What You Won’t Be Doing
- Review Your Hourly Fee Agreement
- The Contract that Binds: Your Fee Agreement
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