Spell Out the Effective Date of Your Fee Agreement

Every contract for legal services should contain a clause specifying the date the agreement will become effective. This date establishes the beginning of the attorney-client relationship and marks the beginning of the attorney’s fiduciary duties toward the client.

When the agreement’s effective date occurs and how it’s determined are unimportant, as long as the agreement clearly spells it out.

For example:

  • Some attorneys like to have a fee agreement ready to sign at the first meeting with a prospective client. In this situation, the attorney may want to provide that the agreement will take effect on execution.
  • Other attorneys draft the agreement after the initial meeting and send it to the client to be executed and returned. The agreement may provide that it will become effective when the attorney receives the executed agreement.
  • Many attorneys make the initiation of the attorney-client relationship contingent on receipt of an agreed-on initial deposit for attorney fees.

Whenever the effective date of an engagement is dependent on action by the prospective client, it’s a good idea to set a deadline for receipt of the agreement and payment, after which you’ll no longer be obligated to accept the employment.

Here’s sample language on the effective date of a fee agreement:

The effective date of this agreement will be _ _[e.g., the date on which it is executed by the _ _[e.g., second/last]_ _ of the parties to do so/the date on which Attorney is in receipt of one copy of the agreement executed by Client and the initial deposit required by Paragraph _ _ of this agreement/the date on which Attorney is in receipt of one copy of the agreement executed by Client and payment of attorney fees required under the terms of this agreement]_ _.

If appropriate, add

provided the executed copy _ _[and the deposit/payment]_ _ _ _[is/are]_ _ received on or before _ _[date]_ _ or Attorney accepts late receipt.

Then include something like this to avoid inadvertent establishment of an attorney-client relationship before the agreement is effective:

The attorney-client relationship will commence on the effective date of this agreement. Attorney will not become Client’s attorney nor will Attorney perform any legal services on behalf of Client before the effective date of this agreement.

Get more sample provisions and helpful commentary in CEB’s Fee Agreement Forms Manual.

Other CEBblog™ posts on fee agreement provisions:

© The Regents of the University of California, 2018. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited.

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