What is a Legal Service Contract?
A legal services contract is a written agreement between a service provider offering legal assistance and the client who receives services. It generally lays out the scope of legal services, terms of payment and any limitations to the services being provided by the attorney. Typically, legal contracts are used when hiring an attorney or law firm for counsel. Common situations include representing individuals in a suit against another party, lawsuits against one another, as well as representation during divorce.
Legal services contracts are also used for circumstances that require assistance from an attorney but do not involve intervention against another party. For example , they might be used while establishing a will.
The use of a written contract is crucial when securing legal services for a project. When you hire an attorney without a contract, it can allow the attorney to take advantage in several ways. For example, the attorney may charge rental space in an office building that does not have a lease, recruit other attorneys to work for them while offloading cases to their assistants or relying heavily on their assistants to complete legal work but charging the client for the hourly rate of the attorney. Worst of all, these practises would be illegal.
Essential Components of a Legal Services Contract
When it comes to legal services, the scope and breadth of the firm’s engagement with the client must be explicitly defined. Without the parameters set out in a legal services contract, there can be uncertainty in the interpretation of the firm’s responsibilities. A legal services contract template contains the following important clauses and points:
Parties – details the parties involved in the agreement and identifies their legal names and business entity types (e.g. LLC).
Scope of services – clearly lays out the nature of the legal services to be provided by the law firm, including a general description of the type of work and anticipated hours to be worked on the matter.
Limitations of services – elaborates that the extent of services to be provided to the client are contractual only, and do not extend further without the outside agreement of both parties. This clause is sometimes called "extra services provision" or "scope limitation provision."
Zurich Am. Ins. Co. v. Sky Belts, Inc., 528 F. Supp. 2d 91, 97 (D.D.C. 2007) (Under a reasonable and accurate reading of the engagement letter, Defendants cannot have perceived Zurich’s agreement ‘to select counsel’ to imply an agreement to remedy their litigation problems once they arose.)
Payment terms – states the payment arrangements, methods, and timing of when payments are due to the law firm for its services. This can include hourly rates, task rates, flat fees, retainer fees, and cost for expenses. (Inflation escalators)
Confidentiality – assures that confident client information will not get disclosed to the outside world; and any confidential information learned about the matter will remain confidential and not leak to the press or other outside parties.
Dispute resolution – sets forth the methods or venues for solving any problems that may arise in the course of the clie’s relationship with the law firm. Can be mediation, arbitration, or use of the courts.
Indemnification – holds harmless the attorney from any damages or lawsuits that might occur during the course of conducting the legal services or following the work provided.
Termination – allows the client to cancel for any reason within a certain time period of the signing of the contract; usually 5 days.
Why Use a Template?
A contract template for legal services can streamline the process of drafting contracts. No longer do attorneys need to spend hours trying to devise the perfect agreement that they can use in multiple situations. Instead, the template provides a foundation on which attorneys can do their work. The time it saves attorneys is significant—and as we all know, legal professionals charge by the hour, so the savings are multiplied by the number of billable hours that would have been spent in contract preparation.
Consistency is perhaps the most important benefit of using a template. Not only do you save time by reusing sections of the agreement, but the contract language will also be consistent from one agreement to another. This reduces the risks associated with custom contracts that may use different agreement language to describe similar terms. It also helps the attorney by providing them with a guide that helps them ensure that no details are overlooked.
Last but not least, using a legal service contract template allows attorneys to save even more money as the template can be made reusable over and over. Although a custom contract should be drafted for specific negotiated goals, having a template in place speeds up the process and lets clients get their agreements signed more quickly. Whether the legal services contract template is a simple form or contains clauses with language that’s apparently standard across the industry, it can be of great benefit to both provider and client.
Modifying a Legal Contract Template
Given the broad variety of potential legal services, it is essential that your contract template be tailored to the specific services you will be providing. For instance, if you are preparing a will as a specific service within a general practice, you may need to include clauses about how long the will is valid, what constitutes a legal witness, and what happens if the will is contested. On the other hand , if you are preparing a contract for a corporate client for whom you will provide basic services, you may want to add a clause that stipulates the basic services to be expected.
Additional clauses or sections may be needed to fit your services as well. As with so many things in the legal profession, this is one area where it’s important that an attorney draft a contract template that meets his or her own specific needs.
Mistakes to Avoid
It is important to keep in mind that a legal services contract template is just one part of your overall business strategy. That means that a template is not sufficient in and of itself. Lawyers who rely only on the law firm template often make some common mistakes. Let’s look at a few of those issues.
Forgetting or ignoring the need to revise template provisions. Many law firm templates are built around language that has been handed down through the years. This makes these templates useful and able to be called legal services contract templates. But templates have to be revised to reflect present-day needs. Your office’s practices should be reflected in the document, especially when it comes to fee structures, and you shouldn’t rely on pre-printed language for your terms without some revisions. The template, especially if it is a generic form, probably will not reflect your practice’s model. If you take a template from a law firm in another part of the country, for example, your practices are probably going to differ from theirs as well. You may provide different services for different fees or you won’t charge for certain kinds of work. All of that should be reflected in the document you use with your clients, which means revising the pre-printed language as necessary. Do not forget to modify a law firm template.
Missing and/or vague terms. One of the biggest issues we see with law firm templates is not using clear and concise terms in the document. As mentioned before, the client should have a clear understanding of how the law firm will structure its services. Priority should be given to clarity. In order to do this, the attorney will need to include some standard definitions in its legal services contract template. For example, the law firm might typically bill for its time in half-hour increments. That would need to be explained to the client expressly so that there is no confusion. Instead of providing the just-right amount of detail, lawyers is often too brief or vague in their provisions. If the client needs to ask questions about whether the firm will bill for travel time, for example, it is clear that the attorney missed some opportunities to advise in the contract.
Not understanding who can authorize the legal services contract template and the language within. Did you know that if your firm gets a legal services contract template from a court system, your firm is supposed to have the language approved by the court before you assume liability for it? Most people don’t. The same rules apply for any third-party. When it comes to legal services contracts, it is important to understand who can and cannot bind your firm. Otherwise, you are likely to suffer the consequences of a third party’s actions without being compensated for it.
Where to Get Trusted Contract Templates
There are a number of reputable sources for legal services contract templates. Some sources have pre-packaged contracts that have been vetted by experienced attorneys, while others allow for complete customization by users. The first step is to look at legal websites that offer many useful resources, from forms to templates.
You should also check professional organizations and legal aid websites. Legal aid websites may offer templates free of charge, or for a small fee if you are not eligible for assistance . If you have a business attorney you trust, ask the attorney about drafting a contract for your business or pointing you towards customized and vetted legal template websites that they have vetted for quality. Regardless of where you find the template, it is best practice to conduct your due diligence using a few steps to make sure the legal services contract template you select will be suitable for your needs.