California Engagement Letter Compliance Review

CALIFORNIA ENGAGEMENT LETTER COMPLIANCE REVIEW

Reviewer and Matter Information

Part 1. Threshold Question — Is a Written Agreement Required?

☐ Contingency fee agreement — writing mandatory under § 6147 (no dollar threshold)
☐ Non-contingency engagement where total expense to client is reasonably foreseeable to exceed $1,000 — writing mandatory under § 6148
☐ Engagement falls within a § 6148(d) exception:
☐ Services rendered in an emergency to avoid foreseeable prejudice
☐ Arrangement implied by prior similar services for the same client
☐ Client knowingly states in writing that a writing concerning fees is not required
☐ Corporate client and fees implied by course of dealing

Conclusion: ☐ Written agreement required ☐ Not required (document basis above)

Part 2. Contingency Fee Agreement Requirements (§ 6147)

The agreement is in writing and:

☐ Signed by both the attorney and the client (or the client's guardian/representative)
☐ A duplicate signed copy was provided to the client at the time the contract was entered into
☐ States the contingency fee rate the client and attorney have agreed upon: [____]%
☐ Explains how disbursements and costs incurred will affect the contingency fee and the client's recovery (gross vs. net calculation made explicit)
☐ States to what extent, if any, the client could be required to pay compensation for related matters not covered by the contingency contract (e.g., appeals, collection, regulatory)
☐ Contains a statement that the fee is not set by law but is negotiable between the attorney and the client (required by § 6147(a)(4))
☐ If the matter is subject to MICRA (medical malpractice) — contains the § 6146 statement that rates set by § 6146 are the maximum limits and the rate may be negotiated lower

Calculation method:
☐ Percentage applied before deduction of costs (gross recovery)
☐ Percentage applied after deduction of costs (net recovery)
☐ Tiered rate (e.g., pre-suit / post-suit / post-appeal):
| Stage | Rate |
|---|---|
| Pre-filing | [____]% |
| Post-filing, pre-trial | [____]% |
| Trial / post-trial | [____]% |
| Appeal | [____]% |

Part 3. Non-Contingency Fee Agreement Requirements (§ 6148)

The written agreement contains:

☐ The basis of compensation, including hourly rates, statutory fees, flat fees, and other standard rates, fees, and charges applicable to the case
☐ The general nature of the legal services to be provided to the client
☐ The respective responsibilities of the attorney and the client as to performance of the contract
☐ A duplicate signed copy was provided to the client at the time the contract was entered into
☐ Disclosure that the client may request, no more often than every 30 days, a written billing statement, and that the attorney must provide it within 10 days of demand (§ 6148(b))
☐ For flat fees — explicit statement of services covered and the fixed amount; if the flat fee will be deposited into the operating account rather than trust, the agreement contains the disclosures required by CRPC 1.15(b) (see Part 5)

Standard Rates Disclosed:

Part 4. CRPC 1.5 — Fees for Legal Services

☐ The fee is not unconscionable under CRPC 1.5(b) (the 13-factor test was applied and documented)
☐ The fee is not illegal under any statute (e.g., MICRA limits, probate statutory fees, workers' compensation limits)
☐ No fraud or overreaching occurred in negotiating or setting the fee
☐ All material facts concerning the fee were disclosed to the client
☐ For flat fees: the agreement acknowledges the flat fee is not earned until services are performed (CRPC 1.5(e); ABA Formal Op. 505 (2023) consistent)
☐ For "true retainer" (availability/general retainer): the agreement labels it as such and explains it is earned on receipt because it ensures the attorney's availability and is paid in addition to other fees (CRPC 1.5(d))
☐ The agreement avoids labeling advance fees as "non-refundable" except where expressly permitted (true retainer or compliant flat fee)
☐ Any fee division with a lawyer not in the same firm complies with CRPC 1.5.1:
☐ Client has consented in writing after written disclosure that a division will be made and identifying the lawyers and terms
☐ Total fee charged is not increased solely by reason of the division

Part 5. CRPC 1.15 / CTAPP — Trust Accounts and Advance Fees

☐ Advance fees (other than a true retainer or a qualifying flat fee with required disclosures) are deposited into the client trust account (IOLTA or non-IOLTA) and withdrawn only as earned
☐ If the agreement permits deposit of a flat fee into the operating account, it contains BOTH:
☐ A statement that the client has the right to require the funds be deposited into the trust account until earned, and
☐ A statement that the client is entitled to a refund of any amount of the fee not earned in the event the representation is terminated or the services are not completed
☐ The IOLTA bank and account are registered with the State Bar via the Client Trust Account Protection Program (CTAPP), and the attorney has completed the annual CTAPP self-assessment and certification (next deadline: March 30 following the close of each reporting year)
☐ The agreement explains how unearned fees will be refunded upon termination (CRPC 1.16(e)(2))
☐ Replenishment thresholds (if any) are clearly stated: replenish when balance falls below $[________________]

Part 6. CRPC 1.2 — Scope of Representation (and Limited Scope)

☐ The scope of representation is described with reasonable specificity (matter, court/forum, services included)
☐ Services expressly excluded are listed (e.g., appeals, collection of judgment, related regulatory or tax issues)
☐ If the representation is limited in scope under CRPC 1.2(b):
☐ The limitation is reasonable under the circumstances
☐ The client has given informed consent (CRPC 1.0.1(e) definition met — material risks and reasonably foreseeable adverse consequences communicated)
☐ The agreement documents the limitation in writing
☐ If the matter is a civil case in which a court appearance has been or will be made, the attorney will file a Notice of Limited Scope Representation (form MC-950 / CIV-150) per Cal. Rules of Court 3.35–3.37

Part 7. CRPC 1.4 — Communication

☐ The agreement identifies the primary contact attorney and a back-up contact
☐ The agreement describes how the firm will keep the client reasonably informed about the status of the matter
☐ The agreement explains how material changes to the fee or scope will be communicated (e.g., advance written notice of rate increases, signed amendment for scope changes)
☐ The agreement identifies preferred channels (mail, email, secure portal) and expected response times

Part 8. Mandatory Fee Arbitration Disclosure (§§ 6200–6206)

☐ The engagement letter informs the client that any dispute concerning fees may be resolved through the State Bar Mandatory Fee Arbitration program under Cal. Bus. & Prof. Code §§ 6200–6206
☐ The agreement states that MFAA arbitration is voluntary for the client but mandatory for the attorney if the client elects it
☐ The agreement notes that MFAA arbitration is non-binding unless both parties agree in writing after the dispute arises to make it binding (§ 6204(a))
☐ The firm has a procedure in place to serve the State Bar's "Notice of Client's Right to Fee Arbitration" form on the client before filing any fee collection action
☐ The agreement does not require the client to waive MFAA arbitration in advance (such a waiver is unenforceable under § 6204)

Part 9. Other Required and Recommended Disclosures

☐ Conflicts of interest — agreement discloses that a conflict check has been completed and addresses procedures if a conflict later arises (CRPC 1.7, 1.10)
☐ Confidentiality — agreement acknowledges the duty under Cal. Bus. & Prof. Code § 6068(e)(1) and CRPC 1.6
☐ Professional liability insurance disclosure if the attorney does not carry at least $100,000 per occurrence / $300,000 aggregate (CRPC 1.4.2)
☐ Use of generative AI — agreement discloses any intended use of generative AI in the representation (consistent with State Bar of California Practical Guidance for the Use of Generative Artificial Intelligence in the Practice of Law)
☐ Cybersecurity / electronic communication — agreement explains use of email, cloud storage, e-signature, and any associated risks
☐ File retention and destruction — period stated (CA State Bar Standing Comm. on Prof'l Responsibility Op. 2001-157 suggests retention of original criminal/probate files indefinitely; civil files typically 5+ years after closing)
☐ Withdrawal and termination — agreement summarizes attorney's right to withdraw under CRPC 1.16 and obligation to take reasonable steps to protect the client's interests
☐ Successor counsel — agreement explains how the client file will be released upon request (CRPC 1.16(e)(1))
☐ Costs and expenses — categories of costs the client will bear are itemized, and the cost-advance policy is stated
☐ Settlement authority — agreement states that decisions regarding settlement and other objectives rest with the client (CRPC 1.2(a))

Part 10. Signature and Delivery Verification

☐ Engagement letter signed by the attorney
☐ Engagement letter signed by the client (or authorized representative)
☐ Duplicate signed copy delivered to the client at the time the contract was entered into (required by both § 6147 and § 6148)
☐ Method of delivery documented: ☐ In person ☐ Mail ☐ Email ☐ Secure portal ☐ E-signature platform: [________________]
☐ Signed copy retained in the matter file (paper or electronic) with date-stamped record of delivery

Part 11. Reviewer Certification

I have reviewed the above engagement letter for compliance with California Business and Professions Code §§ 6147, 6148, and 6200–6206, the California Rules of Professional Conduct, and current State Bar of California guidance, and certify the following:

☐ All applicable items are checked, OR
☐ Deficiencies have been identified and a remediation plan is documented below

Deficiencies / Remediation Notes:

[____________________________________________________________]

[____________________________________________________________]

[____________________________________________________________]

Reviewer Signature: ________________________________ Date: [__/__/____]

Reviewer Printed Name and State Bar No.: [________________________________]

Sources and References

• Cal. Bus. & Prof. Code § 6147 (contingency fee agreements)
• Cal. Bus. & Prof. Code § 6148 (non-contingency written fee agreements)
• Cal. Bus. & Prof. Code §§ 6200–6206 (Mandatory Fee Arbitration Act)
• California Rules of Professional Conduct (effective Nov. 1, 2018, as amended)
• State Bar of California — Client Trust Account Protection Program (CTAPP)
• State Bar of California — Sample Written Fee Agreement Forms (Instructions & Comments)
• State Bar of California — Notice of Client's Right to Fee Arbitration
• Cal. Rules of Court 3.35–3.37 (Limited Scope Representation)
• State Bar of California — Practical Guidance for the Use of Generative AI in the Practice of Law (Nov. 16, 2023)