Colorado Engagement Letter Compliance Review

COLORADO ENGAGEMENT LETTER COMPLIANCE REVIEW

Reviewer and Matter Information

Part 1. Threshold Question — Is a Written Fee Communication Required?

☐ This is a new client-lawyer relationship (no prior regular representation) — written communication of basis or rate is required under Colo. RPC 1.5(b)
☐ This is a continuation of regular representation with no material change to the basis or rate — a new writing is not strictly required, but is best practice
☐ This is a continuation of regular representation with a change to the basis or rate — written communication of the change is required under Colo. RPC 1.5(b)
☐ This is a contingent fee matter — writing always required under Colo. RPC 1.5(c) and C.R.C.P. Ch. 23.3, Rule 1, regardless of client history
☐ The writing was delivered before or within a reasonable time after commencing the representation

Conclusion: ☐ Written fee communication required and in place ☐ Required and being prepared ☐ Not required (document basis above)

Part 2. Colo. RPC 1.5(a) — Reasonableness of Fee

The fee was evaluated against the eight Colo. RPC 1.5(a) factors and is reasonable:

☐ (1) Time and labor required, novelty and difficulty of questions, and skill requisite to perform the service properly
☐ (2) Likelihood that acceptance will preclude other employment by the lawyer, if apparent to the client
☐ (3) Fee customarily charged in the locality for similar legal services
☐ (4) Amount involved and results obtained
☐ (5) Time limitations imposed by the client or the circumstances
☐ (6) Nature and length of the professional relationship with the client
☐ (7) Experience, reputation, and ability of the lawyer(s) performing the services
☐ (8) Whether the fee is fixed or contingent

☐ The fee is not unreasonable on its face under Colo. RPC 1.5(a)
☐ The expenses charged are not unreasonable in amount under Colo. RPC 1.5(a)

Part 3. Colo. RPC 1.5(b) — Required Written Communication of Basis or Rate

The writing (engagement letter, fee schedule, or memorandum) discloses:

☐ The basis of the fee (e.g., hourly, flat, contingent, hybrid) OR the rate of the fee (e.g., dollar amount per hour, fixed sum)
☐ The factors directly involved in computing the fee (those needed for the client to understand the calculation)
☐ For hourly engagements: the hourly rate(s) of each lawyer, paralegal, and other timekeeper who will perform services
☐ Any rate change mechanism (e.g., annual rate review, advance notice required)
☐ Categories of costs and expenses the client will bear (filing fees, deposition costs, expert fees, copy charges, electronic research, travel)
☐ The writing was delivered before commencement or within a reasonable time after commencement of the representation

Standard Rates Disclosed:

Part 4. Colo. RPC 1.5(c) and C.R.C.P. Chapter 23.3 — Contingent Fee Requirements

The contingent fee agreement:

☐ Is in writing and signed by the client
☐ Conforms to the mandatory form prescribed by C.R.C.P. Chapter 23.3 (use the form in the Appendix, or include all required elements verbatim)
☐ States the method by which the fee is to be determined (percentage or formula): [____]%
☐ Specifies the stage(s) of the matter at which different percentages apply (if tiered):

☐ Identifies litigation and other expenses to be deducted from the recovery and whether the deduction occurs before or after the contingent fee is calculated
☐ States how the client is to be billed for costs and expenses, and whether the client is responsible for costs if there is no recovery
☐ States whether the lawyer is to receive any additional compensation in connection with the matter (e.g., statutory fees, fee-shifting awards) and how it interacts with the contingent fee
☐ Notifies the client of the right to terminate the representation and the consequences of termination
☐ Contains a clear statement of the client's right to receive a written final disbursement statement showing the outcome of the matter, the remittance to the client, and the method of determining the remittance (C.R.C.P. Ch. 23.3, Rule 5)
☐ The client received an executed copy of the contingent fee agreement at the time it was signed
☐ The agreement will be retained for at least six (6) years following completion or settlement of the matter, together with proof of mailing of the final disbursement statement, as required by C.R.C.P. Ch. 23.3, Rule 4
☐ The matter is not one in which a contingent fee is prohibited (e.g., representation of a defendant in a criminal case; representation in a domestic relations matter where the fee is contingent on securing a divorce, the amount of maintenance, support, or a property settlement) — Colo. RPC 1.5(d)

Part 5. Colo. RPC 1.5(d) — Prohibited Contingent Fees

☐ The matter is not a criminal case in which the fee is contingent on the outcome (Colo. RPC 1.5(d)(2))
☐ The matter is not a domestic relations matter in which the fee is contingent upon securing a divorce, or upon the amount of maintenance, support, or property settlement (Colo. RPC 1.5(d)(1))
☐ If the engagement involves a family-related collection or post-judgment enforcement that the lawyer believes is permissible, the file documents the legal basis for the contingent arrangement

Part 6. Colo. RPC 1.5(e) — Referral Fees Prohibited / Fee Division Between Lawyers

☐ No referral fee has been or will be paid (Colo. RPC 1.5(e) prohibits referral fees outright)
☐ If a fee is to be divided between lawyers not in the same firm, the division complies with Colo. RPC 1.5(d) (note: numbering can shift — verify against the current rule text):
☐ Division is in proportion to the services performed and the responsibility assumed by each lawyer
☐ Client consents in writing after full disclosure of the division of fees to be made
☐ The total fee is reasonable
☐ The division is set forth in writing, signed by the lawyers AND by the client, with the client's informed consent

Part 7. Colo. RPC 1.5(f) — Advances of Unearned Fees Are Client Property

☐ The engagement letter acknowledges that advances of unearned fees are the property of the client and will be deposited in the firm's COLTAF (or non-COLTAF) trust account under Colo. RPC 1.15B
☐ The engagement letter explains that fees become the lawyer's property only as they are earned (i.e., as a benefit is conferred or a legal service is performed)
☐ The engagement letter explains how earned fees will be transferred from the trust account to the operating account (timing, billing/notice to client)
☐ Advances of unearned costs are likewise held in the trust account until expended
☐ For non-cash advances (e.g., property), the lawyer will hold the property separate from the lawyer's own property under Colo. RPC 1.15A(a)

Part 8. Colo. RPC 1.5(g) — Nonrefundable Fees and Nonrefundable Retainers PROHIBITED

☐ The engagement letter does NOT label any fee as "nonrefundable"
☐ The engagement letter does NOT purport to restrict the client's right to terminate the representation
☐ The engagement letter does NOT unreasonably restrict the client's right to obtain a refund of unearned or unreasonable fees
☐ The engagement letter expressly states that any unearned portion of an advance fee will be refunded upon termination

Part 9. Engagement Retainer Fee (If Used) — Special Colorado Treatment

Complete this Part only if the engagement involves an engagement (availability) retainer.

☐ The engagement letter explicitly labels the fee as an "engagement retainer fee" (or substantively equivalent)
☐ The engagement letter explains that the engagement retainer is paid apart from any other compensation to secure the lawyer's availability
☐ The engagement letter states that the engagement retainer is earned on receipt because the lawyer is conferring an immediate benefit (availability and foregoing conflicting representations)
☐ The engagement letter states that the lawyer is to be additionally compensated for any actual work performed (consistent with the requirement that a true engagement retainer is separate from compensation for services)
☐ The engagement retainer is reasonable in amount under Colo. RPC 1.5(a)
☐ Because the engagement retainer is earned on receipt, it may be deposited in the operating account (not the trust account)

Part 10. Colo. RPC 1.15A through 1.15E — Trust Account Compliance (Five-Rule Structure)

Rule 1.15A — General Duties

☐ The firm holds client and third-party property separate from the lawyer's own property
☐ Funds are held in a separate trust account at an institution approved under Colo. RPC 1.15E
☐ When the lawyer holds property in which two or more persons claim interests, the lawyer keeps the property separate until the dispute is resolved
☐ The lawyer promptly notifies clients and third parties of receipt of funds or property in which they have an interest
☐ The lawyer promptly delivers funds or property the client or third party is entitled to receive
☐ Upon request, the lawyer promptly renders a full accounting of funds and property held

Rule 1.15B — Account Requirements

☐ The firm maintains a COLTAF account for pooled nominal or short-term funds, OR a separate non-COLTAF trust account for funds that are not nominal or short-term
☐ The COLTAF account is established at a COLTAF-approved financial institution (Colo. RPC 1.15E)
☐ The financial institution has executed a trust account overdraft notification agreement with the Office of Attorney Regulation Counsel (Colo. RPC 1.15B(g))
☐ The account is titled to include the word "trust" (or "COLTAF") and the lawyer's or firm's name
☐ The firm has notified COLTAF of the account and complies with annual registration/renewal

Rule 1.15C — Use of Trust Accounts

☐ Only client and third-party funds are deposited in the trust account (no operating-account funds, except a small amount to maintain the account)
☐ Lawyer's fees and expenses are withdrawn promptly as they become earned or are incurred
☐ Withdrawals are made only by check payable to a named payee or by approved electronic means; no cash withdrawals
☐ The firm does not commingle client funds with the lawyer's own funds (other than the de minimis amount permitted to maintain the account)

Rule 1.15D — Required Records

The firm maintains for each trust account, for at least seven (7) years following events that occasioned the record:

☐ Receipt and disbursement journals showing all deposits and disbursements
☐ A ledger for each client or third party showing all transactions and the running balance
☐ Bank statements, deposit slips, and cancelled checks (or digital equivalents)
☐ Reconciliation reports performed at least quarterly (monthly is best practice)
☐ Copies of retainer and compensation agreements with clients
☐ Copies of accountings rendered to clients and third parties
☐ Copies of engagement letters and fee agreements
☐ All other records as required by Colo. RPC 1.15D

Rule 1.15E — Approved Institutions

☐ The trust account is held at a financial institution that has met the requirements of Colo. RPC 1.15E (eligibility, COLTAF participation if a COLTAF account, overdraft notification agreement with OARC)

Part 11. Scope of Representation (Colo. RPC 1.2) — Including 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 Colo. RPC 1.2(c):
☐ The limitation is reasonable under the circumstances
☐ The client has given informed consent (Colo. RPC 1.0(e) definition met)
☐ The agreement documents the limitation in writing
☐ If the matter involves a court appearance, the limited-scope appearance complies with applicable C.R.C.P. provisions (e.g., C.R.C.P. 11(b), 121 Section 1-1) regarding entry and withdrawal of limited-scope counsel

Part 12. Communication (Colo. RPC 1.4)

☐ 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 13. Termination, File Retention, and Successor Counsel

☐ The agreement summarizes the lawyer's right to withdraw under Colo. RPC 1.16 and the lawyer's obligations on termination (return of unearned fees, return of client file)
☐ The agreement explains how the client file will be released upon request (Colo. RPC 1.16A — Client File Retention; the client owns the file with limited exceptions)
☐ The agreement states the firm's file retention period (Colo. RPC 1.16A and Comments; consider matter type — criminal/probate/estate files often retained longer than civil)
☐ For contingent fee matters, the contingent fee agreement and proof of mailing of the final disbursement statement will be retained for at least 6 years (C.R.C.P. Ch. 23.3, Rule 4)
☐ Trust account records will be retained for at least 7 years (Colo. RPC 1.15D)

Part 14. Conflicts, Confidentiality, and Other Required and Recommended Disclosures

☐ Conflicts of interest — a conflict check has been completed (Colo. RPC 1.7, 1.9, 1.10) and the agreement addresses procedures if a conflict later arises
☐ Confidentiality — agreement acknowledges the duty under Colo. RPC 1.6
☐ Professional liability insurance — Colorado requires disclosure of malpractice insurance status on annual attorney registration; consider client-facing disclosure as best practice
☐ Use of generative AI — agreement discloses any intended use of generative AI in the representation, consistent with Colo. RPC 1.1 (competence), 1.6 (confidentiality), and 5.3 (responsibilities regarding nonlawyer assistance)
☐ Cybersecurity / electronic communication — agreement explains use of email, cloud storage, e-signature, and any associated risks
☐ 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 (Colo. RPC 1.2(a))
☐ Billing frequency and dispute resolution — agreement states billing cadence and the process for disputing a bill

Part 15. Fee Dispute Resolution

☐ The agreement identifies the firm's internal fee-dispute procedure, if any
☐ The agreement informs the client of voluntary fee mediation/arbitration options (e.g., local bar associations, the Colorado Bar Association Legal Fee Arbitration Committee), if applicable
☐ The agreement does NOT purport to waive the client's right to file a request for investigation with the Office of Attorney Regulation Counsel (OARC) or to pursue judicial remedies
☐ The agreement does NOT impose a pre-dispute mandatory binding arbitration clause for fee disputes without compliance with applicable ethics opinions (Colo. RPC 1.4, 1.8(h))

Part 16. Signature and Delivery Verification

☐ Engagement letter signed by the attorney
☐ Engagement letter signed by the client (or authorized representative) — required for contingent fee agreements under C.R.C.P. Ch. 23.3; best practice for all engagements
☐ A signed copy delivered to the client at the time the contract was entered into (required for contingent fee agreements)
☐ 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 17. Reviewer Certification

I have reviewed the above engagement letter for compliance with Colorado Rules of Professional Conduct 1.5, 1.15A through 1.15E, 1.16, 1.16A, related rules, and Chapter 23.3 of the Colorado Rules of Civil Procedure, 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 Attorney Registration No.: [________________________________]

Sources and References

• Colorado Rules of Professional Conduct (Colorado Bar Association portal)
• Colo. RPC 1.5 — Fees
• Colo. RPC 1.15A — General Duties of Lawyers Regarding Property of Clients and Third Parties
• Colo. RPC 1.15B — Account Requirements
• Colo. RPC 1.15C — Use of Trust Accounts
• Colo. RPC 1.15D — Required Records
• Colo. RPC 1.15E — Approved Institutions
• Colo. RPC 1.16A — Client File Retention
• Colorado Rules of Civil Procedure, Chapter 23.3 — Rules Governing Contingent Fees
• Office of Attorney Regulation Counsel — Trust Account Manual (Advanced Fees, Costs)
• Colorado Lawyer Trust Account Foundation (COLTAF)
• Office of Attorney Regulation Counsel (OARC)
• Rule Change 2024(18) — Amendments to Colo. RPC 1.15A-1.15E
• Rule Change 2025(28) — Amendments to Colo. RPC 1.5