SAMPLE ENGAGEMENT LETTER (ALTERNATIVE FEE AGREEMENT FOR LAWYERS)

This Sample Engagement Letter covers alternative fee arrangements, including per service fees, flat fees, milestones, payment schedules, termination fees, hourly rates, guaranteed maximum fees, law firm protection thresholds, and law firm efficiency bonuses for a sample engagement letter.

Party 1 (You)

Name / Company

Individual / Company

Address 1

Address 2

City

State/Province

Zip

And Party 2 (Them)

Name / Company

Individual / Company

Address 1

Address 2

City

State/Province

Zip

Question 1 of 11

Question 2 of 11

Question 3 of 11

Question 4 of 11

Question 5 of 11

Question 6 of 11

Question 7 of 11

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Question 9 of 11

Question 10 of 11

Question 11 of 11

1 Services

SERVICES - (Party-1 Sells) - What are the Services?

	I will specify a short Services description here. Party-1 agrees to provide the following Services: What are the Services?
	I have a longer Services description/Specifications which I want to add as an exhibit (IF YOU SELECT THIS OPTION, THEN SCROLL IN THE RIGHT HAND PANEL TO THE END OF THE AGREEMENT, CLICK UNDERNEATH THE SIGNATURES, TYPE "EXHIBIT" AND PASTE IN YOUR SPECIFICATIONS). Party-1 agrees to provide all Services according to the "Specifications" in the attached exhibit, which is a part of this Agreement.

2 Term

TERM - LENGTH - How long is the term of the agreement?

Term length in years.

How many years do I want?

	1 year 1 year
	2 years 2 years
	3 years 3 years

I will specify how long.

How long?

3 Evergreen

TERM - EVERGREEN - Will the agreement automatically renew or not?

Yes, I want the term to renew automatically for additional consecutive 1 year terms until either party gives notice that the term ends 30 days before the year is over.

Immediately upon expiration this Agreement automatically renews on the same terms and conditions for additional successive periods of one (1) year on each anniversary of the Effective Date, unless either party gives the other party notice that the Agreement does not renew at least thirty (30) days before the end of the then applicable Term.

Any renewal term shall be mutually agreed to by the parties in writing.

4 Fee (Affiliates, Most Favored Customer Status, Assumptions and Fee Increases)

FEE - CONDITIONS (Party-1 Sells) - Do any assumptions, affiliate pricing, or most favored customer status conditions apply to the fee?

Affiliate Pricing - Party-2's affiliates pay the same fees that Party-2 pays under this Agreement.

If any affiliate of Party-2 gives notice to Party-1 of an offer to make a purchase from Party-1 under the same fees, terms and conditions stated in this Agreement, then Party-1 agrees to offer to accept each such offer. Under this Agreement, "affiliate" means: (a) any entity controlled by a party to this Agreement; or (b) any entity which controls a party to this Agreement; or (c) any entity controlling or under control of another entity described in (a) or (b). In this definition, "control" means owning or controlling the right to vote fifty one percent (51%) or more of the voting stock or voting equity interests of an entity.

Most favored customer status.

	Overall deal. Party-1 represents that all terms and conditions Party-1 grants to Party-2 under the Agreement are at least as favorable as those Party-1 offers to any of its other customers. If Party-1 contracts with any other customer and provides materially more favorable terms or conditions than are contained in this Agreement, Party-1 agrees to so notify Party-2 in writing within ten (10) days and to offer Party-2 those materially more favorable terms and conditions under the same terms and conditions offered to the other customer.
	Overall deal for similar sales at similar volume levels. Party-1 represents that all terms and conditions Party-1 grants to Party-2 under the Agreement are at least as favorable as those Party-1 offers to any of its other customers for similar sales at similar volume levels. If Party-1 contracts with any other customer and provides materially more favorable terms or conditions for similar sales at similar volume levels than are contained in this Agreement, Party-1 agrees to so notify Party-2 in writing within ten (10) days and to offer Party-2 those materially more favorable terms and conditions under the same terms and conditions offered to the other customer.
	Overall pricing. Party-1 represents that all fees Party-1 charges Party-2 under the Agreement are at least as favorable as those Party-1 offers to any of its other customers. If Party-1 contracts with any other customer and provides materially more favorable fees than are contained in this Agreement, Party-1 agrees to so notify Party-2 in writing within ten (10) days and to offer Party-2 those materially more favorable fees under the same terms and conditions offered to the other customer.
	Overall pricing for similar sales at similar volume levels. Party-1 represents that all fees Party-1 charges Party-2 under the Agreement are at least as favorable as those Party-1 offers to any of its other customers for similar sales at similar volume levels. If Party-1 contracts with any other customer and provides materially more favorable fees for similar sales at similar volume levels than are contained in this Agreement, Party-1 agrees to so notify Party-2 in writing within ten (10) days and to offer Party-2 those materially more favorable fees under the same terms and conditions offered to the other customer.

Assumptions and Fee Increases.

	Does Party-2 have to do anything in advance so that Party-1 can meet the deadline? As a condition precedent to Party-1 charging the fees stated in this Agreement, Party-2 shall meet the following requirements: What must Party-1 do?
	Fee increases due to Party-2 not meeting the above requirements. If Party-2 fails to meet these requirements, and this failure causes Party-1 to incur additional documented hours to perform under this Agreement, then Party-1 may charge Party-2 for these additional hours as follows: What are the fee increases?

5 Fee (Early Payment Discount)

FEE - EARLY PAYMENT DISCOUNT (Party-1 Sells) - Does Party-1 receive an early payment discount for early payments?

10 days, 2% discount.

If Party-2 pays within ten (10) days of the date of Party-2's receipt of an invoice, then Party-1 will deduct from the next invoice a credit equal to two percent (2%) of the invoiced amount.

15 days, 2% discount.

If Party-2 pays within fifteen (15) days of the date of Party-2's receipt of an invoice, then Party-1 will deduct from the next invoice a credit equal to two percent (2%) of the invoiced amount.

I will specify the days and discount.

If Party-1 pays within

To earn the discount, customer must pay the fee within how many days?

days of the date of Party-1's receipt of an invoice, then Party-2 will deduct from the next invoice a credit equal to the following percentage of the invoiced amount:

What is the discount percentage?

No discount for early payment.

6 Expenses (Party-2 Reimburses)

EXPENSES (Party-2 Reimburses) - Will Party-2 reimburse Party-1's expenses?

	Yes. Party-2 agrees to reimburse Party-1 for travel, materials and supplies and other reasonable out-of-pocket expenses incurred under this Agreement if: (a) Party-2 pre-approves the expenses in writing; and (b) Party-1 Personnel submit receipts and other appropriate documentation substantiating the expenses, including an itemized expense statement included with Party-1's invoice.
	No.

7 Warranty Length (Services)

WARRANTY LENGTH (Services) - How long should the warranty last?

	30 day warranty. For a period of thirty (30) days after receipt, the Services conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind.
	90 day warranty. For a period of ninety (90) days after receipt, the Services conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind.
	1 year warranty. For a period of one (1) year after receipt, the Services conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind.
	No time limit. The Services conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind.

8 Subcontractors

SUBCONTRACTORS - Can one or both of the parties subcontract any responsibilities?

	Party-1 can subcontract with Party-2's consent, and Party-2 can subcontract without Party-1's consent. Party-1 may not subcontract any obligation under this Agreement without Party-2's prior written consent. Party-2 can subcontract without Party-1's consent. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	Party-2 can subcontract with Party-1's consent, and Party-1 can subcontract without Party-2's consent. Party-2 may not subcontract any obligation under this Agreement without Party-1's prior written consent. Party-1 can subcontract without Party-2's consent. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	Either party can subcontract with the other party's consent. Neither party can subcontract any obligation under this Agreement without the other party's prior written consent. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	Both parties can subcontract without the other party's consent. Both parties are free to subcontract their obligations under this Agreement. Each party is responsible for its subcontractors' compliance with and breach of this Agreement as if the subcontractors' acts and omissions were the party's own.
	No subcontracting. The parties may not subcontract any of their obligations under this Agreement.

9 Governing Law

GENERAL - GOVERNING LAW - Which state or country's laws govern this contract?

10 Forum, Venue or Jurisdiction

GENERAL - FORUM - Which state or country is the forum for this contract?

11 Assignment

GENERAL - ASSIGNMENT - Do I want both parties to be able to assign this Agreement, just Party-1, or not allow any assignments?

Both parties.

Broad right to assign.

Any of the parties may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party.

Limited right to assign to a third party buying a party's (to this Agreement) shares or assets.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by any party in whole or in part without the prior written consent of the other party (or parties). Any transfer, assignment, delegation or sublicense by a party without such prior written consent is invalid. However, any party may assign this Agreement to a third party purchasing: (a) majority control of the party's equity shares; or (b) all or substantially all of either (i) a party's assets or (ii) the assets of the party's relevant business unit under this Agreement.

Just Party-1.

Broad right to assign.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by Party-2 in whole or in part without the prior written consent of Party-1. Any transfer, assignment, delegation or sublicense by Party-2 without Party-1's prior written consent is invalid. Party-1 may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party.

Limited right to assign to a third party buying a party's (to this Agreement) shares or assets.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by Party-2 in whole or in part without the prior written consent of Party-1. Any transfer, assignment, delegation or sublicense by Party-2 without Party-1's prior written consent is invalid. Party-1 may assign this Agreement. Party-1 may assign this Agreement to a third party purchasing all or substantially all of Party-1's assets or the assets of the relevant Party-1 business unit under this Agreement.

No assignments.

This Agreement is not assignable, delegable, sublicenseable or otherwise transferable by either party in whole or in part without the prior written consent of the other party. Any transfer, assignment, delegation or sublicense by a party without the other party's prior written consent is invalid.

"Services" are acts that a party is performing under an agreement for payment. "Services" are not goods or deliverables, which are the tangible results of the services. For example, if a consultant is engaged to meet with and better understand a customer's manufacturing system and then provide a written report summarizing how to improve the system, the meeting and understanding would be the services, while the report itself would be a deliverable.

The "Term" means how long the contract will be in force.

An "Evergreen" term, also referred to as an "Automatic Renewal" means that once the term comes to a certain date in the future, it automatically extends for an additional time period or repeated additional time periods until either party sends notice that the term does not renew anymore.

"Affiliates" means a party's parent, subsidiary, or related business associations that, in future purchases, could receive the same pricing under this contract, and "Most Favored Customer Status" means that a customer is receiving a deal from a vendor which is just as good or better than any other deal the vendor has with any other customer, and "Assumptions" means requirements a customer must meet or the vendor will have to perform extra work and as a result will need to increase the fees.

A vendor may offer a discount off the invoice if the invoice is paid early so the vendor has its money sooner.

Expenses incurred by a vendor are sometimes reimbursed by a customer, and this cost is over and above the fees under the Agreement.

The "Warranty Length" refers to how long the Services and/or Deliverables will perform as expected.

A "Subcontractor" is a third party who one of the signing parties wants to perform some of its responsibilities under the Agreement, such as providing a Service or Deliverable.

The "Governing Law" is the particular state or country's laws that you choose to apply to this contract. Often times, the governing law is the state or country within which one or both of the parties have a main office, or where they are conducting business under the contract.

"Forum", "Venue" or "Jurisdiction" refers to where disputes between the parties must be litigated. Often the parties will still be free to seek injunctions or other temporary relief outside of the forum as they see fit.

"Assignment" means the right to transfer the contract, or a right or obligation under the contract, to a third party. Usually, this is prohibited or limited to a third party buying the shares or assets of a party to the contract.

Comments:

[WARNING: THIS AGREEMENT AND ALL QUESTIONS ARE OFFERED AS SAMPLES ONLY. USE OF THIS AGREEMENT IS BY YOU AT YOUR DIRECTION, IS NOT DIRECTED BY WHICHDRAFT.COM, AND IN NO WAY CONSTITUTES LEGAL ADVICE. WHICHDRAFT.COM RECOMMENDS THAT ANYONE ENTERING INTO A CONTRACT CONSULT AN ATTORNEY FOR LEGAL ADVICE. THE COPYRIGHT IN THIS CONTRACT IS OWNED BY RADIO FREE CONTRACTS LLC.]

March 11, 2010 (the "Effective Date")

,
("Party-1")

,
("Party-2")

RE: Law Firm Matter Engagement Letter Agreement ("Agreement")

To Whom It May Concern:

This Agreement describes Party-1 providing legal Services to Party-2. We agree as follows:

1. DEFINITIONS.

(a) "Government Authority" means any governmental authority or court, tribunal, agency, department, commission, arbitrator, board, bureau, or instrumentality of the United States of America or any other country or territory, or domestic or foreign state, prefecture, province, commonwealth, city, county, municipality, territory, protectorate or possession.

(b) "Law" means all laws, statutes, ordinances, codes, regulations and other pronouncements having the effect of law of any Government Authority.

(c) "Services" means the services Party-1 provides to Party-2 as described in this Agreement.

2. SERVICES. Party-1 agrees to provide the following Services: [QR-84]

3. TERM AND TERMINATION.

(a) Term. The term of this Agreement (together with any renewals, the "Term") begins on the Effective Date and expires one (1) year [QR-24] later. Immediately upon expiration this Agreement automatically renews on the same terms and conditions for additional successive periods of one (1) year on each anniversary of the Effective Date, unless either party gives the other party notice that the Agreement does not renew at least thirty (30) days before the end of the then applicable Term. [QR-18]

(b) Survival. The "Survival and "General" sections, as well as the responsibility to pay any amounts due under this Agreement, survive any termination, expiration or non-renewal of this Agreement.

(c) Termination. This Agreement may be terminated at any time by either party for its convenience, with or without cause, and for any reason or no reason, effective upon the non-terminating party's receipt of notice.

4. TIMING.

[Option 1] Deadline. Party-1 agrees to complete all Services by [_______].

[Option 2] Milestones. Party-1 agrees to complete each Service as described for each milestone in the table below by the dates indicated:

Services and Milestones Description	Date
Party-1 must provide the following Service by the following milestone: [____]
Party-1 must provide the following Service by the following milestone: [____]
Party-1 must provide the following Service by the following milestone: [____]

5. FEE.

[Option 1] Per Service Fee. Party-1 can invoice Party-2 for the fee indicated below for each Service on the date completed:

Service Description	Fee
Service: [_____]	$
Service: [_____]	$

[Option 2] Flat Fee. Party-2 agrees to pay Party-1 a flat fee of [$_____].

[Option 3] Flat Fee, Milestones, and Payment Schedule. Party-2 agrees to pay Party-1 a flat fee of [$_____]. Party-2 agrees to pay Party-1 per the payment schedule indicated:

Services Milestones and Payment Schedule	Date
Party-1 may invoice Party-2 for [X%] of the fee on the Effective Date.
Party-1 may invoice Party-2 for [X%] of the fee upon the following milestone: [____]
Party-1 may invoice Party-2 for [X%] of the fee upon the following milestone: [____]
Party-1 may invoice Party-2 for [X%] of the fee upon the following milestone: [____]

[Option 4] Flat Fee, Milestones, Payment Schedule and Termination Fee. Party-2 agrees to pay Party-1 a flat fee of [$_____]. Party-2 agrees to pay Party-1 per the payment schedule below, and also agrees to pay Party-2 the termination fee noted below if Party-2 terminates this Agreement for convenience (the termination fee does not apply if Party-2 terminates this Agreement for Party-1's breach):

Services Milestones and Payment Schedule	Date	Termination Fee
Party-1 may invoice Party-2 for [X%] of the Flat Fee on the Effective Date.
Party-1 may invoice Party-2 for [X%] of the Flat Fee upon the following milestone: [____]
Party-1 may invoice Party-2 for [X%] of the Flat Fee upon the following milestone: [____]
Party-1 may invoice Party-2 for [X%] of the Flat Fee upon the following milestone: [____]

[Option 5] Hourly Rate. Party-2 agrees to pay Party-1 the product of the total number of hours of Services performed by each Party-1 employee multiplied by the appropriate hourly rate in the table below.

Law Firm Employees	Hourly Rate
Senior Partner	[$________]
Partner	[$________]
Senior Associate (more than 4 years legal practice)	[$________]
Mid-Level Associate (3-4 years legal practice)	[$________]
Junior Associate (less than 3 years legal practice)	[$________]
Paralegal	[$________]

[Option 6] Guaranteed Maximum Fee. Party-2 agrees to pay Party-1 the lesser of: (i) a fee of [$_____]; or (ii) the product of the total number of hours of Services performed by each Party-1 employee multiplied by the appropriate hourly rate in the table below.

Law Firm Employees	Hourly Rate
Senior Partner	[$________]
Partner	[$________]
Senior Associate (more than 4 years legal practice)	[$________]
Mid-Level Associate (3-4 years legal practice)	[$________]
Junior Associate (less than 3 years legal practice)	[$________]
Paralegal	[$________]

[Option 7] Guaranteed Maximum Fee With Law Firm Protection Thresholds. Party-2 agrees to pay Party-1 the lesser of: (i) a fee of [$_____]; or (ii) the product of the total number of hours of Services performed by each Party-1 employee multiplied by the appropriate hourly rate in the table below. However, if Party-1 incurs [__] hours (the "First Threshold"), then Party-1 may further invoice Party-2 for each additional hour incurred above the First Threshold at [50%] of the applicable hourly rate. If Party-1 incurs [__] hours (the "Second Threshold"), then Party-1 may invoice Party-2 for each additional hour incurred above the Second Threshold at [75%] of the applicable hourly rate. If Party-1 incurs [__] hours (the "Third Threshold"), then Party-1 may invoice Party-2 for each additional hour incurred above the Third Threshold at [100%] of the applicable hourly rate.

Law Firm Employees	Hourly Rate
Senior Partner	[$________]
Partner	[$________]
Senior Associate (more than 4 years legal practice)	[$________]
Mid-Level Associate (3-4 years legal practice)	[$________]
Junior Associate (less than 3 years legal practice)	[$________]
Paralegal	[$________]

[Option 8] Guaranteed Maximum Fee With Law Firm Efficiency Bonus. Party-2 agrees to pay Party-1 the product of the total number of hours of Services performed by each Party-1 employee multiplied by the appropriate hourly rate in the table below (the "Billable Hours Fee"), which may not exceed [$____] (the "Maximum Fee"). If the Maximum Fee is greater than the Billable Hours Fee, then Party-2 agrees to pay Party-1 [25%] of the difference.

Law Firm Employees	Hourly Rate
Senior Partner	[$________]
Partner	[$________]
Senior Associate (more than 4 years legal practice)	[$________]
Mid-Level Associate (3-4 years legal practice)	[$________]
Junior Associate (less than 3 years legal practice)	[$________]
Paralegal	[$________]

6. CONDITIONS. Except as expressly stated in this Agreement, there are no additional fees, charges or expenses incurred. As a condition precedent to Party-1 charging the fees stated in this Agreement, Party-2 shall meet the following requirements: [QR-90] If Party-2 pays within ten (10) days of the date of Party-2's receipt of an invoice, then Party-1 will deduct from the next invoice a credit equal to two percent (2%) of the invoiced amount. [QR-91] [QR-88]

7. INVOICES AND TAXES. Party-2 agrees to pay to Party-1 all fees owed under this Agreement within thirty (30) days after the date of Party-2's receipt of a complete invoice. A complete invoice is one that contains the invoice number, invoice date, description of the transaction, total invoice amount with miscellaneous charges listed separately and payment terms consistent with and not additional to any provisions under this Agreement. To the extent that the transactions under this Agreement are subject to any sales, use, value added or any other taxes, payment of these taxes, if any, is Party-2's responsibility. Party-1 is liable for any and all taxes on any and all income it receives under this Agreement.

8. WARRANTIES.

(a) Mutual Warranties. Each party represents, warrants and covenants to the other that:

(i) General. It: (a) is a company duly organized and validly existing and in good standing under the Laws of its jurisdiction of organization; (b) is qualified or licensed to do business and in good standing in every jurisdiction where qualification or licensing is required; and (c) has the corporate power and authority to negotiate, execute, deliver and perform its obligations under this Agreement.

(ii) Law Compliance. It complies with all applicable Laws.

(b) Warranties by Party-1. Party-1 represents, warrants and covenants to Party-2 that:

(i) Warranty Length. For a period of thirty (30) days after receipt, the Services conform to the requirements of this Agreement, are free from any defect in material and workmanship, and are free of all liens, claims and encumbrances of any kind. [QR-82]

(c) Disclaimer. EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, PARTY-1 AND PARTY-2 EACH MAKE NO REPRESENTATIONS AND EXTEND NO WARRANTIES OR COVENANTS OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.

9. GENERAL. Entire Agreement and Amendments. This Agreement is the entire agreement between the parties and supersedes all earlier and simultaneous agreements regarding the subject matter, including, without limitation, any invoices, business forms, purchase orders, proposals or quotations. This Agreement may be amended only in a written document, signed by both parties. Independent Contractors, Third Party Beneficiaries, and Subcontractors. The parties acknowledge that they are independent contractors under this Agreement, and except if expressly stated otherwise, none of the parties, nor any of their employees or agents, has the power or authority to bind or obligate another party. Except if expressly stated, no third party is a beneficiary of this Agreement. The parties may not subcontract any of their obligations under this Agreement. [QR-63] Governing Law and Forum. All claims regarding this Agreement are governed by and construed in accordance with the Laws of TEXTFIELD [QR-27], applicable to contracts wholly made and performed in such jurisdiction, except for any choice or conflict of Law principles, and must be litigated in TEXTFIELD [QR-28], regardless of the inconvenience of the forum, except that a party may seek temporary injunctive relief in any venue of its choosing. The parties acknowledge and agree that the United Nations Convention on Contracts for the International Sale of Goods is specifically excluded from application to this Agreement. Assignment. This Agreement binds and inures to the benefit of the parties' successors and assigns. Either party may assign, delegate, sublicense or otherwise transfer this Agreement, or any right or obligation under this Agreement, to a third party. [QR-46] No Waivers, Cumulative Remedies. A party's failure to insist upon strict performance of any provision of this Agreement is not a waiver of any of its rights under this Agreement. Except if expressly stated otherwise, all remedies under this Agreement, at Law or in equity, are cumulative and nonexclusive. Severability. If any portion of this Agreement is held to be unenforceable, the unenforceable portion must be construed as nearly as possible to reflect the original intent of the parties, the remaining portions remain in full force and effect, and the unenforceable portion remains enforceable in all other contexts and jurisdictions. Notices. All notices, including notices of address changes, under this Agreement must be sent by registered or certified mail or by overnight commercial delivery to the address set forth in this Agreement by each party. Captions and Plural Terms. All captions are for purposes of convenience only and are not to be used in interpretation or enforcement of this Agreement. Terms defined in the singular have the same meaning in the plural and vice versa.

ACKNOWLEDGED AND AGREED:

PARTY-1

By: __________________________________
Print Name: ___________________________
Title: ________________________________

PARTY-2

By: __________________________________
Print Name: ___________________________
Title: ________________________________