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Free engagement letter template (Word)

Reviewed by Clausery editors · · 3 min read

A formal letter from a professional (lawyer, accountant, consultant, designer) to a client setting out the scope of work, fees, responsibilities and terms of engagement.

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An engagement letter is the contract between a professional services provider and their client. Lawyers, accountants, consultants, bookkeepers, designers and other professionals use it to define scope, fees, responsibilities, conflicts, confidentiality and how either side can end the engagement.

For regulated professions (law, accounting) engagement letters are often required by professional rules. A good engagement letter prevents fee disputes and scope creep by spelling out exactly what is and is not included.

What to include#

  • Professional and client. Professional/firm name, address, contact; client name and address; date of letter.
  • Scope of services. Specific matter or project description, and what is included (e.g. audit, tax preparation, case representation, consulting) and explicitly excluded work (related matters, appeals, etc.).
  • Fees and billing. Hourly rates, flat fee, or contingency; retainer amount if any; billing frequency; payment terms (net 15/30); accepted payment methods; cost reimbursements (filing fees, travel).
  • Client responsibilities. Documents/information the client must provide, timeliness, truthfulness, and decisions only the client can make.
  • Other terms. Confidentiality, conflicts check (law firms), file retention, termination by either side, limitation of liability, dispute resolution/arbitration, governing law, and signature lines.

How to fill it in#

  1. Step 1: Send before work starts

    Have the engagement letter signed before you start billable work; do not rely on verbal go-aheads.

  2. Step 2: List inclusions and exclusions

    Be specific about what services are covered (e.g. 'drafting the operating agreement') and what is not (e.g. 'employment disputes').

  3. Step 3: State fees clearly

    Disclose hourly rates per timekeeper, flat fees, contingency percentages, and who pays costs.

  4. Step 4: Include termination

    State how either side can end the engagement (written notice) and how fees/work-in-progress are handled.

  5. Step 5: Sign and keep a copy

    Client signs and returns; retain the signed letter in the client file for the duration of the engagement.

Consulting agreement

Full consulting contract (similar scope; more clauses).

Retainer agreement

For ongoing monthly engagements.

Coaching agreement

A variant of engagement letter for coaches.

Statement of work

Project-specific scope document.

Free contract templates

Full contract template library.

Questions

Is an engagement letter a contract?

Yes — when signed by both sides it is a binding contract for services.

Do lawyers/accountants have to use one?

Most bar associations and accounting bodies require a written engagement for new clients/matters.

Can I change scope mid-engagement?

With a written change order or amendment signed by both sides — do not rely on email approval alone for significant changes.

How do I handle disputes over fees?

Engagement letters usually include arbitration/mediation clauses; many professional bodies offer fee-dispute resolution.

Do I need one for repeat clients?

Best practice is a new letter per matter or per year for ongoing work to keep scope current.

Browse all templates →

These are general templates, not legal or tax advice. Have anything unusual reviewed for your jurisdiction.

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