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Learn what to include in an engagement letter, how professional rules can vary, and how to adapt a practical sample for your client engagement.
Your client has approved the work and the fee, but the details are scattered. The scope is in a proposal, the deadline is in an email, and the approval process was discussed on a call. Once work begins, each side may be working from a different understanding of the agreement.
An engagement letter puts those terms in one place. It identifies the client, defines what you will and won’t do, explains fees and responsibilities, and sets out how the engagement can change or end.
This guide explains what to include, where professional requirements may differ, and how to adapt the sample for a US-based client engagement.
Disclaimer: This information is intended for general purposes only. It’s not legal advice and shouldn’t replace counsel from a licensed attorney.
Rules vary by state, profession, credential, service, and client. Check the rules and professional standards that apply to your engagement before using any sample.
Key takeaways
- Name the client and decision-makers: Use the correct legal names and identify who can give instructions or approve changes.
- Set clear boundaries: Describe the services, deliverables, exclusions, deadlines, and information the client must provide.
- Explain the money: State the fees, expenses, invoice schedule, payment timing, and how additional work will be priced.
- Plan for changes and endings: Explain how the engagement may change, renew, or end, including what happens to unfinished work and unpaid fees.
- Check the rules for your profession: Requirements can differ by state, credential, service, fee arrangement, and client.
- Treat the sample as a starting point: Adapt it to the engagement and obtain any professional or legal review you need.
What is an engagement letter?
An engagement letter sets out the working terms between a professional or firm and a client. It usually names the parties, describes the services and exclusions, explains each side’s responsibilities, covers fees and billing, and says how the engagement can change or end.
An engagement letter may also form a contract, but its title doesn’t decide that. Its legal effect depends on what it says, how the parties accept it, the law that applies, and any rules governing the profession. If you need to know whether a particular letter will be enforceable, have counsel review it and the proposed signing process.
Who sends the engagement letter
The professional or firm usually prepares and sends the engagement letter. The client, or an authorized representative, reviews and accepts its terms.
Before sending it, confirm who the client is and who has authority to approve the engagement. The person requesting the work may represent a parent company, subsidiary, owner, or another related party without being the client.
Suppose a parent company asks your firm to work for one of its subsidiaries. The letter should name the entity receiving the services, identify who’s responsible for payment, and say who can approve changes. If the engagement doesn’t include an officer, owner, affiliate, or other related party as a client, state that clearly.
What to put in an engagement letter
The sections below cover common engagement-letter terms, not a universal list of requirements. Add, remove, or revise them to match the service, the rules for your profession, and the law that applies.
Parties and client identity
Use the full legal names and contact details of the client and service provider. If the client is an organization, identify the people authorized to give instructions or approve changes.
If the work involves related people or companies, make clear who is and isn’t a client. For example, a consultant hired by one company in a corporate group shouldn’t suggest its affiliates are also clients unless the engagement is intended to include them.
Purpose, scope, and exclusions
Describe the services and deliverables in enough detail that both sides can tell what’s included. “General marketing support” is vague. “Prepare the campaign brief and three draft landing pages” gives the engagement a visible boundary.
Make important exclusions clear. If a tax engagement covers preparing a return but not representing the client during an audit, say so. If an agency engagement doesn’t include buying paid media, make that clear before the work begins.
For help handling work that falls outside the agreed scope, see how to avoid scope creep and manage change requests.
Responsibilities and client inputs
Spell out what each side needs to do. List the information, records, access, personnel, decisions, or approvals the client must provide, along with any deadlines that affect your work.
Explain what happens if an input arrives late. Depending on the engagement, the delivery date may move, work might pause, or the parties could need to approve a new schedule. Putting that process in the letter makes the effect of a delay clear before it happens.
Deliverables, timing, and acceptance
List each deliverable and the format in which the client will receive it. Give target dates or milestones, and identify any dates that depend on the client providing information, feedback, or approval.
If the client needs to review the work, name the person responsible, explain how feedback should be provided, and set a reasonable review period. Don’t add a clause that treats silence or a missed review deadline as acceptance unless counsel has reviewed it.
Fees, expenses, and billing
Explain how the fee will be calculated, whether it’s hourly, fixed, recurring, contingent, or based on another method allowed for the engagement. Include the rates or amounts, invoice schedule, payment deadline, taxes, deposits or retainers, and reimbursable expenses that apply.
Say how work outside the agreed scope will be priced and approved before it begins. If travel requires advance approval, an outside vendor will bill the client directly, or an expense will carry a markup, put that information in the letter.
The client shouldn’t have to search through the document to work out what they may be charged or when payment is due.
Communications, instructions, and approvals
Name the day-to-day contacts and identify who can approve changes to the scope, schedule, or price. Explain how formal notices and approvals should be delivered.
If the client has a large team, distinguish ordinary project feedback from approval to change the engagement. For example, if only the project sponsor can approve a fee increase, a request from another team member shouldn’t be treated as an approved change.
Changes to the engagement
Explain how either side can request a change and who must approve it. Before the changed work begins, record the revised scope, fee, and schedule in a written addendum, change order, or other approved format.
Don’t rely on a broad statement that all additional work will be billed. Describe how the request will be documented, how its effect on price and timing will be estimated, and how an authorized person will approve it. Keep the approved change with the original engagement letter.
Term, renewal, and termination
State when the engagement begins and what brings it to an end. If it runs for a fixed period, renews automatically, or continues until the work is complete, explain that clearly.
Describe how either side can end the engagement, how much notice is required, and what happens afterward. This may include paying for completed work, handling unfinished deliverables, and returning or transferring client materials.
Professional rules or applicable law may limit how certain engagements can be ended or require additional steps. Have any profession-specific termination language reviewed instead of assuming that a general services clause will fit.
Signatures, delivery, and retention
Add signature and date blocks for each person expected to accept the engagement. Explain how the client will receive a completed copy.
Separately, decide where your firm will store the signed letter, who needs access to it, and how long it must be kept under the professional rules, legal requirements, and internal policies that apply.
Electronic signing may be an option, but it doesn’t replace any requirements governing the letter’s content, acceptance, delivery, consent, or retention.
How professional rules change the letter
The checklist above is a starting point. Professional rules may require different terms, formats, approvals, or signing steps depending on the service and jurisdiction.
What lawyers should check
ABA Model Rule 1.5 says a lawyer must communicate the scope of the representation and how fees and expenses will be calculated. The rule prefers that information in writing and generally requires it before, or within a reasonable time after, the work begins. An exception applies when a regularly represented client is charged on the same basis or rate.
Changes to the basis or rate of the fee or expenses must also be communicated. Contingent-fee agreements follow stricter requirements, including a written agreement signed by the client and specific information about how the fee and expenses will be calculated.
The ABA rule is a model, not the governing rule in every state. Check the professional-conduct rules and other law in the jurisdiction where the lawyer practices.
Practice area matters too. ACTEC’s engagement-letter guide uses different forms and checklists for a range of trust-and-estate relationships, including individual, family, business, and fiduciary engagements. Use a current, reviewed resource for your practice area instead of copying a form designed for a different client relationship.
What accountants, auditors, tax professionals, and bookkeepers should check
Start with the type of work. An audit, tax return, bookkeeping project, and advisory engagement may follow different rules:
- PCAOB audits: If PCAOB AS 1301 applies, the auditor and audit committee need a shared understanding of the audit’s objective and who’s responsible for what. The standard calls for that understanding to be recorded in an audit engagement letter that’s provided each year and signed on the company’s behalf. It doesn’t apply to every accounting or bookkeeping service.
- Tax work: Circular 230 § 10.33 treats clear engagement terms as a best practice for tax advisors. The advisor should understand why the client needs the advice, how it will be used, and what the work will cover. It doesn’t say that every tax engagement must use a tax preparation engagement letter.
- AICPA resources: AICPA & CIMA’s Annual Tax Compliance Kit offers members different CPA engagement letter resources for different tax services. The kit’s public guidance recommends reviewing letters with legal counsel and considering input from the firm’s professional-liability insurer.
- Bookkeeping: The sources reviewed for this article didn’t identify a nationwide rule specifically requiring bookkeepers to use engagement letters. Use the general checklist as a starting point, then check the rules for your state, credentials, industry, and services.
What consultants and agencies should check
Focus on concrete outputs and decision points. For an agency engagement, that might mean stating how many concepts and revision rounds are included, who approves the work, whether media spending is excluded, and how adding another channel would affect the fee and schedule.
These are practical drafting choices, not a universal list of legally required terms. Adapt them to the services, client, and rules that apply to the engagement.
Signing an engagement letter electronically
For transactions covered by the E-SIGN Act, a signature, contract, or record cannot be denied legal effect solely because it’s electronic.
That doesn’t mean every electronic signature or engagement letter is automatically valid. The E-SIGN Act doesn’t require anyone to accept electronic records or signatures, and it doesn’t replace other requirements covering the letter’s content, consent, delivery, or retention.
Before sending an engagement letter electronically, check the rules for the profession and state, confirm that the parties will accept the signing method, and make sure everyone can receive and keep the completed letter.
Engagement letter sample
This example was written for this article as a starting point for a US-based professional-services engagement. It’s not a complete or approved form for every profession, service, or state. Replace every bracketed field, remove anything that doesn’t apply, and have the finished letter reviewed as needed.
[Service provider legal name]
Engagement letter for [client legal name]
Date: [date]
1. Client and service provider
This letter sets out the engagement between [service provider legal name] (“we”) and [client legal name] (“you”). [Identify any person or organization that is not a client, if needed.] Your authorized contact for instructions and approvals is [role or name]. Our contact is [role or name].
2. Purpose and scope
We will provide [specific services] and deliver [deliverables and format]. This engagement does not include [important exclusions].
3. Responsibilities and inputs
We will [provider responsibilities]. You will provide [records, access, decisions, personnel, or approvals] by [dates or milestones]. If a required input is delayed, [explain what happens to the schedule or whether work pauses].
4. Schedule and review
Work is expected to begin [date or trigger]. Target milestones are [milestones]. [Authorized reviewer] will provide consolidated feedback through [channel] within [review period]. [Describe the approval or acceptance process, if one applies.]
5. Fees, expenses, and billing
Fees will be calculated as follows: [method, rate, or amount]. We will invoice [schedule], and payment is due [payment term]. Expenses will be handled as follows: [categories, approval requirements, markup, or direct billing]. [Add any deposit, retainer, tax, late-payment, or work-pause terms that apply and have been reviewed.]
6. Communications and approvals
Day-to-day instructions may come from [contact]. Only [authorized person or role] may approve changes to the scope, fee, or schedule. Formal notices and approvals will be sent through [addresses or approved channel].
7. Changes
Either party may request a change in writing. Before the changed work begins, the parties will record the revised scope, fee, schedule, and approval in [an addendum, change order, or other reviewed format].
8. Term and ending the engagement
This engagement begins [date or trigger] and ends [date, completion event, or renewal terms]. It may be ended by [notice, method, and any profession-specific requirements]. When it ends, [explain how completed work will be paid for, how unfinished deliverables will be handled, and how client materials will be returned or transferred].
9. Other terms
[Add terms covering confidentiality, privacy, ownership of work, limits on who may rely on the work, liability, disputes, governing law, or records only when they are relevant and have been reviewed.]
10. Acceptance, delivery, and records
If these terms match your understanding, sign and date below. Each party will receive a completed copy through [delivery method]. The signed letter will be kept according to [applicable policy or requirement].
[Service provider legal name]
By: ____________________
Name and title: [name and title]
Date: [date]
[Client legal name]
By: ____________________
Name and title: [name and title]
Date: [date]
DISCLAIMER: These documents are provided to users as a starting point for convenience. Using a template is not a substitute for legal advice from a licensed attorney, and the information contained in the document therefore shouldn’t be construed as legal advice. Because the law differs in each legal jurisdiction and may be interpreted or applied differently depending on your location or situation, you shouldn’t rely on the materials provided here without first consulting an attorney about your specific situation. Dropbox Sign doesn’t make any representation as to the legal enforceability or effectiveness of any templates, or the resulting documents created using them.
A California example: attorney-fee agreements
California’s attorney-fee rules show why profession and state matter.
California Business and Professions Code § 6148 generally requires a written contract when the client’s expected total cost, including attorney fees, will exceed $1,000 USD. The contract must explain how the lawyer will be paid, the general nature of the legal services, and the responsibilities of the lawyer and client. When the contract is entered into, the lawyer must give the client a copy signed by both parties.
The rule has several exceptions, including certain emergency services, some repeat-client arrangements, a qualifying written waiver, and engagements where the client is a corporation.
Section 6147 separately governs contingency-fee agreements. It generally requires a written contract signed by both lawyer and client, a copy for the client, and specific information about the fee and costs.
If an agreement doesn’t meet the applicable section, the client may be able to void it, with the lawyer limited to collecting a reasonable fee. These are California rules for attorney-fee agreements, not general requirements for every engagement letter. California counsel should review the current statutes and related authority before a firm relies on this summary.
Send engagement letters with Dropbox Sign
If your firm regularly uses the same engagement letter template, Dropbox Sign templates let you prepare it once and reuse it. Add signature and date fields, pre-fill known client information, and update the scope, fees, and other details for each engagement.
Automated reminders can reduce manual follow-up, while status visibility shows which requests are complete and which still need attention.
Dropbox Sign doesn’t choose the terms, confirm that a signer has authority, or determine whether the engagement meets professional rules or applicable law.
For a related agreement workflow, see how to set up a retainer agreement.
Часто задаваемые вопросы (ЧаВо)
What’s in an engagement letter?
An engagement letter commonly identifies the parties, then covers scope and exclusions, responsibilities, deliverables, fees and expenses, billing, communications and approvals, changes, term and termination, and signatures, delivery, and retention. Applicable rules may add, remove, or alter terms.
Who gives the engagement letter?
It usually comes from the professional or firm and goes to the client for acceptance. Confirm that the sender and signer have authority, and be precise about the client when affiliates, owners, family members, or other related parties are involved.
Are engagement letters legally binding?
An engagement letter can form a contract, but the title alone doesn’t determine the result. Its terms, acceptance, applicable law, and any profession-specific requirements matter. Get legal advice for the jurisdiction and engagement instead of relying on a generic answer.
What should I write in an engagement letter?
Write the actual working agreement. Name the client, define the work and exclusions, allocate inputs and deliverables, explain fees and changes, and say how the relationship ends. Use the sample as a starting point, then verify the rules for your profession, service, state, and client.
Do all US professionals need the same engagement letter?
No. Engagement letters can vary by profession and credential, service, state, client type, fee method, signing method, delivery, and retention. Be sure to tailor your engagement letter to your specific needs.
Put the working agreement in one place
Before you send the letter, read it once from the client’s side. Can the client identify the deliverable, total cost method, person who can approve a change, and point when the engagement ends? Fix those practical gaps, then complete the profession-specific and legal review.
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