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Engagement Letter

An engagement letter is a written agreement between a lawyer and client that defines the scope of the legal representation, fee arrangements, billing practices, and terms governing the attorney-client relationship — and increasingly, the terms under which AI tools may be used in the representation.

Last reviewed: 2026/05/19

Definition

Why It Matters for Lawyers

How AI Tools Handle It

Frequently Asked Questions

Q1: Is an engagement letter legally required?
Formal engagement letter requirements vary by jurisdiction and matter type. Most state rules require written fee agreements for contingency arrangements. Many states require or strongly recommend written agreements for all matters. Even where not technically required, engagement letters are standard professional practice because they reduce disputes about scope and fees and protect both lawyer and client.
Q2: What should an AI use provision in an engagement letter say?
A straightforward provision might state: "We may use artificial intelligence software tools to assist with certain tasks in this representation, including legal research, document review, and drafting. All AI-generated work product is reviewed by supervising attorneys before being provided to you. We do not disclose your confidential information to AI tool vendors except subject to confidentiality obligations consistent with attorney-client confidentiality requirements." Customize to your specific tools and practice.
Q3: Should I charge separately for AI-assisted work?
Current guidance from bar associations is evolving. AI tools may reduce the time required for a task, which raises the question of whether a lawyer billing by the hour should bill fewer hours if AI compresses the work. Most ethics guidance holds that fees must be reasonable regardless of the efficiency tool used. Communicating with clients in the engagement letter about how AI efficiency affects billing — whether savings are passed through — manages expectations and reduces potential disputes. --- *Last reviewed: 2026-05-19 by LawyerAI Editorial Team.*

Related Concepts

Security

Conflict of Interest

A conflict of interest in legal practice arises when a lawyer's representation of one client is materially limited by responsibilities to another client, a former client, a third person, or the lawyer's own interests — requiring disclosure, consent, or withdrawal from the conflicted representation.

Capability

Conflict Check AI

Conflict check AI is software that automates the identification of potential conflicts of interest by searching a firm's client and matter database against new prospective client or adverse party information.

Security

Confidentiality (Legal AI Context)

In the legal AI context, confidentiality refers to the obligation of lawyers and legal AI vendors to protect client information from unauthorized disclosure, and to the technical and contractual measures that implement that protection when client data is processed by AI systems.

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Last reviewed: 2026/05/19. Definitions are written by the LawyerAI Editorial team. We do not accept affiliate commissions; Featured placement is clearly labeled and does not influence editorial content.

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© 2026LawyerAI Editorial

An engagement letter is a written agreement between a lawyer and client that defines the scope of the legal representation, fee arrangements, billing practices, and terms governing the attorney-client relationship — and increasingly, the terms under which AI tools may be used in the representation.

The engagement letter is the foundational document of the attorney-client relationship. It defines scope (which prevents scope creep and disputes about what the lawyer agreed to do), establishes fee expectations (which prevents billing disputes), and allocates responsibilities between lawyer and client. Most state bar rules explicitly or implicitly require written fee agreements for contingency matters and recommend them for all representations.

The engagement letter is also increasingly the appropriate place to address AI tool use. Bar associations and ethics committees are beginning to issue guidance suggesting that clients should be informed when AI tools will be used in their representations, and in some contexts, should affirmatively consent to AI-assisted work. The engagement letter is the natural vehicle for this disclosure.

AI-related provisions in engagement letters might address: (1) that AI tools may be used to assist with research, drafting, and document review; (2) that all AI output is reviewed by the supervising attorney before delivery; (3) confidentiality protections applied to client data submitted to AI tools; and (4) billing practices for AI-assisted work (whether AI efficiency savings are passed to the client).

Failure to address AI use in the engagement letter before using AI tools creates risk: if a client later objects to AI use, or if an AI tool produces an error that the client claims would not have occurred with purely human work, having a clear engagement-letter framework reduces the potential for dispute.

Practice management platforms like Clio, MyCase, and PracticePanther include engagement letter templates and document assembly features that streamline the letter creation and e-signature process. These tools can trigger the engagement letter workflow as part of new matter intake, ensuring the letter is executed before work begins.

DocuSign CLM and similar contract management tools enable electronic execution of engagement letters with full audit trail documentation, confirming execution date and time.

AI drafting tools can assist in preparing customized engagement letters for specific matter types, incorporating appropriate AI-use disclosure provisions and jurisdiction-specific requirements. Harvey AI and similar tools can generate engagement letter drafts for attorney review and customization.

For AI use provisions specifically, standard form engagement letters are beginning to appear in bar association resources and risk management guidance, providing templates that lawyers can adapt. Firms with active AI practices should review their standard engagement letter forms to ensure they address AI use in a manner consistent with their current tool deployment.

For a comparison of practice management platforms that support engagement letter workflows, see Clio vs. PracticePanther.