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Annual engagement letters

Am I mad?

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I'll admit I'm not as fastidious with my engagement letters as I should be, partly because of this I'm thinking of moving to annual engagement letters.

I think such a move would have a few benefits

It makes me review and update the engagement letters for changes, i.e. new services, MTD, AE, GDPR etc.

It reinforces to the client the work we have agreed to carry out, and any work which would cost extra. As well as putting a clear end date to the work we have agreed to carry out. Which would no doubt help in a disagreement with the client.

I think it would also help when making changes i.e. I have been trying to get all clients on gocardless, I'd make this mandatory on the next signup.

Finally, it provides a good opportunity to review fees.

The only potential downside I can see is it may make it easier for client to leave :D

Any extra admin work would be small and with eSigning it is quick and convenient for the client.


Go on, tell me I'm crazy.

Replies (11)

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By atleastisoundknowledgable...
02nd Dec 2019 07:52

You’re crazy

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By atleastisoundknowledgable...
02nd Dec 2019 07:59

Being serious, I do see the upsides, but I would be very worried clients would start seeing it a as short-term relationship, almost a transactional one, that each year they can search for quotes much like their insurance or lecky supplier.

In line with ACCA guidance, I think mine get renewed every 3 years. Depending on the type of client I might agree a modest price increase after 2 years, which means when they renew I can say that terms are the same as current (sneaky you might say, I say factual).

Why don’t you - as a one-off exercise - go through, & re-issue them all citing GDPR / change in legislation etc for the need. As part of that process also move everyone to GC.

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By Matrix
02nd Dec 2019 09:24

My view is that the engagement letter is to protect us, so if you feel you need to do this then go ahead. I prefer to spend time on chargeable work, in practice how often have you had to go back to the terms of the engagement letter in a dispute?

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Hallerud at Easter
02nd Dec 2019 10:29

As a client who is forever receiving engagement letters (we use a lot of different solicitors) we tend to find with my two employers that they dislike dealing with all this sort of stuff, viewing it as nonsense, and would likely view your more regular badgering of them to sign new documents like these as good reason to not use you.

Engagement letters are really more for the benefit of the firms who issue them rather than those who receive them, so starter for ten, no conferring, how many of your clients likely bother actually reading them?

Think of the clients (and the environment).

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Replying to DJKL:
By cathygrimmer
02nd Dec 2019 11:35

That's exactly what I was going to say. I'd hate it if I got engagement letters every year. But then I do read everything I sign so it would be time consuming!

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By Roland195
02nd Dec 2019 11:36

With a few exceptions, clients neither read nor care about the contents of an engagement letter and I believe the benefit of their use in resolving disputes is overstated.

I don't understand what you mean by a clear end date for one thing.

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blue sheep
02nd Dec 2019 16:36

stupid idea

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02nd Dec 2019 18:25

'Am I mad?'


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By pauljohnston
03rd Dec 2019 10:04

Suggest you look at Practice Ignition. This sends out a new Engagement letter with each proposal

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By itp3e
03rd Dec 2019 12:38

"I'm thinking of moving to annual engagement letters. Am I mad?"

solution: stop thinking.

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By hakfort
04th Dec 2019 07:51

We send annual engagement letters. It is time consuming, but allows you to review the fee, which is a worthwhile exercise. We use docusign to get the letters signed so there is minimal admin for the client.

Recent changes with GDPR etc mean that our engagement letter has changed over time, so this is a good reason in support of annual letters.

It is rare to have to refer to the engagement letter, but on the occasions where this has happened, I have always been glad to have an up to date version to hand. As with any contract you hope you never need to refer back to it, but it is essential where the client questions the service / fees / payment schedule.

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