Egregious terms in law-firm engagement letters

The General Counsel of Serono Inc., Thomas G. Gunning, writes in the Boston Bus. J., Feb. 10, 2006 that engagement letters from law firms “are often signed as presented, without negotiation.” Well, that’s his view.

Gunning warns that lurking within those unexamined engagement letters may well be provisions that are completely unacceptable to a law department. For example, ensconced within the firms’ confirmatory letters might be the unfettered right to increase hourly rates, the assumption of prospective waivers of conflicts, and a broad right to use the client’s name in marketing materials.

Gunning advocates a rider, which he uses. He signs the firm’s engagement letter without change, but then requires the law firms to sign his rider without change (See my posts of Nov. 3, 2005 and May 19, 2006 regarding law firm engagement letters.). His rider supersedes any contrary points in the firm’s letter.

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