Retention letters and outside counsel guidelines: differences between the two

Previous posts have mentioned outside counsel guidelines (See my posts of Aug. 1, 2006 that wonders about their effectiveness; Aug. 9, 2006 about certification by firms; Jan. 10, 2006 with an example; and Jan. 10, 2005 on retention or engagement letters and travel time.).

What haven’t been distinguished are the differences between guidelines and retention (engagement) letters. I define outside counsel guidelines as a generic statement of how a law firm should represent the client. It usually specifies such things as communications, bills, staff, decisions and generally acting in an ethical and responsible manner. By contrast, a retention letter governs a specific matter, and usually attaches important documents, but it mostly focuses on what the law department expects of the law firm on this specific matter.

Some companies conflate these documents. It is a better practice to limit retention letters to a specific case or matter and attach the outside counsel guidelines if the law firm is new in the service of the law department.