Fee Agreement

What is a fee agreement?

A fee agreement is a document specifying how you will bill clients for your services. It details billing rates, payment terms, retainer requirements, and scope of work. Fee agreements protect both parties by setting expectations upfront. They may be standalone documents or incorporated into engagement letters. Clear fee agreements reduce billing disputes and collection problems.

Key elements to include

Specify hourly rates by timekeeper level or flat fees for defined scope. State when invoices will be issued and payment due dates. Describe how expenses are handled. Include late payment provisions and interest charges. Address what happens if scope changes. Clarify how either party can terminate the relationship. The more specific your agreement, the fewer disputes arise later.

Updating fee agreements

Review fee agreements annually and update rates as needed. Communicate changes before they take effect. For ongoing relationships, a simple letter confirming new rates may suffice. For new engagements, issue fresh agreements. Keep signed copies on file. When scope expands significantly, consider a new or amended agreement rather than relying on the original. Document all fee-related communications.