The formation of an attorney-client relationship is generally memorialized by the client’s execution of an engagement letter drafted by the attorney. It is not uncommon for lawyers to present a proposed engagement letter to a prospective client, either by email or at an in-person meeting, with instructions that the client communicate any questions or concerns and, if not, to execute the engagement letter and provide any requested retainer. There is, to be sure, an inherent tension created by this arm’s-length negotiation of a contract at the inception of the relationship, where attorney and client are each trying to protect interests that might diverge. That said, it is not standard practice for lawyers to explain the terms of an engagement letter absent specific questions or concerns being raised. Nor do lawyers typically encourage their potential clients to obtain independent legal advice before agreeing to the terms in the engagement letter. But that might be about to change in New Jersey thanks to the Appellate Division’s unpublished opinion in Delaney v. Dickey, where the Appellate Division invalidated an arbitration provision in an engagement letter because the law firm did not sufficiently explain its ramifications to the client.

We urge the Supreme Court to grant the pending petition for certification and provide much needed guidance to the bar—on a going-forward basis—on how best to ensure that clients are adequately informed of the substance of an engagement letter. The Delaney decision calls into question whether and to what extent lawyers need to explain the terms of an engagement letter to their prospective clients, and whether lawyers must encourage prospective clients to obtain independent counsel before agreeing to the terms of engagement proposed by the lawyer.