Lease Review - To Be Formed Entity
Drumm Law Engagement Letter for
Thank you for choosing Drumm Law, LLC to serve as your counsel. Please review this Engagement Letter and the attached Terms and Conditions. If you have any questions, please let us know. Otherwise, please return the signed Engagement Letter along with any required retainer. Again, we are pleased to have the opportunity to work with you.
The individual signing this Engagement Letter has requested the legal services described in this Engagement Letter on behalf of a to-be-formed entity. Until the to-be-formed entity is functioning, our client will be the individual signing this Engagement Letter who will be solely responsible for payment of our invoices for services. When the to-be-formed entity is legally formed, our only client will be the to-be-formed entity and we will no longer represent the individual who has signed this Engagement Letter, or any of the persons who formed the entity in any manner.
Review and negotiate a lease with up to three rounds of negotiations for the lease for a fixed flat fee of $3,500. We also may provide any additional services requested by you and expressly agreed to by us in writing. Any legal services which we render will be billed on an hourly basis (in accordance with our standard billing procedures) or flat fee basis (if we have agreed in writing to a flat fee arrangement).
Fixed Flat Fee Legal Services
You have engaged our firm to review a Franchise Disclosure Document (“FDD”) and Franchise Agreement.
For a fixed flat fee of , we have agreed to review the FDD and Franchise Agreement (and multi-unit agreement, if applicable), and provide to you a list of red flag issues. We will provide to you a written analysis and spend up to one (1) hour with you to discuss our analysis and answer any questions you have. We are not reviewing the documents for legal issues that are specific to the industry in which the franchisor operates. We also will not be performing any due diligence on the franchisor itself. If you wish for us to perform any of these services, we will be happy to do so. Any such additional review that we provide at your request, will be considered general legal services, and billed hourly as described below.
General Legal Services
In addition to the fixed flat fee legal services described above, we also may provide any additional services requested by you and expressly agreed to by us in writing. Any legal services which we render will be billed on an hourly basis (in accordance with our standard billing procedures) or flat fee basis (if we have agreed in writing to a flat fee arrangement). Typical franchisee related legal services may include:
-Prepare a list of issues to send to your Franchisor-Help you negotiate with Franchisor-Draft any addenda-Provide corporate structuring consultation-Prepare corporate documents
If we have agreed to a fixed flat fee for certain of our legal services, it will be noted above in the Legal Services description.* Otherwise, you will be billed as described below. Our billing rates for our attorneys vary according to the experience of the individuals. The rates for our attorneys currently range between $275 and $405 per hour and paralegals are $165 per hour. Hourly rates are subject to change from time to time to reflect current levels of legal experience and other factors. We record our time in units of tenths of an hour. We view such rates as a benchmark, and not as the sole determining factor for the value of our services for billing purposes. The amount of our billing statement will be the fair value of the services as determined by the billing attorney, taking into account the time records for the matter, the types of services we have been asked to perform, any special level of experience required, the size and scope of the matter, results obtained and other relevant circumstances. In accounting for the hours attributable to an assignment, the billing attorney will also take into consideration efficiencies and value resulting from the firm’s technology and other resources that provide benefit to the client that is greater than would be reflected in the hourly rate of the individual attorney involved. All payments must be made by check, echeck credit card, our online billing system, or similar methods.
We will charge for all time spent in representing your interests, including by way of illustration: telephone and office conferences with clients, representatives of clients, opposing counsel; conferences among our legal and paralegal personnel; factual investigation; legal research; responding to your requests for us to provide information to your auditors in connection with review or audits of financial statements; drafting letters and other documents.
*If our representation terminates before completion of any fixed flat fee services (or between completion of any increment of the fixed flat fee services, if applicable), you will pay, and we will be entitled to, the portion of the fee earned up to the time of termination. The fee will be based on our current hourly rates for the number of hours conducted by us on the specific fixed flat fee services (or increment, if applicable) up to the date of termination. However, the fee will not exceed the amount that would have been earned had our representation continued until the completion of the fixed flat fee services (or any increment, if applicable).
In addition to legal fees, you will be billed for all costs and expenses incurred in the course of our representation, such as shipping charges, printing costs and filing fees. We may require an additional retainer before we incur expenses on your behalf.
Unless we have made other arrangements (which will be noted by a $0 in the requested retainer amount), we are requesting a retainer of:
Retainer Amount –
It is intended that the retainer will be held and used as a security deposit until the matter to which our representation relates concludes, to be applied to payment of your final invoice for all outstanding costs, expenses, and fees for legal services. However, at our option, we may choose to apply the retainer to your monthly invoices for costs, expenses and fees for legal services, and you hereby authorize us to withdraw sums from the trust account to pay such amounts. If we apply the retainer to your monthly invoices, we may require you to replenish the retainer. The retainer is not an estimate or reflection of what the total costs, expenses and fees for legal services will be and you are responsible for all amounts owed above the retainer. Any portion of the retainer not used for costs, expenses, and fees for legal services, if any, will be refunded to you when our representation in the matter(s) described above conclude. The retainer will be deemed fully earned for any fixed flat fee when the legal product or service has been delivered. As required by the rules of professional conduct, any retainer that you provide us will be deposited into the firm’s account with the Colorado Lawyer Trust Account Foundation (“COLTAF”), and COLTAF will receive any interest generated by the retainer. We may deduct fees, costs and expenses from the retainer as fees are earned or costs and expenses are incurred or we may hold the retainer as a deposit against future work. We will refund to you any balance of the retainer remaining after the representation has concluded.
Because there is generally a time lag between the performance of our services and the invoicing of those services, your billing statements are due and payable upon receipt. We ask and expect payment of our invoices on a current basis, as delayed payment adds to our overall costs of providing services. Invoices are generally sent out monthly for the previous month’s fees and expenses. Unless we have made other arrangements, if an invoice is not paid within 15 days after the statement date, interest will be charged on the principal balance (fees, costs and expenses) shown on the invoice. Interest will be calculated by multiplying the unpaid balance by the periodic rate of 1.5% per month. The unpaid balance will bear interest until paid. Should invoices not be paid on a timely basis, we reserve the right to suspend providing professional services or to withdraw from representation, subject to any applicable legal-ethics constraints. In addition, by signing this Engagement Letter client agrees that Drumm Law, LLC shall withdraw from this representation immediately and cease all work and billing should client enter bankruptcy proceedings of any type.
Drumm Law, LLC is a law firm which has represented, and continues to represent, many different corporate and individual clients with various business interests in numerous industries. You agree that, subject to our professional responsibilities, we may represent any other company operating in your same industry, even if that company is a direct competitor of yours. It is possible that, during the time we are representing your interests in this matter, you may become involved in transactions and/or disputes in which your interests are adverse to those of one of the firm’s present or future clients. If such a conflict were to arise between your interests and those of another present or future client of the firm, the firm will apprise you of that fact, but reserves the right to represent the interests of the other client with respect to that particular matter.
Therefore, as a specific condition to our undertaking your representation, you understand and agree that this firm may continue to represent or may undertake in the future to represent existing or new clients in any matter that is not substantially related to our work for you even if the interests of such clients in those other matters are directly adverse. We agree, however, that your prospective consent to conflicting representation contained in the preceding sentence shall not apply in any instance where, as a result of our representation of you, we have obtained proprietary or other confidential information of a nonpublic nature, that, if known to such other client, could be used in any such other matter by such client to your material disadvantage.
TERMS AND CONDITIONS
You agree that our legal services will be limited to the scope of work outlined in the Engagement Letter. If you request that we perform legal services beyond this scope of work, and we agree in writing to perform such work, you agree that such work will be in addition to the scope outlined above and shall be billed at our then-prevailing hourly rates or fixed rate service fees (if we provide you a fixed rate fee in writing for such additional services), whichever is applicable.
ENTITY AS CLIENT
If you are an entity, your legal entity will be our client and not the any individual organizer, owner, member, manager, officer or director of that legal entity. It is important that you understand that the corporate interests may not always be identical to the interests of the organizers, owners, members, managers, officers or directors and that the interests of any such individual may not always be identical to the interests of the other individuals. Therefore, each organizer, owner, member, manager, officer and director should carefully consider retaining independent counsel to provide separate advice and representation.
We cannot effectively represent you without your cooperation and assistance. You agree to cooperate fully with us and to provide promptly all information known or available that is relevant to our representation. You also agree to pay our statements for services and expenses. It is important that you retain all communications from and to us, including e-mails and attachments to e-mails.
WITHDRAWAL FROM REPRESENTATION
We may withdraw our representation either with your consent or for good cause. Good cause includes nonpayment of our fees and expenses, your failure to honor the terms of this Engagement Letter or to cooperate or follow our advice on a material matter, or any fact or circumstance would, in our view, render our continuing representation unlawful, unethical or ineffective.
Our policy is to scan and otherwise digitize all file materials, and to use and retain as little paper as possible. We therefore ask that if you, for some reason, require that paper files be kept that you notify us of that requirement at the outset (i.e. before you sign this Engagement Letter) so we may make proper arrangements. After our representation is over and all past due invoices have been paid in full, we will, upon request, provide you with a digital link or other digital storage device that contains all of your information in digital form. Our own files, including lawyer work product (including e-mails) pertaining to your matters will be retained by the firm. Again, we keep no paper (including trademark registration certificates) except for documents that absolutely require paper originals (e.g. promissory notes) unless we have made other arrangements.
Drumm Law, LLC does not provide tax advice of any kind or nature whatsoever. If your specific legal issue involves tax advice, you must separately retain a tax attorney or certified public accountant regarding those matters.
Either of us may terminate the engagement at any time for any reason by written notice, subject on our part to applicable rules of professional conduct.
In order to avoid litigation in the event of any such dispute concerning any billings submitted by our firm, we mutually agree that any such dispute shall be submitted to mandatory binding arbitration. Such arbitration shall be conducted in Denver, Colorado pursuant to the Colorado Uniform Arbitration Act of 1975 and the Commercial Rules of the American Arbitration Association. The decision of the arbitrator(s) shall be final and binding on the parties. All disputes arising hereunder shall be governed by, construed and determined under the laws of the State of Colorado. Any unenforceable provision of this Engagement Letter and Terms and Conditions will be severed from this Engagement Letter and Terms and Conditions, and the remainder will be enforced to the fullest extent possible.
As to any claim or dispute arising out of or connected with our services, other than a fee dispute covered by the preceding paragraph, we mutually agree to attempt in good faith to settle the dispute by non-binding mediation in Denver, Colorado before commencing any legal action or other dispute resolution procedure. Unless we otherwise agree, the mediation will be conducted under the then current Center for Public Resources (366 Madison Avenue, New York, N.Y.) Mediation Procedures for Business Disputes. Either of us may commence mediation by letter requesting mediation delivered to the other party and to the Center for Public Resources (“CPR”). In the event we fail to agree upon a neutral mediator within ten (10) working days after the mediation request is delivered, either of us can apply to CPR to appoint a neutral mediator who has experience in the subject matter of the claim or dispute.
Some states require that a law firm disclose the existence of errors and omissions, and insurance coverage applicable to the services to be rendered. Drumm Law LLC hereby confirms the existence of such insurance coverage for the purposes of complying with such a requirement.
OTHER FEES AND EXPENSES
If our scope of representation includes litigated matters, you also will be responsible for payment of all costs of litigation, including, but not limited to, court filing fees, expert fees, court reporter expenses and fees, research service usage and access fees, print and copy expenses, and other expenses of litigation reasonable incurred and expended on your behalf. In any event, you agree that the firm will be permitted to incur up to $1,000.00 in expenses without your prior approval. You agree to pay the firm’s actual costs of collection, including reasonable attorney’s fees, costs, third-party collection agency fees, and interest, incurred by the firm for collecting any past due amounts.
The undersigned individual, on behalf of the to-be-formed entity, requests Drumm Law, LLC to represent them in connection with the services described in this Engagement Letter. I have read the Engagement Letter and the Terms and Conditions and I agree to the terms and conditions of representation and the billing arrangements.
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Document Name: Lease Review - To Be Formed Entity
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