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R-11-05-12-4A - 5/12/2011RESOLUTION NO. R -11-05-12-4A WHEREAS, the existing Engagement Letter between Sheets & Crossfield, P.C. and the City of Round Rock ("City") is almost four years old, and WHEREAS, the City desires to enter into a renewed and revised engagement letter with Sheets & Crossfield, P.C. for City Attorney services, Now Therefore BE IT RESOLVED BY THE COUNCIL OF THE CITY OF ROUND ROCK, TEXAS, That the Mayor is hereby authorized and directed to execute on behalf of the City said engagement letter with Sheets & Crossfield, P.C., a copy of same being attached hereto as Exhibit "A" and incorporated herein for all purposes. The City Council hereby finds and declares that written notice of the date, hour, place and subject of the meeting at which this Resolution was adopted was posted and that such meeting was open to the public as required by law at all times during which this Resolution and the subject matter hereof were discussed, considered and formally acted upon, all as required by the Open Meetings Act, RESOLVED this 12th day of May, 2011. rn ALAN MCGRAW, Mayor City of Round Rock, Texas ATTEST: SARA L. WHITE, City Secretary O:\wdox\SCCInts\0112\ 1104\MUNICIPAL\00220979.DOC Sheets & Crossfield, P.C. ATTORNEYS AT LAW 309 East Main Street • Round Rock, TX 78664-5246 Phone 512-255-8877. fax 512-255-8986 April 25, 2011 Mayor Alan McGraw Mayor Pro Tem Carol Salinas Councilmember Rufus Honeycutt Councilmember George White Councilmember Joe Clifford Councilmember John Moman Councilmember Kris Whitfield Re: Engagement letter for City Attorney services Dear Mayor and Councilmembers: EXHIBIT1 „A„ //^/! As I approach the thirty-fourth anniversary of first being appointed as City Attorney for the City of Round Rock, I want to express my appreciation for the confidence that you have shown in me and my firm. I look forward to continuing to represent the City of Round Rock ("City") into the future. The existing Engagement Letter between my firm and the City is dated August 13, 2007. It is certainly mutually beneficial for an attorney and client to have an understanding of the expectations about the legal services to be provided, the amount of legal fees, and other important aspects of representation. It is also beneficial to review and renew the engagement letter from time to time to take into account any changing circumstances. With this in mind, this revised and renewed engagement letter is being proposed with the attached Standard Terms of Engagement. I want to encourage open and candid communications with you, so please let me know as soon as possible if you have questions about this letter, about the Standard Terms of Engagement, or if you are concerned about any aspect of my representation. Description and Scope of the Representation Stephan L. Sheets, representing the firm of Sheets & Crossfield, P.C., is hereby designated as the City Attorney of Round Rock, and he and the firm of Sheets & Crossfield, P.C. ("the Firm") are being retained to provide professional legal services for all departments and matters of the City. Our representation is not limited to a specific matter. The Firm is being retained to represent all matters for the City generally. It is our express understanding that the Firm is to perform all reasonable services and take all such action as may be appropriate and necessary in our professional judgment to further the interests of the City in all matters. Attorneys Handling the Representation I will be the primary attorney handling all matters, and will be assisted by my law partner, Charles Crossfield, and by staff attorneys (currently numbering four). The Firm also uses legal assistants in providing professional services when we believe that their use will reduce legal costs and/or improve efficiency. 00220488.DOC Legal Fees The Firm generally charges for our services based upon the time and effort devoted to the matter and the hourly rates of the lawyers and legal assistants who work on the representation. As of August 1, 2011, hourly rates for the members of the Firm will be as follows: Principals (Stephan Sheets and Charles Crossfield) $190.00 Senior Attorneys (Susan Camp -Lee, J. Kay Gayle, Don Childs) $180.00 Junior Associates $165.00 Legal Assistants/Paralegals $ 80.00 We review our billing rates annually, but will commit to letting you know at least ninety (90) days in advance if our hourly rates are modified. Costs and Expenses In addition to legal fees, the Firm charges for out-of-pocket costs and expenses incurred in representing the City. Please refer to the Standard Terms of Engagement for examples of such costs and expenses and how these will be handled and billed. Payment of Fees and Expenses The Firm's statements for fees and expenses are due upon receipt, and it is our expectation that our monthly statements will be paid not later than twenty-one (21) days following receipt. By entering into this representation agreement, you agree to timely payment of the Firm's invoices for fees and expenses related to representation. Notice of Termination Due to the nature of the long-term relationship between the parties and the legal representation provided by the Firm to the City, the City recognizes that the Firm has and will continue to make significant investment in equipment and resources and in the hiring of competent and experienced associate attorneys and administrative staff. As a result, the termination without adequate notice by the City of the attorney/client relationship would impose significant and unreasonable financial hardships on the Firm as well as the attorneys and staff members who would be required to be terminated by the Firm. Likewise, the termination of the attorney/client relationship by the Firm without adequate notice to the City would subject the City to significant expense and possible prejudice with respect to pending legal matters while the City sought to replace the Firm. Therefore, the City and Firm agree that adequate notice for both parties for the termination of the attorney/client relationship without cause is at least nine months. In the event that Firm terminates the attorney/client relationship without cause and without at least nine months notice to the City, then Firm agrees to pay to the City liquidated damages equal to $50,000 per month for each month of notice less than nine months. In the event that the City terminates the attorney/client relationship without cause and without adequate notice to the Firm, the City agrees to pay to the Firm severance compensation equal to $50,000 per month for each month of notice less than nine months. Regardless of the foregoing, either the City or the Firm may terminate the attorney/client relationship for cause without notice. With respect to the City, cause for termination shall be limited to the City's failure to pay for legal services and costs rendered within 60 days of receiving a statement for same. With respect to the Firm, cause for termination shall be limited to one of the firm's senior partners being found guilty of professional misconduct with respect to a legal matter involving the City or of a felony offense, or a misdemeanor involving moral turpitude, whether committed within or outside the scope of the Firm's representation hereunder. Conclusion Once again, on behalf of myself and all of the members of Sheets & Crossfield, P.C., we are honored and pleased to continue to represent the City of Round Rock. If this engagement letter and the attached Standard Terms of Engagement accurately reflect our agreement, please sign a copy of this letter and return it to me at your earliest convenience. AGREED TO AND ACCEPTED ON THIS DAY OF MAY, 2011 By: Alan McGraw, Mayor Sin y Step For t i . L. Sheets e Firm STANDARD TERMS OF ENGAGEMENT These are the Standard Terms of Engagement referred to in my engagement letter. Because they are an integral part of my agreement to provide legal services, I ask that you review this document carefully and retain it for your files. If you have any questions after reading it, please contact me promptly. Who Will Provide the Legal Services? In most cases, one attorney will be your principal contact. From time to time, that attorney may delegate parts of your work to other lawyers or to legal assistants or non -legal professionals in Sheets & Crossfield, P.C., referred to herein as the Firm. We do this in order to involve those with special knowledge or experience in an area and to provide service to you in a timely and efficient manner. The Scope of the Representation As lawyers, we undertake to provide representation and advice on the legal matters for which we are engaged, and it is important that all parties have a clear understanding of the legal services that the Firm has agreed to provide. In my engagement letter with you, I specify the matter in which the Firm will provide representation and the scope of the services to be provided. If there are any questions about the terms of engagement, including the scope of the representation to be provided in the matter, please raise those questions promptly with me or with your principal contact at the firm. The Firm cannot guarantee the outcome of any matter. Any expression of our professional judgment regarding your matter or the potential outcome is, of course, limited by our knowledge of the facts and based on the law at the time of expression. It is also subject to unknown or uncertain factors or conditions beyond our control. Your Cooperation To enable the Firm to provide effective representation, you agree to: (1) disclose to us, fully and accurately and on a timely basis, all facts and documents that are or might be material or that we may request, (2) keep us apprised on a timely basis of all developments relating to the representation that are or might be material, (3) attend meetings, conferences, and other proceedings when it is reasonable to do so, and (4) otherwise cooperate fully with us. The Firm as Independent Contractor The Firm has independent contractor status, and is not considered your employee. The Finn's employees or subcontractors are not your employees. This attorney-client arrangement does not create a partnership, employer-employee, or joint venture relationship. No party has authority to enter into contracts as agent for the other party, without express written authority. You and the Firm agree to the following rights consistent with an independent contractor relationship: (1) The Firm has. the right to perform services for others during the term of this attorney-client relationship, (2) The Firm has the sole right to control and direct the means, manner and method 120140 1 by which required services will be performed, (3) The Firm has the right to hire assistants as subcontractors, or to use its employees to provide the services required, (4) The Firm or its employees or subcontractors shall perform services required, and you shall not hire, supervise, or pay assistants to assist the Firm without express written authority, (5) Neither the Firm nor its employees or subcontractors shall receive training from you in skills necessary to perform services required, (6) You shall not require the Firm or its employees or subcontractors to devote full time to performing the services required, and (7) Neither the Firm nor its employees or subcontractors are eligible to participate in any of your employee pension, health, vacation pay, sick pay, or other fringe benefit plans. Our Relationships with Others The Firm represents many organizations and individuals. In some instances, the applicable rules of professional conduct may limit our ability to represent clients with conflicting or potentially conflicting interests. Those rules of conduct often allow us to exercise our independent judgment in determining whether our relationship with one client prevents us from representing another. In other situations, we may be permitted to represent a client only if the other clients consent to that representation. If a controversy unrelated to the subject matter of the representation develops between you and any other client of the Firm, we will follow the applicable rules of professional responsibility to determine whether we may represent either you or the other client in the unrelated controversy. In making this determination, we will consider your agreement to the Conflicts of Interest provisions in these Standard Terms of Engagement. In addition to our representation of other organizations and individuals, we have professional and personal relationships with many other attorneys, often because of our participation in bar associations and other professional organizations. We believe that these relationships with other attorneys do not adversely affect our ability to represent any client and, in some circumstances, may enhance our representation. Your acceptance of this engagement letter means you consent to any such relationships between the Firm and other lawyers or law firms, even counsel who is representing a party that is adverse to you in the matter that is the subject of this engagement or in some other matter. Conflicts of Interest Increasingly, conflicts of interest are a concern for lawyers and their clients. We attempt to identify actual and potential conflicts at the outset of any engagement, and may request that you sign a conflict waiver before we accept an engagement from you. Occasionally, other clients or prospective clients may ask us to seek a conflict waiver from you so that we can accept an engagement on their behalf. Please do not take such a request to mean that we will represent you less zealously; we make such requests because we take our professional responsibilities to all clients and prospective clients very seriously. Unfortunately, conflicts sometimes arise or become apparent after work begins on an engagement. When that happens, we will do our best to address and resolve the situation in the manner that best serves the interests of all of our affected clients. 120140 2 Rules concerning conflicts of interest vary with the jurisdiction. In order to avoid any uncertainty, our policy is that the Texas Disciplinary Rules of Professional Conduct will be applicable to the representation. Your acceptance of this engagement letter means you agree with that policy, unless the engagement letter specifically states that some other rules of professional responsibility will govern our attorney-client relationship. How We Set Our Fees The basis for determining our fee for legal services is set forth in the engagement letter itself. If you are unclear about the basis for determining your fee, please raise any questions you may have with me or your principal contact at the firm. Clients frequently ask us to estimate the fees and other charges they are likely to incur in connection with a particular matter. We are pleased to respond to such requests, whenever possible, with an estimate based on our professional judgment. This estimate always carries the understanding that, unless we agree otherwise in writing, it does not represent a maximum, minimum, or fixed -fee quotation. The ultimate cost frequently is more or less than the amount estimated. Charges for Other Expenses and Services As an adjunct to providing legal services, the Firm may incur and pay a variety of charges on your behalf or charge for certain ancillary support services. Whenever we incur such charges on your behalf or charge for such ancillary support services, we will bill them to you as part of your monthly invoice. Accordingly, our invoices usually will include amounts not only for legal services rendered, but also for other expenses and services. Examples include charges for filing fees, document reproduction, postage, travel and conference expenses, delivery charges, computerized research, and facsimile and other electronic transmissions. Outside expenses will generally be billed at cost, while some in-house expenses (e.g., document reproduction, facsimile, computer services and electronic research) will include a reasonable allocation of overhead. In appropriate cases, reimbursable expenses may also include staff overtime charges. You may authorize us to retain third parties, such as consultants, experts and investigators, as may be necessary to the representation. Although we advance third -party disbursements in reasonable amounts, we will ask you to pay larger third -party invoices (usually those over $200.00) directly to the third party providing the services. Billing Arrangements and Terms of Payment The Firm will bill you on a regular basis, normally each month, for both fees and other charges. You agree to make payment within thirty (30) days of the date of our invoice. Payment of our fees and costs is not contingent on the ultimate outcome of our representation. Termination Because the Firm has been engaged to provide legal services in connection with the representation specifically defined in our engagement letter, the attorney-client relationship automatically renews on a yearly basis. 120140 3 You may, however, terminate our representation at any time, with or without cause. You agree that we will own and retain our own files pertaining to the matters or cases, including but not limited to firm administrative records, time and expense reports, personnel and staffing materials, credit and accounting records, and internal lawyers' work product such as drafts, notes, internal memoranda, and legal and factual research including investigative reports, prepared by or for the internal use of lawyers. If you later retain the Firm to perform further or additional services, our attorney-client relationship will be subject to the terms of engagement agreed to at the time; in the absence of any specific agreement, these Standard Terms of Engagement shall apply to the further or additional representation. The termination of our services will not affect your responsibility for payment of legal services rendered and other charges incurred before termination and in connection with an orderly transition of the matter. Document Retention While the Firm tries to retain closed files for an extended period of time, usually not to exceed ten (10) years, we do reserve the right to destroy or otherwise dispose of all files, without further notice to you and in a manner which preserves the confidential and secret nature of their contents. You may receive, along with the final bill or documents concluding the case, a notice that the file will be retired and stored for a designated retention period. I or the attorney immediately responsible for handling your matters will advise you to obtain any papers from the file not previously furnished to you. The file may thereafter, without additional notice to you, be destroyed by the Firm following the designated retention period. Only upon my written authorization will the file be partially destroyed, destroyed in its entirety, retained for an additional period of time, or returned to you for safekeeping. If you have a Records Retention Policy in place with which outside counsel will need to comply, please let me know so that I may inform our Records Department. In the event you instruct us to return your file to you at the end of the retention period, we will use the last known address in the file to return your file (excluding the wok product subfiles). The Firm will not retain a copy. Disclaimer By signing the engagement letter or otherwise indicating your acceptance of the engagement letter, you acknowledge that Sheets & Crossfield, P.C. has made no promises or guarantees to you about the outcome of the representation, and nothing in these terms of engagement shall be construed as such a promise or guarantee. Either at the commencement or during the course of the representation, we may express opinions or beliefs about the matter or various courses of action and the results that might be anticipated. Any expressions on our part concerning the outcome of the representation, or any other legal matters, are based on our professional judgment and are not guarantees. Our Professional Responsibility The Code of Professional Responsibility to which we are subject lists several types of conduct or circumstances that require or allow us to withdraw from representing a client. These include, for 120140 4 example, nonpayment of fees or charges, misrepresentation or failure to disclose material facts, action contrary to our advice, and conflict of interest with another client. The Firm tries to identify in advance and discuss with our clients any situation that may lead to our withdrawal. If withdrawal ever becomes necessary, we give our client written notice as soon as practicable. Under rules of the Texas Supreme Court and the State Bar of Texas, we advise our clients of the contents of the Texas Lawyer's Creed, a copy of which is enclosed. In addition, we advise clients that the State Bar of Texas investigates and prosecutes complaints of professional misconduct against attorneys licensed in Texas. A client that has any questions about the State Bar's disciplinary process should call the Office of the General Counsel of the State Bar of Texas at 1- 800-932-1900 (toll free). Modification of Our Agreement The engagement letter and these Standard Terms of Engagement reflect our entire agreement on the terms of this engagement. These written terms of engagement are not subject to any oral agreements or understandings, and any change in those terms can only be made in writing signed by both Sheets & Crossfield, P.C. and you. Conclusion We look forward to a long and mutually satisfying relationship with you. Again, if at any time you have a question or concern, please feel free to bring it to the attention of me or your principal contact at the Firm. Enclosure: TEXAS LAWYER'S CREED 120140 5 Texas Lawyer's Creed I am a lawyer. I an entrusted by the People of Texas to preserve and improve our legal system. I am licensed by the Supreme Court of Texas. I must therefore abide by the Texas Disciplinary Rules of Professional Conduct, but I know that professionalism requires more than merely avoiding the vio- lation of laws and rules. I am committed to this creed for no other reason than it is right. I. OUR LEGAL SYSTEM A lawyer owes to the administration of justice personal dignity, integrity, and inde- pendence. A lawyer should always adhere to the highest principles of professionalism. 1. I am passionately proud of my profes- sion. Therefore, "My word is my bond." 2. I am responsible to assure that all per- sons have access to competent representation regardless of wealth or position in life. 3. I commit myself to an adequate and effective pro bono program. 4. I am obligated to educate my clients, the public, and other lawyers regarding the spirit and letter of this Creed. 5. I will always be conscious of my duty to the judicial system. II. LAWYER TO CLIENT A lawyer owes to a client allegiance, learning, skill, and industry. A lawyer shall employ all appropriate means to protect and advance the client's legitimate rights, claims, and objectives. A lawyer shall not be deterred by any real or imagined fear of judicial disfa- vor or public unpopularity, nor be influenced by mere self-interest. 1. I will advise my client of the contents of this creed when undertaking representa- tion. 2. I will endeavor to achieve my client's lawful objectives in legal transactions and in litigation as quickly and economically as possible. 3. I will be loyal and committed to my client's lawful objectives, but I will not per- mit that loyalty and commitment to interfere with my duty to provide objective and inde- pendent advice. 4. I will advise my client that civility and courtesy are expected and are not a sign of weakness. 5. I will advise my client of proper and expected behavior. 6. I will treat adverse parties and wit- nesses with fairness and due consideration. A client has no right to demand that I abuse anyone or indulge in any offensive conduct. 7.1 will advise my client that we will not pursue conduct which is intended primarily to harass or drain the financial resources of the opposing party. 8. I will advise my client that we will not pursue tactics which are intended primarily for delay. 9. I will advise my client that we will not pursue any course of action which is without merit. 10. I will advise my client that I reserve the right to determine whether to grant accommodations to opposing counsel in all matters that do not adversely affect my client's lawful objectives. A client has no right to instruct me to refuse reasonable requests made by other counsel. 11. I will advise my client regarding the availability of mediation, arbitration, and other alternative methods of resolving and settling disputes. III. LAWYER TO LAWYER A lawyer owes to opposing counsel, in the conduct of legal transactions and the pur- suit of litigation, courtesy, candor, coopera- tion, and scrupulous observance of all agree- ments and mutual understandings. Ill feelings between clients shall not influence a lawyer's conduct, attitude, or demeanor toward oppos- ing counsel. A lawyer shall not engage in unprofessional conduct in retaliation against other unprofessional conduct. 1. I will be courteous, civil, and prompt in oral and written communications. 2. I will not quarrel over matters of form or style, but I will concentrate on matters of substance. 3. I will identify for other counsel or parties all changes I have made in documents submitted for review. 4. I will attempt to prepare documents which correctly reflect the agreement of the parties. I will not include provisions which have not been agreed upon or omit provi- sions which are necessary to reflect the agreement of the parties. 5. I will notify opposing counsel, and, if appropriate, the Court or other persons, as soon as practicable, when hearings, deposi- tions, meetings, conferences or closings are cancelled. 6. I will agree to reasonable requests for extensions of time and for waiver of proce- dural formalities, provided legitimate objec- tives of my client will not be adversely affected. 7. I will not serve motions or pleadings in any manner that unfairly limits another party's opportunity to respond. 8. I will attempt to resolve by agreement my objections to matters contained in plead- ings and discovery requests and responses. 9.1 can disagree without being disagree- able. I recognize that effective representation does not require antagonistic or obnoxious behavior. I will neither encourage nor know- ingly permit my client or anyone under my control to do anything which would be unethical or improper if done by me. 10. I will not, without good cause, attribute bad motives or unethical conduct to opposing counsel nor bring the profession into disrepute by unfounded accusations of impropriety. I will avoid disparaging person- al remarks or acrimony towanis opposing counsel, parties and witnesses. I will not be influenced by any ill feeling between clients. I will abstain from any allusion to personal peculiarities or idiosyncrasies of opposing counseL 11. I will not take advantage, by causing any default or dismissal to be rendered, when I know the identity of an opposing counsel, without first inquiring about that counsel's intention to proceed. 12. I will promptly submit orders to the Court. I will deliver copies to opposing coun- sel before or contemporaneously with sub- mission to the Court. I will promptly approve the form of orders which accurately reflect the substance of the rulings of the Court. 13. I will not attempt to gain an unfair advantage by sending the Court or its staff correspondence or copies of correspondence. 14. I will not arbitrarily schedule a depo- sition, court appearance, or hearing until a good faith effort has been made to schedule it by agreement. 15. I will readily stipulate to undisputed facts in order to avoid needless costs or inconvenience for any party. 16. I will refrain from excessive and abusive discovery. 17. I will comply with all reasonable discovery requests. I will not resist discovery requests which are not objectionable. I will not make objections nor give instructions to a witness for the purpose of delaying or obstructing the discovery process. I will encourage witnesses to respond to all deposi- tion questions which are reasonably under- standable. I will neither encourage nor permit my witness to quibble about words where their meaning is reasonably clear. 18. I will not seek Court intervention to obtain discovery which is clearly improper and not discoverable. 19. I will not seek sanctions or disquali- fication unless it is necessary for protection of my client's lawful objectives or is fully justified by the circumstances. IV. LAWYER AND JUDGE Lawyers and judges owe each other respect, diligence, candor, punctuality, and protection against unjust and improper criti- cism and attack. Lawyers and judges are equally responsible to protect the dignity and independence of the Court and the profes- sion. 1. I will always recognize that the posi- tion of judge is the symbol of both the judi- cial system and administration of justice. I will refrain from conduct that degrades this symbol. 2. I will conduct myself in Court in a professional manner and demonstrate my respect for the Court and the law. 3. I will treat counsel, opposing parties, the Court, and members of the Court staff with courtesy and civility. 4. I will be punctual 5. I will not engage in any conduct which offends the dignity and decorum of proceedings. 6. I will not knowingly misrepresent, mischaracterize, misquote or miscite facts or authorities to gain an advantage. 7. I will respect the rulings of the Court. 8. I will give the issues in controversy deliberate, impartial and studied analysis and consideration. 9. I will be considerate of the time con- straints and pressures imposed upon the Court, Court staff and counsel in efforts to administer justice and resolve disputes. ROUND ROCK, TEXAS PURPOSE. PASSION. PROSPERITY Agenda Item No. 4A. City Council Agenda Summary Sheet Agenda Caption: engagement letter with Sheets & Crossfield, P.C. for City Attorney services. Meeting Date: May 12, 2011 Consider a resolution authorizing the Mayor to execute a renewed and revised Department: Legal Staff Person making presentation: Steve Sheets City Attorney Item Summary: The existing Engagement Letter between Sheets & Crossfield, P.C. and the City of Round Rock is almost four years old, and this revised and renewed engagement letter is being proposed to replace it. Sheets and Crossfield, P.C. would like to continue to represent the City of Round Rock. Strategic Plan Relevance: Cost: N/A Source of Funds: N/A Date of Public Hearing (if required): N/A Recommended Action: Approval EXECUTED DOCUMENT FOLLOWS Sheets & Crossfield, P.C. ATTORNEYS AT LAW 309 East Main Street • Round Rock, TX 78664-5246 Phone 512-255-8877 • fax 512-255-8986 April 25, 2011 Mayor Alan McGraw Mayor Pro Tem Carol Salinas Councilmember Rufus Honeycutt Councilmember George White Councilmember Joe Clifford Councilmember John Moman Councilmember Kris Whitfield Re: Engagement letter for City Attorney services Dear Mayor and Councilmembers: As I approach the thirty-fourth anniversary of first being appointed as City Attorney for the City of Round Rock, I want to express my appreciation for the confidence that you have shown in me and my firm. I look forward to continuing to represent the City of Round Rock ("City") into the future. The existing Engagement Letter between my firm and the City is dated August 13, 2007. It is certainly mutually beneficial for an attorney and client to have an understanding of the expectations about the legal services to be provided, the amount of legal fees, and other important aspects of representation. It is also beneficial to review and renew the engagement letter from time to time to take into account any changing circumstances. With this in mind, this revised and renewed engagement letter is being proposed with the attached Standard Terms of Engagement. I want to encourage open and candid communications with you, so please let me know as soon as possible if you have questions about this letter, about the Standard Terms of Engagement, or if you are concerned about any aspect of my representation. Description and Scope of the Representation Stephan L. Sheets, representing the firm of Sheets & Crossfield, P.C., is hereby designated as the City Attorney of Round Rock, and he and the firm of Sheets & Crossfield, P.C. ("the Firm") are being retained to provide professional legal services for all departments and matters of the City. Our representation is not limited to a specific matter. The Firm is being retained to represent all matters for the City generally. It is our express understanding that the Firm is to perform all reasonable services and take all such action as may be appropriate and necessary in our professional judgment to further the interests of the City in all matters. Attorneys Handling the Representation I will be the primary attorney handling all matters, and will be assisted by my law partner, Charles Crossfield, and by staff attorneys (currently numbering four). The Firm also uses legal assistants in providing professional services when we believe that their use will reduce legal costs and/or improve efficiency. 00220488.DOC Legal Fees The Firm generally charges for our services based upon the time and effort devoted to the matter and the hourly rates of the lawyers and legal assistants who work on the representation. As of August 1, 2011, hourly rates for the members of the Firm will be as follows: Principals (Stephan Sheets and Charles Crossfield) $190.00 Senior Attorneys (Susan Camp -Lee, J. Kay Gayle, Don Childs) $180.00 Junior Associates $165.00 Legal Assistants/Paralegals $ 80.00 We review our billing rates annually, but will commit to letting you know at least ninety (90) days in advance if our hourly rates are modified. Costs and Expenses In addition to legal fees, the Firm charges for out-of-pocket costs and expenses incurred in representing the City. Please refer to the Standard Terms of Engagement for examples of such costs and expenses and how these will be handled and billed. Payment of Fees and Expenses The Firm's statements for fees and expenses are due upon receipt, and it is our expectation that our monthly statements will be paid not later than twenty-one (21) days following receipt. By entering into this representation agreement, you agree to timely payment of the Firm's invoices for fees and expenses related to representation. Notice of Termination Due to the nature of the long-term relationship between the parties and the legal representation provided by the Firm to the City, the City recognizes that the Firm has and will continue to make significant investment in equipment and resources and in the hiring of competent and experienced associate attorneys and administrative staff. As a result, the termination without adequate notice by the City of the attorney/client relationship would impose significant and unreasonable financial hardships on the Firm as well as the attorneys and staff members who would be required to be terminated by the Firm. Likewise, the termination of the attorney/client relationship by the Firm without adequate notice to the City would subject the City to significant expense and possible prejudice with respect to pending legal matters while the City sought to replace the Firm. Therefore, the City and Firm agree that adequate notice for both parties for the termination of the attorney/client relationship without cause is at least nine months. In the event that Firm terminates the attorney/client relationship without cause and without at least nine months notice to the City, then Firm agrees to pay to the City liquidated damages equal to $50,000 per month for each month of notice less than nine months. In the event that the City terminates the attorney/client relationship without cause and without adequate notice to the Firm, the City agrees to pay to the Firm severance compensation equal to $50,000 per month for each month of notice less than nine months. Regardless of the foregoing, either the City or the Firm may terminate the attorney/client relationship for cause without notice. With respect to the City, cause for termination shall be limited to the City's failure to pay for legal services and costs rendered within 60 days of receiving a statement for same. With respect to the Firm, cause for termination shall be limited to one of the firm's senior partners being found guilty of professional misconduct with respect to a legal matter involving the City or of a felony offense, or a misdemeanor involving moral turpitude, whether committed within or outside the scope of the Firm's representation hereunder. Conclusion Once again, on behalf of myself and all of the members of Sheets & Crossfield, P.C., we are honored and pleased to continue to represent the City of Round Rock. If this engagement letter and the attached Standard Terms of Engagement accurately reflect our agreement, please sign a copy of this letter and return it to me at your earliest convenience. AGREED TO AND ACCEPTED ON THIS 1231>- DAY OF MAY, 2011 By: Alan McGraw, Mayor Sini er ly Step !: L. Sheets Forte Firm STANDARD TERMS OF ENGAGEMENT These are the Standard Terms of Engagement referred to in my engagement letter. Because they are an integral part of my agreement to provide legal services, I ask that you review this document carefully and retain it for your files. If you have any questions after reading it, please contact me promptly. Who Will Provide the Legal Services? In most cases, one attorney will be your principal contact. From time to time, that attorney may delegate parts of your work to other lawyers or to legal assistants or non -legal professionals in Sheets & Crossfield, P.C., referred to herein as the Firm. We do this in order to involve those with special knowledge or experience in an area and to provide service to you in a timely and efficient manner. The Scope of the Representation As lawyers, we undertake to provide representation and advice on the legal matters for which we are engaged, and it is important that all parties have a clear understanding of the legal services that the Firm has agreed to provide. In my engagement letter with you, I specify the matter in which the Firm will provide representation and the scope of the services to be provided. If there are any questions about the terms of engagement, including the scope of the representation to be provided in the matter, please raise those questions promptly with me or with your principal contact at the firm. The Firm cannot guarantee the outcome of any matter. Any expression of our professional judgment regarding your matter or the potential outcome is, of course, limited by our knowledge of the facts and based on the law at the time of expression. It is also subject to unknown or uncertain factors or conditions beyond our control. Your Cooperation To enable the Firm to provide effective representation, you agree to: (1) disclose to us, fully and accurately and on a timely basis, all facts and documents that are or might be material or that we may request, (2) keep us apprised on a timely basis of all developments relating to the representation that are or might be material, (3) attend meetings, conferences, and other proceedings when it is reasonable to do so, and (4) otherwise cooperate fully with us. The Firm as Independent Contractor The Firm has independent contractor status, and is not considered your employee. The Firm's employees or subcontractors are not your employees. This attorney-client arrangement does not create a partnership, employer-employee, or joint venture relationship. No party has authority to enter into contracts as agent for the other party, without express written authority. You and the Firm agree to the following rights consistent with an independent contractor relationship: (1) The Firm has the right to perform services for others during the term of this attorney-client relationship, (2) The Firm has the sole right to control and direct the means, manner and method 120140 1 by which required services will be performed, (3) The Firm has the right to hire assistants as subcontractors, or to use its employees to provide the services required, (4) The Firm or its employees or subcontractors shall perform services required, and you shall not hire, supervise, or pay assistants to assist the Firm without express written authority, (5) Neither the Firm nor its employees or subcontractors shall receive training from you in skills necessary to perform services required, (6) You shall not require the Firm or its employees or subcontractors to devote full time to performing the services required, and (7) Neither the Firm nor its employees or subcontractors are eligible to participate in any of your employee pension, health, vacation pay, sick pay, or other fringe benefit plans. Our Relationships with Others The Firm represents many organizations and individuals. In some instances, the applicable rules of professional conduct may limit our ability to represent clients with conflicting or potentially conflicting interests. Those rules of conduct often allow us to exercise our independent judgment in determining whether our relationship with one client prevents us from representing another. In other situations, we may be permitted to represent a client only if the other clients consent to that representation. If a controversy unrelated to the subject matter of the representation develops between you and any other client of the Firm, we will follow the applicable rules of professional responsibility to determine whether we may represent either you or the other client in the unrelated controversy. In making this determination, we will consider your agreement to the Conflicts of Interest provisions in these Standard Terms of Engagement. In addition to our representation of other organizations and individuals, we have professional and personal relationships with many other attorneys, often because of our participation in bar associations and other professional organizations. We believe that these relationships with other attorneys do not adversely affect our ability to represent any client and, in some circumstances, may enhance our representation. Your acceptance of this engagement letter means you consent to any such relationships between the Firm and other lawyers or law firms, even counsel who is representing a party that is adverse to you in the matter that is the subject of this engagement or in some other matter. Conflicts of Interest Increasingly, conflicts of interest are a concern for lawyers and their clients. We attempt to identify actual and potential conflicts at the outset of any engagement, and may request that you sign a conflict waiver before we accept an engagement from you. Occasionally, other clients or prospective clients may ask us to seek a conflict waiver from you so that we can accept an engagement on their behalf. Please do not take such a request to mean that we will represent you less zealously; we make such requests because we take our professional responsibilities to all clients and prospective clients very seriously. Unfortunately, conflicts sometimes arise or become apparent after work begins on an engagement. When that happens, we will do our best to address and resolve the situation in the manner that best serves the interests of all of our affected clients. 120140 2 Rules concerning conflicts of interest vary with the jurisdiction. In order to avoid any uncertainty, our policy is that the Texas Disciplinary Rules of Professional Conduct will be applicable to the representation. Your acceptance of this engagement letter means you agree with that policy, unless the engagement letter specifically states that some other rules of professional responsibility will govern our attorney-client relationship. How We Set Our Fees The basis for determining our fee for legal services is set forth in the engagement letter itself. If you are unclear about the basis for determining your fee, please raise any questions you may have with me or your principal contact at the firm. Clients frequently ask us to estimate the fees and other charges they are likely to incur in connection with a particular matter. We are pleased to respond to such requests, whenever possible, with an estimate based on our professional judgment. This estimate always carries the understanding that, unless we agree otherwise in writing, it does not represent a maximum, minimum, or fixed -fee quotation. The ultimate cost frequently is more or less than the amount estimated. Charges for Other Expenses and Services As an adjunct to providing legal services, the Firm may incur and pay a variety of charges on your behalf or charge for certain ancillary support services. Whenever we incur such charges on your behalf or charge for such ancillary support services, we will bill them to you as part of your monthly invoice. Accordingly, our invoices usually will include amounts not only for legal services rendered, but also for other expenses and services. Examples include charges for filing fees, document reproduction, postage, travel and conference expenses, delivery charges, computerized research, and facsimile and other electronic transmissions. Outside expenses will generally be billed at cost, while some in-house expenses (e.g., document reproduction, facsimile, computer services and electronic research) will include a reasonable allocation of overhead. In appropriate cases, reimbursable expenses may also include staff overtime charges. You may authorize us to retain third parties, such as consultants, experts and investigators, as may be necessary to the representation. Although we advance third -party disbursements in reasonable amounts, we will ask you to pay larger third -party invoices (usually those over $200.00) directly to the third party providing the services. Billing Arrangements and Terms of Payment The Firm will bill you on a regular basis, normally each month, for both fees and other charges. You agree to make payment within thirty (30) days of the date of our invoice. Payment of our fees and costs is not contingent on the ultimate outcome of our representation. Termination Because the Firm has been engaged to provide legal services in connection with the representation specifically defined in our engagement letter, the attorney-client relationship automatically renews on a yearly basis. 120140 3 You may, however, terminate our representation at any time, with or without cause. You agree that we will own and retain our own files pertaining to the matters or cases, including but not limited to firm administrative records, time and expense reports, personnel and staffing materials, credit and accounting records, and internal lawyers' work product such as drafts, notes, internal memoranda, and legal and factual research including investigative reports, prepared by or for the internal use of lawyers. If you later retain the Firm to perform further or additional services, our attorney-client relationship will be subject to the terms of engagement agreed to at the time; in the absence of any specific agreement, these Standard Terms of Engagement shall apply to the further or additional representation. The termination of our services will not affect your responsibility for payment of legal services rendered and other charges incurred before termination and in connection with an orderly transition of the matter. Document Retention While the Firm tries to retain closed files for an extended period of time, usually not to exceed ten (10) years, we do reserve the right to destroy or otherwise dispose of all files, without further notice to you and in a manner which preserves the confidential and secret nature of their contents. You may receive, along with the final bill or documents concluding the case, a notice that the file will be retired and stored for a designated retention period. I or the attorney immediately responsible for handling your matters will advise you to obtain any papers from the file not previously furnished to you. The file may thereafter, without additional notice to you, be destroyed by the Firm following the designated retention period. Only upon my written authorization will the file be partially destroyed, destroyed in its entirety, retained for an additional period of time, or returned to you for safekeeping. If you have a Records Retention Policy in place with which outside counsel will need to comply, please let me know so that I may inform our Records Department. In the event you instruct us to return your file to you at the end of the retention period, we will use the last known address in the file to return your file (excluding the wok product subfiles). The Firm will not retain a copy. Disclaimer By signing the engagement letter or otherwise indicating your acceptance of the engagement letter, you acknowledge that Sheets & Crossfield, P.C. has made no promises or guarantees to you about the outcome of the representation, and nothing in these terms of engagement shall be construed as such a promise or guarantee. Either at the commencement or during the course of the representation, we may express opinions or beliefs about the matter or various courses of action and the results that might be anticipated. Any expressions on our part concerning the outcome of the representation, or any other legal matters, are based on our professional judgment and are not guarantees. Our Professional Responsibility The Code of Professional Responsibility to which we are subject lists several types of conduct or circumstances that require or allow us to withdraw from representing a client. These include, for 120140 4 example, nonpayment of fees or charges, misrepresentation or failure to disclose material facts, action contrary to our advice, and conflict of interest with another client. The Firm tries to identify in advance and discuss with our clients any situation that may lead to our withdrawal. If withdrawal ever becomes necessary, we give our client written notice as soon as practicable. Under rules of the Texas Supreme Court and the State Bar of Texas, we advise our clients of the contents of the Texas Lawyer's Creed, a copy of which is enclosed. In addition, we advise clients that the State Bar of Texas investigates and prosecutes complaints of professional misconduct against attorneys licensed in Texas. A client that has any questions about the State Bar's disciplinary process should call the Office of the General Counsel of the State Bar of Texas at 1- 800-932-1900 (toll free). Modification of Our Agreement The engagement letter and these Standard Terms of Engagement reflect our entire agreement on the terms of this engagement. These written terms of engagement are not subject to any oral agreements or understandings, and any change in those terms can only be made in writing signed by both Sheets & Crossfield, P.C. and you. Conclusion We look forward to a long and mutually satisfying relationship with you. Again, if at any time you have a question or concern, please feel free to bring it to the attention of me or your principal contact at the Firm. Enclosure: TEXAS LAWYER'S CREED 120140 5 Texas Lawyer's Creed I am a lawyer. I am entrusted by the People of Texas to preserve and improve our legal system. I am licensed by the Supreme Court of Texas. I must therefore abide by the Texas Disciplinary Rules of Professional Conduct, but I know that professionalism requires more than merely avoiding the vio- lation of laws and rules. I am committed to this creed for no other reason than it is right. I. OUR LEGAL SYSTEM A lawyer owes to the administration of justice personal dignity, integrity, and inde- pendence. A lawyer should always adhere to the highest principles of professionalism. 1. I am passionately proud of my profes- sion. Therefore, "My word is my bond." 2. I am responsible to assure that all per- sons have access to competent representation regardless of wealth or position in life. 3. I commit myself to an adequate and effective pro bono program. 4. I am obligated to educate my clients, the public, and other lawyers regarding the spirit and letter of this Creed. 5. I will always be conscious of my duty to the judicial system. II. LAWYER TO CLIENT A lawyer owes to a client allegiance, learning, skill, and industry. A lawyer shall employ all appropriate means to protect and advance the client's legitimate rights, claims, and objectives. A lawyer shall not be deterred by any real or imagined fear of judicial disfa- vor or public unpopularity, nor be influenced by mere self-interest. 1. I will advise my client of the contents of this creed when undertaking representa- tion. 2. I will endeavor to achieve my client's lawful objectives in legal transactions and in litigation as quickly and economically as possible. 3. I will be loyal and committed to my client's lawful objectives, but I will not per- mit that loyalty and commitment to interfere with my duty to provide objective and inde- pendent advice. 4. I will advise my client that civility and courtesy are expected and are not a sign of weakness. 5. I will advise my client of proper and expected behavior. 6. I will treat adverse parties and wit- nesses with fairness and due consideration. A client has no right to demand that I abuse anyone or indulge in any offensive conduct. 7. I will advise my client that we will not pursue conduct which is intended primarily to harass or drain the financial resources of the opposing party. 8. I will advise my client that we will not pursue tactics which are intended primarily for delay. 9. I will advise my client that we will not pursue any course of action which is without merit. 10. I will advise my client that I reserve the right to determine whether to grant accommodations to opposing counsel in all matters that do not adversely affect my client's lawful objectives. A client has no right to instruct me to refuse reasonable requests made by other counsel. 11. I will advise my client regarding the availability of mediation, arbitration, and other alternative methods of resolving and settling disputes. III. LAWYER TO LAWYER A lawyer owes to opposing counsel, in the conduct of legal transactions and the pur- suit of litigation, courtesy, candor, coopera- tion, and scrupulous observance of all agree- ments and mutual understandings. Ill feelings between clients shall not influence a lawyer's conduct, attitude, or demeanor toward oppos- ing counsel. A lawyer shall not engage in unprofessional conduct in retaliation against other unprofessional conduct. 1. I will be courteous, civil, and prompt in oral and written communications. 2. I will not quarrel over matters of form or style, but I will concentrate on matters of substance. 3. I will identify for other counsel or parties all changes I have made in documents submitted for review. 4. I will attempt to prepare documents which correctly reflect the agreement of the parties. I will not include provisions which have not been agreed upon or omit provi- sions which are necessary to reflect the agreement of the parties. 5. I will notify opposing counsel, and, if appropriate, the Court or other persons, as soon as practicable, when hearings, deposi- tions, meetings, conferences or closings are cancelled. 6. I will agree to reasonable requests for extensions of time and for waiver of proce- dural formalities, provided legitimate objec- tives of my client will not be adversely affected. 7. I will not serve motions or pleadings in any manner that unfairly limits another party's opportunity to respond. 8. I will attempt to resolve by agreement my objections to matters contained in plead- ings and discovery requests and responses. 9. I can disagree without being disagree- able. I recognize that effective representation does not require antagonistic or obnoxious behavior. I will neither encourage nor know- ingly permit my client or anyone under my control to do anything which would be unethical or improper if done by me. 10. I will not, without good cause, attribute bad motives or unethical conduct to opposing counsel nor bring the profession into disrepute by unfounded accusations of impropriety. I will avoid disparaging person- al remarks or acrimony towards opposing counsel, parties and witnesses. I will not be influenced by any ill feeling between clients. I will abstain from any allusion to personal peculiarities or idiosyncrasies of opposing counsel. 11. I will not take advantage, by causing any default or dismissal to be rendered, when I know the identity of an opposing counsel, without first inquiring about that counsel's intention to proceed. 12. I will promptly submit orders to the Court. I will deliver copies to opposing coun- sel before or contemporaneously with sub- mission to the Court. I will promptly approve the form of orders which accurately reflect the substance of the rulings of the Court. 13. I will not attempt to gain an unfair advantage by sending the Court or its staff correspondence or copies of correspondence. 14. I will not arbitrarily schedule a depo- sition, court appearance, or hearing until a good faith effort has been made to schedule it by agreement. 15. I will readily stipulate to undisputed facts in order to avoid needless costs or inconvenience for any party. 16. I will refrain from excessive and abusive discovery. 17. I will comply with all reasonable discovery requests. I will not resist discovery requests which are not objectionable. I will not make objections nor give instructions to a witness for the purpose of delaying or obstructing the discovery process. I will encourage witnesses to respond to all deposi- tion questions which are reasonably under- standable. I will neither encourage nor permit my witness to quibble about words where their meaning is reasonably clear. 18. I will not seek Court intervention to obtain discovery which is clearly improper and not discoverable. 19. I will not seek sanctions or disquali- fication unless it is necessary for protection of my client's lawful objectives or is fully justified by the circumstances. IV. LAWYER AND JUDGE Lawyers and judges owe each other respect, diligence, candor, punctuality, and protection against unjust and improper criti- cism and attack. Lawyers and judges are equally responsible to protect the dignity and independence of the Court and the profes- sion. 1. I will always recognize that the posi- tion of judge is the symbol of both the judi- cial system and administration of justice. I will refrain from conduct that degrades this symbol. 2. I will conduct myself in Court in a professional manner and demonstrate my respect for the Court and the law. 3. I will treat counsel, opposing parties, the Court, and members of the Court staff with courtesy and civility. 4. I will be punctual 5. I will not engage in any conduct which offends the dignity and decorum of proceedings. 6. I will not knowingly misrepresent, mischaracterize, misquote or miscite facts or authorities to gain an advantage. 7. I will respect the rulings of the Court. 8. I will give the issues in controversy deliberate, impartial and studied analysis and consideration. 9. I will be considerate of the time con- straints and pressures imposed upon the Court, Court staff and counsel in efforts to administer justice and resolve disputes.