Can I upload engagement letters created before joining Client Engager to individual client records?

Yes. Upload them under the client record's Documents > Files section, for example in the Engagement Letters folder.

If the client has portal access, they can see files in shared folders, and the Engagement Letters folder is shared by default. If you don't want them to see the file, put it in a top-level folder that isn't shared with the client.

For a business client, you can also use restrict access to top-level folders on the client record to control which shared folders each related individual can see.