A Legal Retainer Agreement is a contract between a client and a lawyer or attorney who provides legal services. The retainer serves as prepayment for legal services to be rendered, which may include everything from creating a legal contract to preparing for trial.
Attorneys may require a retainer and subtract work performed from the retainer over time, or they may accept a retainer to reserve their services but charge hourly for all services provided. The value of a legal retainer agreement depends on the scope of services the attorney provides.
A legal retainer agreement template can streamline the contracting process and ensure you do not overlook critical details.
- Divorce proceedings
- Custody and child support proceedings
- Civil court cases
- Criminal court cases
- Contract drafting and review
- Writing letters and legal correspondence
- Insurance claim negotiations
- Arbitration and mediation proceedings
What Is a Retainer For a Lawyer?
A retainer for a lawyer is a fee the client pays upfront for an attorney’s professional services. The fee may cover the costs of a specific service, such as writing a cease-and-desist letter, or it may encompass a range of services charged at the attorney’s hourly rate.
Once they sign a retainer agreement, the attorney agrees to provide the legal assistance outlined in the scope of work. If the client asks the lawyer to provide services outside the agreed scope of work, they may invoice those services separately.
How a Lawyer Retainer Works
The terms of a lawyer retainer agreement vary widely depending on the case details. Typically, a lawyer retainer works as follows:
1. Sign the Legal Retainer Agreement
The attorney and client review the terms of the attorney retainer agreement and sign. Begin with a legal retainer agreement template to streamline the process.
2. Receive the Retainer
At the time of the agreement, the client pays the agreed retainer to the attorney. Depending on the terms of the agreement, the client may pay a single retainer as a down payment for the attorney’s services. Alternatively, they may pay a periodic retainer fee to continuously retain the attorneys’ legal assistance, for example, as a legal consultant for a business.
3. Hold the Retainer in Trust
Typically, the attorney holds the retainer in trust while they perform services for the client. They deduct the billable hours and services consistent with the retainer agreement terms.
4. Log All Hours and Deduct From Retainer
Logging hours is critical for transparent accounting when dealing with an attorney retainer agreement. Logging hours ensures the client knows how you are spending their retainer. It also assures them that you are working on their case, even when progress seems slow.
5. Replenish Retainer at Threshold or Depletion
As the client’s legal matter progresses, it is not unusual for the retainer to be used up. The legal retainer agreement should specify if the client must replenish the retainer once it reaches a certain threshold or if fully depleted.
6. Invoice for Hourly Services
If there is no clause for retainer replenishment, the attorney may bill for additional services at their hourly rate. This arrangement should be noted in the retainer agreement, or a new service agreement should be written to include rates and payment terms once the retainer agreement is terminated.
What to Include
A lawyer retainer agreement typically includes the following details:
- Name and address of the client
- Name and address of the attorney or firm
- Agreement date
- Description of the legal matter
- Scope of services the attorney will provide
- Fees, including refundable or non-refundable retainer, hourly rates, flat fees, and expenses
- Invoicing and payment terms
- Retainer replenishment terms, including threshold and automatic payment terms
- Term of the legal retainer agreement, including start and end dates
- Termination clause
- Terms for confidentiality, governing law, severability, and dispute resolution
- Clause voiding prior discussions, arrangements, and agreements between the parties
- Client and attorney signatures
Why Should Lawyers Use a Retainer Agreement?
Both lawyers and their clients can benefit from a retainer fee agreement. Advantages of an attorney retainer contract include:
Provides a Clear Scope of Work
When you create a legal retainer contract, clearly outline the legal services. This ensures that the client knows what to expect from your working agreement. It also prevents misunderstandings or legal issues arising from vague or ambiguous expectations.
Establishes Trust Between Attorney and Client
An attorney-client relationship is based on trust. With a retainer agreement, the attorney knows they will be paid for their services, and the client has an established relationship with an attorney familiar with their situation.
Creates the Basis for a Long-Term Relationship
A retainer fee establishes a long-term relationship between the client and their lawyer. This is especially useful for clients who have ongoing legal needs. Keeping the attorney on retainer lets the client know they can access trusted legal advice and assistance when needed.
Start your contracting process with this fillable legal retainer agreement template, available in PDF and Word format:
Best Practices for Lawyer Retainers
While some clients may balk at a retainer, there are steps you can take as an attorney to foster trust through transparency.
1. Clearly Define the Scope of Work
A clear scope of work is crucial for a successful retainer agreement. The client should understand what they receive in return for paying the retainer. They should also understand what is not included in the contract. By managing expectations in advance, you ensure a healthy business relationship.
2. Set a Clear Fee Structure
Clients appreciate transparency, especially when it comes to payment terms. Ensure that your fee structure is clearly outlined in the retainer agreement. Include a fee schedule with exceptions or additional costs so the client is not surprised by additional expenses.
3. Establish Trust Accounting Procedures
Most attorneys must hold the retainer in a dedicated trust account and subtract their fees and costs through periodic invoicing. The retainer agreement should outline how the attorney’s costs and fees are calculated, including hourly rates, expenses, and fees.
Invoices should go to the client weekly, bi-weekly, or monthly to advise the client of how much of their retainer has been used. Transparency is vital, so include line items and descriptions for all hours worked and expenses paid.
Frequently Asked Questions
How Long Does an Attorney Have to Return a Retainer?
The time an attorney has to return a retainer depends on the terms of your contract and your state and local laws. Some must return retainers within 14 or 30 days, while others require only that the attorney return the retainer within a reasonable time.
Will My Attorney Refund My Retainer?
Your attorney will refund your retainer if it is refundable per your contract and if there are funds remaining after they deduct the services they provided.
If your retainer is non-refundable, you may be able to request a refund, but your request may be denied, especially if the attorney provided legal services per the contract.