What does it mean to have a lawyer on retainer?

Having a lawyer on retainer means you pay a fee up front to secure the lawyer's services either for handling a specific case or for a specific period. This payment establishes an ongoing attorney-client relationship, ensuring the lawyer's availability when you need legal assistance.

For individuals, having a lawyer on retainer ensures you have professional guidance readily available for current legal matters or potential issues that may arise. For businesses, it provides immediate access to legal advice without having to search for representation during critical situations.

Types of retainer fees

Different legal situations call for different types of retainer arrangements. Understanding these distinctions can help you determine which option best suits your legal needs.

General retainer

A general retainer, also known as an availability retainer, is a fee paid to secure a lawyer's availability for a specific period. This type of retainer doesn't apply to the lawyer's hourly rate for actual legal services performed but instead ensures the lawyer will be available when needed.

General retainers are particularly valuable for clients who want continuous access to legal advice but don't necessarily have immediate legal issues to address.

Special retainer

A special retainer, or security retainer, is an advance payment for specific legal services. This fee covers the cost of work the lawyer expects to perform. Unlike a general retainer, the fee is deposited into a client trust account and drawn from as the lawyer performs work on the case.

Advance payment retainer

An advance payment retainer involves paying a lawyer up front for future services, but unlike a special retainer, the funds become the lawyer's property immediately upon payment. This type of arrangement is less common and typically used in special circumstances.

Lawyer retainer agreement

A lawyer retainer agreement is a formal contract between you and your attorney that outlines the terms of your professional relationship, including payment structure, scope of services, and other important details.

This legally binding document protects both parties by clearly establishing expectations and responsibilities from the outset.

Components of a lawyer retainer agreement

Although lawyer retainer agreements vary depending on the type of retainer and case, a comprehensive retainer agreement should include these important elements:

• Scope of representation

• Contract duration

• Attorney fee structure

• Other fees & billable expenses

• Client responsibilities

• Termination clause

Before signing a retainer agreement, review it carefully and ask questions about any terms you don't understand. You may also want to compare agreements from multiple attorneys to ensure you're getting favorable terms.

How a lawyer retainer fee works

When you pay a retainer fee, the lawyer typically deposits it into a client trust account, separate from their operating funds. As they perform work on your case, they bill against this retainer at their established hourly rate or according to the fee structure in your agreement.

For example, if you pay a $5,000 retainer to an attorney who charges $250 per hour, the retainer covers 20 hours of their time.

When the retainer balance gets low, the lawyer may request a replenishment to ensure continued representation. If your legal matter concludes before the retainer amount is exhausted, they will likely return the remaining funds to you, though this depends on the terms of the agreement.

For ongoing relationships, such as a business retaining an attorney for regular advice, the arrangement might involve monthly retainer payments that cover a predetermined amount of legal work, with additional fees applying for services beyond that scope.

What to consider when hiring an attorney on retainer

Before entering into a retainer agreement with a lawyer, consider these factors to ensure you're making the right decision:

• Assess your legal needs: Determine whether your situation requires ongoing legal support or if a one-time consultation would suffice.

• Review the attorney's expertise: Ensure the lawyer specializes in the area of law relevant to your situation.

• Understand all costs involved: Beyond the retainer fee, ask about hourly rates, additional expenses, and how billing increments work.

• Clarify the refund policy: Ask what happens to unused retainer funds if your case concludes early or if you terminate the relationship.

• Consider the reputation: Research the lawyer's track record, read reviews, and ask for references before committing.

• Evaluate communication style: Make sure the attorney's communication approach aligns with your preferences and expectations.

• Compare multiple options: Consult with several attorneys to compare retainer amounts, fee structures, and overall fit.

• Verify trust account procedures: Ensure the lawyer follows proper protocols for handling client funds in trust accounts.

Investing time in this evaluation process helps avoid misunderstandings and ensures you establish a productive attorney-client relationship.

Why should lawyers use a retainer?

From the attorney's perspective, retainer arrangements offer several advantages that benefit both the practice and client relationships.

Retainers provide lawyers with financial stability and predictable income, allowing them to better manage their practice resources and cash flow. This financial security enables them to dedicate appropriate time and attention to each client's matters without concerns about payment.

Additionally, retainer arrangements help attorneys:

• Establish clear expectations from the beginning of the relationship

• Build stronger, ongoing relationships with clients

• Allocate appropriate resources to each case

• Reduce time spent on billing and collection efforts

• Filter out less serious inquiries and focus on committed clients

• Avoid conflicts of interest by clearly defining client relationships

For clients, working with a lawyer who uses retainer arrangements often results in more dedicated service and clearer communication about case progress and costs.

FAQs about lawyer retainers

Are lawyer retainer fees refundable?

Whether lawyer retainer fees are refundable depends on the type of retainer and the specific terms of your agreement. For a special retainer held in a trust account, the lawyer will typically return the unused portion to the client.

General retainers are often non-refundable since they compensate the lawyer for availability rather than specific services. Always clarify refund policies before signing a retainer agreement.

How much is a lawyer retainer fee?

Retainer fees vary widely depending on:

• The lawyer's experience and reputation

• Practice area and case complexity

• Expected duration of legal representation

• Geographic location

Retainers can range from $500 for simple matters to $25,000 or more for complex litigation or specialized corporate representation. Most general practice attorneys request retainers in the $2,000 to $5,000 range for standard cases.

What happens if my case costs more than the retainer?

If legal costs exceed your initial retainer, the attorney will often request additional funds or begin billing you directly. Your retainer agreement should specify how such situations are handled and whether they'll continue working while awaiting additional payment. Maintain open communication with your attorney about budget concerns to prevent surprises.

Can I negotiate a lawyer retainer fee?

Yes, retainer fees are often negotiable. Consider discussing:

• The possibility of a reduced retainer amount

• Payment plans or installment options

• Alternative fee arrangements like flat fees for certain services

• Limiting the scope of representation to reduce costs

Many attorneys are willing to work with clients to find mutually beneficial financial arrangements, particularly for long-term relationships.