What is a Retainer Agreement? May 13, 2010

A retainer is an agreement between a client and his or her lawyer that spells out the terms of the business arrangement between them.  In other words, the retainer is the contract between the client and the lawyer.

A good retainer should make clear the responsibilities of both attorney and client and make clear the financial arrangement. A well-written retainer agreement will spell out the details of the business relationship and no one will need to consult it again. We tend to look back to contracts only when a problem develops and in those circumstances, a good retainer should provide clear answers to any problems or questions.

A good retainer should be written in plain English and readily understandable by all parties. Many retainers do not meet this requirement; they are full of legal mumble jumbo, which may accurately depict the relationship, but are not understandable by the typical client.

I have a confession to make here. For years, I used just such a retainer, one I picked up from another attorney who had gotten it from an older attorney. The document may have made sense to lawyers, but no one else. I would spend a long time with each client trying to decipher the “lawyerese.” I have since rewritten my retainer so it the layout and language benefits my clients. My clients much prefer the new, plain English retainer.

The retainer should spell out all aspects of the business relationship:

Services to be provided by the attorney: The retainer should identify the services the attorney will provide. A good retainer should also specify what services are not covered by the agreement. For example, my retainer excludes appeals work and specifies that any work on an appeal would require a separate agreement.

Actions required of the client: A good retainer should identify the obligations of the client in the relationship, such as appearing for appointments and legal proceedings. All business relationships require the cooperation of both parties and making that clear in the retainer proves helpful in the end.

Legal Fees: Attorneys have many types of fee schedules. As a personal injury attorney, I charge a percentage of whatever award or settlement I deliver to my client. Some criminal attorneys charge a flat fee for pre-trial work while others charge an hourly rate. Some attorneys charge flat fees for certain services (e.g., drawing a simple will). The retainer agreement should spell out the fee arrangements.

Expenses: The retainer should spell out the expected types of expenses.  As a personal injury attorney, my retainer specifies that the client is responsible for expenses, though typically I advance the expenses and receive reimbursement at the conclusion of the case.  Some attorneys charge clients for expenses on a pay-as-you-go basis, while others incorporate expenses into their flat fees.

Timing of Payments: The due date for payments is as varied as the fee schedules offered by attorneys. As a personal injury attorney, I take cases on a contingency basis, meaning my clients pay nothing upfront and only pay my legal fees if I win them money on the case. I collect my fee only after we receive payment on the case.

In some fields – such as criminal law – an attorney might charge a flat fee payable upfront or require a retainer payable in advance of providing services. Some attorneys expect payment upon completion of a service (e.g., closing on a house). Some attorneys will bill clients each month for services rendered.

Retainer Fees: Some, though not all attorneys, will request a retainer payment. As a personal injury attorney, I do not request a retainer payment. A retainer functions as a combination down payment and advance on services. For example, an attorney might expect total services to reach $10,000, so he might ask for a $10,000 retainer fee. The client will pay that fee and then the lawyer will draw down from that fee to pay his expenses and fees. If there is money left at the end of the engagement, the attorney will return the balance to the client. If expenses exceed the original retainer fee, then the attorney might bill on a pay-as-you-go basis or might require a second retainer payment.

Dissolving the Relationship:   Attorneys and clients anticipate that their business relationship will be harmonious.  However, sometimes the attorney or the client may seek to dissolve the relationship. The retainer agreement should specify the process under which either party may terminate the agreement. Clients have the right to change attorneys at any time and to receive their records and files; however, clients must pay for the services rendered by the attorney. The Attorney’s Code of Conduct imposes restrictions on when and how attorneys can withdraw from a case. While no one thinks of dissolving a relationship when it just begins, a good retainer will include these provisions just in case.

Good Retainers Make For Successful Client-Lawyer Relationships

Clients and attorneys all benefit from clear, well-organized and well-written retainers. If you are a client, you should understand that the attorney does not become your legal counsel until you sign the retainer agreement. If you do not understand something in the retainer agreement, ask a question. If you do not like the terms of the agreement, you are under no obligation to sign it.

I hope you found this information helpful. Please call or email me if you have comments or questions or would like assistance with a case. You can also visit my website or my blog New York Law Thoughts to learn more.

Carol L. Schlitt
New York Personal Injury Attorney
www.SchlittLaw.com
1-800-660-1466
Carol@SchlittLaw.com

This material is intended for informational uses only. It is not meant as legal advice. To receive legal advice, you should consult an attorney.