A retainer is a fee paid to a person (usually a lawyer) before any services have been performed. Most attorneys require a retainer agreement, a “work for hire” contract.
This document generally includes the type of work the lawyer is doing for the client, all associated fees, and the general rights of both parties agreeing.
What Are Attorney Retainer Agreements?
Attorney retainer agreements are used for securing the services of a lawyer. Most retainer agreements involve a one-time fee paid as a sort of down payment before the trial begins. This helps secure the lawyer’s services and indicates that the client is interested in hiring that attorney.
The retainer fee may help fund the attorney’s work as the case progresses. For this reason, the funds are often placed in a separate bank account solely dedicated to the lawsuit.
What Is a Retainer Fee?
A retainer fee is an advance payment that a client makes to their attorney before the attorney conducts any legal work for the client. It is comparable to an allowance in that the attorney can draw funds for miscellaneous fees as the case proceeds.
Retainer fees are almost always required for cases involving a trial or a lawsuit. The retainer amount differs based on the type of lawsuit or case. Retainer fees are usually worked out through a retainer fee contract, which is a contract stating the amount of money to be paid and how it can be used.
What Are the Benefits of Retainers?
A client may choose to pay using a retainer fee to show that they are earnest about their case and hope to retain the attorney’s services. Retainer fees help to establish a harmonious attorney-client relationship. It implies that the client can trust the attorney with their funds and that the two are ready to work together.
Retainers are useful for both the attorney and the client because it allows the client to manage how much they spend and ensures that the law firm is paid for the work they do. Traditionally, when the retainer account gets low or has been fully used, the client either refills the account or can choose to terminate the services.
Usually, the funds from a retainer fee are placed in a separate account from the attorney’s funds. This ensures that the attorney will not use the money for their purposes before services are rendered. Further, all costs and hours worked are entered with descriptions and provided to the client.
Are There Other Types of Fees?
While retainer fees are the more conventional way of paying for legal services, another typical type of payment is called a contingency fee.
This fee differs from a retainer fee because the attorney does not request upfront money. But instead, the attorney is paid by taking a percentage of the client’s financial award. The risk is solely on the attorney because the attorney receives nothing unless the client wins the case or obtains a settlement agreement.
What Are Unearned and Earned Retainer Fees?
“Unearned” retainer fees refer to the money placed in the retainer account before the attorney has earned them. This would be the “allowance.”
The attorney cannot touch this money until they have documented “earned” fees that include logged hours, materials, or additional overcost fees. A well-written retainer fee agreement will be clear about how unearned and earned monies are defined.
What Is a Retainer Fee Dispute?
The most typical dispute is with “leftover’ funds. This happens when lawyers fail to return the leftover funds promptly, or the relationship ends on unfavorable terms, and the client and lawyer differ on what should be paid on the final bill.
Another typical dispute is where the attorney uses retainer money before earning it. This is usually the result of a poorly-written retainer fee agreement.
What Are Some Attorney Retainer Agreement Conflicts?
A retainer agreement can be subject to a breach of contract like any agreement. Some common attorney retainer agreement conflicts may include:
- Disputes over the amount of legal fees to be paid
- Disputes over the type of bank account to be used
- Conflicts over the use of the retainer fee payments
In particular, problems can appear if the client needs to hire a new attorney in the middle of the lawsuit. In most circumstances, retainer agreements state that the retainer fee can’t be refunded, even if the attorney is hired mid-litigation. Of course, such terms will be subject to change and the individual client’s needs and preferences.
Breaches of lawyer retainer agreement contracts can result in various legal remedies, including a damages award for losses or a court order requiring payment of funds.
What Can I Do If I Don’t Agree with My Legal Bills?
One of the most significant areas of dispute between attorneys and their clients involves how much the client has to pay in legal fees. Often, there is simply a miscommunication regarding the lawyer’s fee structure. Other times, the lawyer might have made a blunder on the bill. Unfortunately, however, a few attorneys are out there who inflate their prices, forcing clients to pay unreasonably expensive legal fees.
Due to the high expense, copious amounts of time required, and the difficulty of taking your attorney to court, many people simply pay the bill. However, an easy, low-cost method is to resolve a fee dispute with your lawyer through fee arbitration.
How Does Fee Arbitration Work?
State or local bar associations generally run fee arbitration programs. In fee arbitration, an independent third party (the arbitrator) will hear the lawyer and the client explain their sides of the story. The arbitrator will then decide what the appropriate bill should be and either direct the client to pay the bill or have the lawyer refund or lower the cost of the bill.
Fee arbitration is usually free or provided at a low cost, and cases that undergo arbitration can generally be settled within 2 to 3 months.
If you are interested in finding out whether fee arbitration is available in your area, you should contact your state or local bar association. Most state bars offer live help regarding arbitration programs via telephone. Also, many state bar associations include fee arbitration information on their websites and downloadable forms to get the process started.
What Is Attorney Malpractice?
Attorney malpractice is not simply when an attorney loses a case for their client. When a client is in a situation where they need an attorney’s help, it usually means the issue has become too difficult to resolve.
In some circumstances, an attorney can make an individual’s situation worse instead of better. When individuals hire an attorney to represent them, that lawyer is bound to provide competent and professional services.
If an attorney does not provide competent and professional services, and their client suffers damages, the lawyer may be responsible for those damages. If an attorney makes a severe error, their client may consider using them for malpractice.
Do I Need a Lawyer for Assistance with a Retainer Conflict?
Retainers and other legal fee arrangements can often present some tough legal challenges. It may be necessary to contact a lawyer if you have any issues, disputes, or conflicts regarding legal services. Your lawyer can explain your options and how to proceed with filing a claim. Also, a qualified attorney will be able to notify you of any updates or changes to the laws in your area.