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Retainer and Contingency Agreements

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What is a Retainer and Contingency Agreement?

A Retainer and Contingency Agreement is a type of contract between a lawyer and their potential client for an upcoming lawsuit.  The agreement generally covers important matters like the lawyer fees, as well as the terms of the attorney-client relationship.  Such agreements cover two aspects of the relationship:  the retainer fee agreement and the contingency fee provisions.

A retainer agreement usually covers the retainer fee that the client pays the attorney before hiring them.  A retainer fee is a specified amount of money that the client pays in order to demonstrate that they’re serious about hiring the lawyer and retaining their services throughout the duration of the case.  It is similar to a “down payment” in that it may be a portion of the overall attorney fees.

A contingency fee provision, or contingent fee agreement, covers the rest of the payment that is to be made to the lawyer at the conclusion of the case.  A contingency fee provision usually states that the lawyer will be paid a certain amount of any monetary damages award that the client wins as a result of the lawsuit.  Thus, the attorney’s fee is “contingent” upon the amount of damages that the client gets overall.

What Should be Contained in a Retainer and Contingency Agreement?

Thus, the retainer and contingency fee agreement covers:

  • Details about the Retainer fee:  how much the lawyer will be paid at the outset of the case, and whether the lawyer can access the money during trial to pay for expenses related to the case
  • Details about the Contingency fee:  What percentage the attorney will be paid, whether they will be paid in installments, etc.
  • Names and contact information of all parties involved in the agreement
  • What should happen in the event that the agreement is violated
  • Any other important items or instructions for the parties

Also, the laws governing retainer fees and contingency fees may be very different from state to state.  For example, some states may limit the contingency fee to an amount that is reasonable in light of the circumstances.  Thus, a retainer and contingency fee agreement must follow all the rules and regulations that apply in that particular jurisdiction.  

What if a Retainer and Contingency Agreement is Violated?

Retainer and contingency agreements are basically contracts, so they are subject to various principles of contract law.  Thus, a violation of a retainer and contingency agreement would be treated as a breach of contract.  In such cases, the non-breaching party is usually entitled to collect a monetary damages award to cover any losses caused by the breach.

For example, suppose that the attorney attempts to collect more than they are entitled to, and withholds their legal services unless the client pays them more.  This would be considered a breach of contract, and the client may then file suit against the attorney.  Note that if the client sues their attorney, they would be required to find a different attorney to handle the legal proceedings.

Do I Need a Lawyer for Help With a Retainer and Contingency Agreement?

Retainer and/or contingency agreements are crucial for a proper attorney-client relationship to exist.  If you have any questions or disputes regarding a retainer and contingency agreement, you may wish to contact a lawyer for advice.  Your attorney can help answer your questions and can represent you in court in the event that a lawsuit becomes necessary.

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 08-15-2012 03:07 PM PDT

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