A retainer fee is a type of legal fee that a prospective client pays in order to secure the services of an attorney. Retainer fees are most often paid before a prospective client is considered to have legally retained the services of an attorney. In other words, a retainer fee acts as a sort of “down payment” to help secure a lawyer’s legal services for the prospective client’s case.
In general, a potential client will first undergo a consultation with an attorney where the prospective client will outline their legal issues. After considering the client’s legal needs, the lawyer will then often present the prospective client with a fee agreement.
The fee agreement will typically specify a retainer fee, which the lawyer will collect upfront before executing the contract for legal services and beginning work on the client’s case. Once collected, the lawyer will typically place the retainer fee in its own distinct account, and then bill the client against the retainer as the attorney renders legal services.
In other scenarios, a “retainer” can also refer to an agreement where a specific lawyer remains on call for the same client over a period of time. In these cases, the retainer fee is simply paid to the attorney to be able to call upon the attorney at any time for legal services. In general, this type of retainer agreement is utilized in a corporate business setting.
What Is a Fee Agreement?
As mentioned above, an attorney fee agreement is a written contract that includes the total amount of any retainer that is needed to secure an attorney’s services. Similar to any other major payment or purchase, lawyer retainer fees should always be enacted through a written retainer fee agreement.
Fee agreements are the specific written documents that provide legal proof of the contractual relationship between an attorney and client. A well-written attorney-client fee agreement should contain all of the following information:
- The total amount of any initial retainer payment that is needed before the attorney begins legal services and accepts the prospective client as their actual client, whether or not the retainer is refundable, and how that retainer will be used.
- With regards to retainers, a client’s money will be put into a special trust account, and the lawyer will then deduct legal fees from the account as services are completed.
- A client may then be responsible for reviewing the account periodically and ensuring that the minimum retainer balance is maintained;
- The attorney’s billable rate, along with the billable rates for any support staff.
- Attorneys will often use support staff such as law clerks, paralegals, or even associate attorneys to reduce the overall attorney’s fees for daily tasks that are often involved in managing a case;
- A description of the legal services that are to be performed.
- For example, an attorney-client fee agreement for a breach of contract case will often specify that the attorney is accepting the client and will render services involved with pursuing the breach of contract action.
- This means that the attorney will not be representing the client in other matters outside the scope of services in the fee agreement, such as any criminal matter;
- The contact information for all the parties to the contract, including the attorney, support staff, and the client; and
- The fee structure for other items outside the attorney’s hourly rate, such as fees for filing costs, copies, travel, etc.
It is important to note that all parties involved should always sign the fee agreement. In fact, a fee agreement that both parties do not sign may not be enforceable against either party. Further, a signed copy of the fee agreement should be kept by both parties in case a legal dispute arises regarding the agreement.
What Are the Benefits of Retainers?
As mentioned above, the main advantage of retainer fees is securing the services of a lawyer. Additional benefits of retainers include:
- An assurance that the lawyer will be available to provide legal service for the client;
- The ability for a client to budget and plan for legal expenses ahead of time by tracking the retainer fee account; and
- The ability for the client to monitor their case as work is billed against their retainer.
Retainer agreements also help avoid conflicts of interest, as a lawyer only represents the client who has paid the retainer fee. Moreover, securing the services of a lawyer under a retainer fee agreement may strengthen the attorney-client relationship since the lawyer is committed to providing continuous legal services and support in order to collect fees against the retainer.
What Are Examples of Other Fees Outside a Retainer Fee?
In addition to a lawyer’s retainer and hourly fee, clients are often expected to pay certain other expenses related to their case. As such, these additional expenses should always be discussed before hiring a lawyer. Further, an attorney should be willing to provide explanations of any other fees that may be included in monthly billing statements.
Importantly, any other expenses outside of hourly fees and retainer fees will often be listed in the attorney-client fee agreement. As such, it is important to review the attorney-client fee agreement before signing it.
A client will generally pay for the following other expenses in addition to an attorney’s hourly fee and retainer fee:
- Photocopying charges;
- Long distance telephone charges, if any;
- Courier, postage, and overnight delivery charges;
- Court filing fees, such as the cost of filing petitions, motions, and other legal documents;
- Court reporter and expert witness charges; and
- Reasonable travel and transportation costs, as necessary.
A client generally will not be liable to pay for the following legal expenses:
- Standard secretarial and office staff services, other than the time spent by the support staff working directly on the client’s case;
- Standard office supplies;
- Local telephone charges;
- In-town meals for the attorney or office staff; and
- Unreasonable travel expenses, such as first-class travel costs or overly expensive out-of-town meals, unless stipulated to in the attorney fee agreement.
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What Are Unearned and Earned Retainer Fees?
As mentioned above, a well written attorney fee agreement will outline both how a retainer fee is used, and how the retainer fee is collected. For instance, some fee agreements will specify that the retainer fee is immediately collected in full to secure the services of an attorney.
Earned and unearned retainer fees are two forms of retainer fees utilized in attorney fee agreements. Unearned retainer fees are payments that are made in advance by a client in order to acquire the services of a lawyer that have yet to be earned by the lawyer.
Retainer fees are once again usually kept in a trust account and used to meet legal costs and expenses of the case as they arise. Attorneys then bill against the trust account and earn the fees as services are performed. Unused retainer fees are then refunded to the client after the case is completed if there are any left over.
In contrast, an earned retainer fee is a payment that is paid in advance by a client in order to secure the services of a lawyer that the lawyer earns upon being hired. Earned retainer fees are often not refundable to the client since the lawyer has already earned the fee via the provision of securing legal services.
The main distinction between these two forms of retainer fees is whether or not the lawyer has earned the money upfront or bills against the money and earns it over time. In some cases, an attorney may simply charge a flat fee for handling the entire case in lieu of charging a client a retainer fee to secure their services.
Is It Possible to Recover Attorney’s Fees?
In short, it is possible to recover attorney’s fees in a civil lawsuit, including the initial retainer fee paid to secure an attorney’s services. Attorney fees are often made recoverable through what are known as fee-shifting statutes.
Fee-shifting statutes and rules vary from state to state, but these statutes typically require the loser in a civil lawsuit to pay for the legal fees and costs of the winning (i.e., prevailing) party. The intention behind fee-shifting statutes is to attract lawyers to public interest cases or cases involving less money that would otherwise not seem to be worth an attorney’s time and investment.
Are There Fee Agreements Without Retainer Fees?
As mentioned above, many attorney fee agreements do not require a retainer to be paid by a prospective client. The most common type of fee agreement that does not require a retainer is a contingency fee agreement.
Contingency fee agreements are fee agreements in which an attorney agrees to take the client’s case in exchange for a portion of the money that they are able to recover on the client’s behalf. In general, the fees that the attorney recovers for taking a case on a contingency fee basis will be expressed as a percentage of total recovery.
In a contingency fee agreement, an attorney will agree to represent the client without needing an initial retainer. Then, if the attorney can settle or win the case on behalf of the client, they will take a percentage of the total recovery resulting from the court order or settlement agreement.
For instance, an attorney may agree to represent a client in a personal injury case in exchange for 35% of the total settlement, if the case is settled before the case goes to trial. Then the fee may increase to up to 50% of the total recovery if the case proceeds to trial.
It is important to note that if the attorney does not prevail in the case, then the client will often not be on the hook for their legal fees. However, reviewing the contingency fee agreement is important to ensure that you will not be on the hook for any other fees if the case is unsuccessful.
Do I Need a Lawyer for Help With Retainer Fees?
If you have any questions or issues regarding a retainer fee, it is important to consult with your attorney directly to see if you are able to have your issues resolved. However, if you still have an issue with retainer fees that you have paid on a case, an experienced lawyer may be able to help you recover any ill gotten retainer fees.
An experienced attorney will be able to review your fee agreement and help guide you on whether or not your attorney was following the fee agreement. If it is deemed that the attorney may have committed malpractice, an experienced attorney can initiate a civil lawsuit to help you recover your payments to the attorney, as well as represent you in court, as needed.
