Beautiful female lawyer on retainer

What Does It Mean to Have a Lawyer on Retainer?

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If you’re thinking of hiring an attorney for your business, the first thing you’ll need to do is “retain” them. This is the term used to describe the process of creating an attorney-client relationship with that particular lawyer and involves paying a lawyer retainer fee in exchange for legal representation.

A lawyer retainer is most useful for individuals and businesses that require a considerable amount of consistent legal work but cannot afford to hire a lawyer on a full-time basis. How does a lawyer retainer work, and what exactly does it cover? Here’s everything you need to know about it.

What Is a Retainer Fee for a Lawyer and How Does It Work?

A retainer fee is the upfront payment made to a lawyer in exchange for legal representation. The amount is usually paid in advance for services to be rendered.

The specific amount you’re required to pay will depend on several factors, one of which includes how complex your legal issues are. Having a lawyer on retainer means that you’ll be paying them a fixed amount of money periodically for the duration you’ll need them.

While the idea of having a lawyer on call might sound appealing, there are a couple of things you need to consider before taking this step.

1. Why Do You Need the Attorney?

Unless you’re involved in a serious accident, you may find that you only require legal representation once every few years. If that’s the case, you don’t need to have a lawyer on retainer.

2. Have You Checked Your Insurance Policies?

Make a point to go through the fine print in your insurance policies. Most of them usually pay for attorney representation if you’re ever involved in an accident or incident. This is generally the case for car and homeowner’s insurance. You, therefore, don’t need to pay an attorney out-of-pocket to fight any potential lawsuits you might be facing.

3. What About Your Employee Benefits?

If you work for a large organization or you’re a member of a union, there’s a good chance that a lawyer on call might be part of your benefits. They deal with most routine legal issues, including real estate matters, wills, and certain lawsuits. It doesn’t make financial sense to have another lawyer on retainer when your employer already has one for you.

Retainer vs. Retainer Agreement – What’s the Difference

Having a lawyer “on retainer” and “retaining a lawyer” may sound the same, but they’re not. When you “retain” a lawyer, it means that you have contracted them for your legal issues. The money you then pay to them is referred to as the retainer. Having them “on retainer” means you’ll be paying them periodically over an extended duration to handle your legal issues on an ongoing basis.

Once you hire an attorney, you’re required to sign an agreement. This contract is known as a lawyer retainer agreement. It details the obligations of both parties, the contact rules, the attorney-client terms, expectations, retainer fees, etc.

A retainer agreement will often vary in content and length depending on the terms. However, regardless of the type of case or jurisdiction, retainer agreements will usually have the following parts.

Nature and Scope of the Work

The agreement needs to provide details on the kind of work the client expects the attorney to do on their behalf. It also needs to specify the type of case they will be representing the client in. Some retainer agreements may go a step further by specifying the behavior and actions the attorney won’t engage in.

Retainer Fee

The agreement will always indicate the amount charged to the client. It provides a detailed breakdown of how the figure was arrived at and the specific charges for each service rendered. For instance, if there’s a flat fee to be charged for a particular project or specific case, this will be indicated on the lawyer retainer agreement.

Client Expenses

There are certain expenses that clients are usually expected to cover. These may include travel expenses or filing-related costs. There is also a set amount the client is required to pay, whichever way the case goes. An attorney retainer agreement should always specify these expenses.

Other Terms

In addition to the standard terms outlined above, a lawyer retainer agreement may also include:

  • An avenue for fees arbitration if a dispute arises
  • Conflict checks
  • No guarantee of the case result
  • The privacy policy of the attorney and their law firm detailing what happens to the client’s files and property once the case concludes
  • The right for the attorney to withdraw representation
  • The right for the client to terminate the contract with the lawyer
  • Whether contract lawyers, paralegals, or associates will need to be brought onto the case, and the associated expenses for each

What Does a Lawyer Retainer Fee Cover?

Man discussion with Lawyer

Right off the bat, it’s important to keep in mind that a retainer is not supposed to cover the entire cost of a legal issue. Think of it as an advance payment for a specific number of hours of the lawyer’s services and the costs associated with starting your case. There are generally three types of retainers:

  1. A general retainer: This contracts the attorney’s services for a specific duration as opposed to a specific case/project.
  2. A retaining fee: This refers to a lump-sum deposit paid into a trust account in advance. The lawyer withdraws against the available balance as they complete specific tasks on a case/project.
  3. A special retainer: This is a fixed lump-sum amount paid to a lawyer to take on a particular case/project. This arrangement, however, is prohibited in some states since the client cannot discharge the attorney until the conclusion of the case/project.

The average retainer fee for a lawyer is not standard. Some lawyers may charge $1,000, while for others, it may be as high as $1,000,000 or more. It ultimately depends on the lawyer in question, as well as the nature and scope of the legal services you’re hiring them to do.

Final Thoughts – Can You Get a Retainer Back From a Lawyer?

The language of the retainer agreement would ideally control what portion of the retainer you can get back from a lawyer. Remember, retainers are earned upon receipt. As the lawyer continues to work on your case/project, they withdraw against the balance in the trust account. If there’s any money left from the retainer, you would be entitled to getting it back.

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