What is a retainer for a lawyer? It’s a common question. Many people have heard the term “legal retainer” and understand the basic idea, but when it comes time to actually hire an attorney, the questions become more detailed. Most individuals know the general concept, yet they’re still left with several nuanced questions such as:
- What is a retainer for a lawyer — exactly?
- Is a legal retainer just extra fees?
- How long is a lawyer retainer good for?
- How does a lawyer retainer work?
What is a Retainer For a Lawyer — Exactly?
nce an attorney has undertaken representation of you in a legal matter, certain ethical obligations attach. Where an attorney is registered as counsel of record in an ongoing court case, for example, an attorney cannot simply stop working.
They must have a Substitution of Attorney form signed by the client and judge or, in some cases, seek special permission to withdraw from representation from the judge. That process can require pleadings, hearings, etc., which can take a month or more to accomplish.
Even when an attorney does not represent you in court, your client agreement sets out a scope of representation, and a hired attorney will have an obligation to ensure that your interests are not harmed, even if that scope cannot be fulfilled.
Sometimes clients part ways with counsel in a hostile manner (the client stops responding to the attorney, the client wants to fire the attorney, etc.). Sometimes tragedies occur – a client death or incapacity, for example.
In any of those situations, there is a strong likelihood that additional work will be needed to ethically wrap up the representation. Because of this, most legal malpractice carriers require or recommend that lawyers collect a retainer. Think of it like insurance, or when a hotel puts a hold charge on your account when you check in.
Is a Legal Retainer Just Extra Fees?
Retainers are not additional fees. Instead, your retainer will be placed into a secure client trust account. When your invoice is issued each month, it will be paid out of the retainer. You will be asked to replenish the retainer. At the conclusion of representation, all unearned fees in the client trust account will be returned to you.
How Long is a Lawyer Retainer Good For?
A retainer fee isn’t always going to be the same lawyer to lawyer. In fact, a legal retainer might differ case-by-case within the same law firm. It can vary based on and if it has a specific rule regulating legal retainers. It can vary based on the case complexity too.
One easy way to think about a retainer is that it’s kind of a pre-payment. It’s almost like an upfront payment for services that are about to happen. Think of it this way, when you purchase a coat, you buy it before you get to wear it. A legal retainer is buying a specific amount of a lawyer’s work in advance. If the funds are exhausted before the case is complete, a new retainer may be needed or a different arrangement for fees will be agreed upon.
How Does a Lawyer Retainer Work?
When it comes to understanding how retainers work, it’s probably most helpful for you to simply see an example:
January 1: You have your initial consultation with attorney, and you’re quoted approximately $1600/month, based on estimated hours and expected fees for copies or postage, with a $5,000 retainer.
January 2: You decide to hire the attorney. You pay the $5,000 retainer. The lawyer places the amount of the retainer into a designated trust account. (Now, remember when we called it “kind of a pre-payment” and “almost like an upfront payment”? That’s because lawyers don’t take your money and use it right away. It sits in a trust account until the lawyer bills you. Then, payment is taken out of that account.)
February 2: The attorney performs work for you.
February 2: The law firm prepares an invoice for $1805 because a couple more hours were spent on your case than expected and there was also a $5 postage expense. The invoice of $1,805 is deducted from your trust account. You receive the invoice showing a deduction. At this point, you will usually be asked to send in $1,805 to replenish your trust account back to $5,000.
This repeats monthly until the matter concludes, with expenses varying as incurred (if at all).
March 15: The matter has concluded. Your final invoice is issued and the amount you owe for the final month is deducted from the trust account. At this point, any balance of funds left in the trust account is returned to you.
LloydWinter, P.C Billing Plans
We understand that retainers can feel complicated and worrisome to many people when they are based on a lawyer’s hourly rate. Paying a large retainer fee upfront not knowing how to determine how many hours is actually spent on your case can feel frustrating.
That’s why LloydWinter, P.C. offers stable rather than an hourly rate. If you need a who you can count on with a billing plan you can rely on, contact us today.
