Understanding how attorney retainers work is vital for maintaining commitment, budgeting effectively and building trust with your legal representative. A retainer is a lump sum payment made into their trust account which will then be deducted as they accrue billable hours and expenses related to your case.
Understanding how these deposits are renewed and replenished as their levels decrease is also essential.
Retainer Agreements
Retainer agreements are contracts designed to secure the services of a lawyer for an extended period, for a set fee upfront. This arrangement ensures that their attorney is always available when needed, saving clients the hassle of scheduling new appointments every time something small needs doing and freeing lawyers up to focus on more pressing cases.
Retainer amounts vary based on the nature and complexity of a matter, with litigation matters often taking longer and requiring additional personnel, so higher retainers are usually necessary at the outset.
Agencies that work on retainers can foster strong client relationships while also increasing visibility into projects. But to fully benefit, agencies need a thorough understanding of how retainers work and the various considerations involved – Rocketlane can assist by consolidating all your retainer processes into one location.
Retainer Fees
People familiar with legal matters are likely familiar with the idea of having an attorney “on retainer.” A small business or individual may want to pay an attorney a set monthly fee so they have them readily available if needed.
Retainer fees can often be confusing and frustrating for both attorneys and clients alike, which is why understanding their working definition and operation is essential to establishing an equitable arrangement between all parties involved.
The three main forms of retainer agreements include a general retainer contract, retaining fee and special retainer. A general retainer contract includes a fee that must be paid over an agreed upon period (usually 6-12 months), then deposited into an attorney trust account to be used as needed when working on cases, with any funds left over being returned at the end. Retainer fees typically cover costs related to services provided while special retainers cover unique tasks or projects.
Retainer Renewals
Retainers offer clients peace of mind that attorneys will be available when needed without worrying about finding an attorney at short notice. In turn, lawyers can dedicate their time and expertise knowing that an upfront fee will cover a predetermined amount of work.
When setting retainer fees, make sure that they cover expected workload while being competitive and reflecting experience and industry norms. Consider implementing an internal task management system that automatically tracks and reports on hours worked to prevent miscommunication with clients and ensure transparency regarding work completed. Establish procedures for dealing with situations in which your retainer expires before your matter has been concluded. Include such provisions in your initial retainer agreement so as to avoid confusion or misunderstandings later on. Give Lord, Kobrin, Alvarez & Fattell a call now so we can assist with your legal needs!
Retainer Refunds
Retainers give lawyers financial security that their work will be compensated and help prioritize a client’s case. Retainers play an essential role in commitment, budgeting and building trust between attorneys and clients.
Retainer amounts are determined by the scope and complexity of each case, with litigation cases typically necessitating larger retainers due to longer timelines, more personnel working on them, and greater administrative services costs.
Note that a retainer is not a deposit or entry fee – rather, it serves as a prepayment for future legal services and should only be considered income when legal work has actually been performed by an attorney. Furthermore, all unused retainer funds must be returned back to clients at the conclusion of an issue; this ethical responsibility of attorneys. Furthermore, replenishment requests should reflect services actually rendered on an issue.