What Is a Legal Retainer Fee?
A retainer usually means an upfront payment a client makes to a lawyer before work begins. Most often it is an advance fee deposit placed in a client trust account, and the lawyer bills hourly work against it, sometimes requiring you to replenish it. Any unearned portion must be refunded when the representation ends. A true retainer, paid only to secure a lawyer's availability, is less common and treated differently.
Retainers confuse many clients because the word is used for different arrangements.
Types of retainers
| Type | How it works |
|---|---|
| Advance fee deposit (most common) | You pay a sum upfront; the lawyer holds it in a client trust account and withdraws money as fees are earned |
| Evergreen retainer | The deposit must be replenished to a set level as it is used |
| Flat fee paid in advance | A set fee for a defined task; whether it can be treated as earned on receipt depends on state rules |
| True (general) retainer | Payment to secure the lawyer's availability, not for specific work; less common |
Trust accounts
Ethics rules require lawyers to deposit advance fees and costs into a client trust account and withdraw them only as fees are earned or expenses incurred (ABA Model Rule 1.15(c)). The lawyer must keep records and account to you.
Refunds
When the representation ends, the lawyer must refund any advance payment of fees or expenses that has not been earned or incurred (Model Rule 1.16(d)). "Nonrefundable" labels do not override the requirement that fees be reasonable (Model Rule 1.5).
How billing works
With hourly billing, the lawyer records time, often in increments such as tenths of an hour, and sends invoices showing work performed and the amount deducted from the retainer. Ask for itemized bills.
Questions to ask before paying
- Is this an advance deposit held in trust, or a flat fee?
- What is the hourly rate for each lawyer and paralegal?
- Will I need to replenish the retainer, and when?
- What costs are separate, such as filing fees, experts or depositions?
- How often will I get bills?
- What happens to unused funds?
Get the fee agreement in writing. The ABA Model Rules say the basis of the fee should be communicated, preferably in writing, before or soon after starting representation (Model Rule 1.5(b)).
Disputes
Many state bars offer fee arbitration programs for disagreements about fees.
Other fee types
Personal injury and some employment cases use contingency fees instead; see contingency fees.
A retainer agreement is a contract; read it carefully before signing. Compare lawyers and their fee structures.
Sources
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This article is general legal information, not legal advice, and reading it does not create an attorney-client relationship. Laws differ by state and change over time; talk to a licensed attorney in your state about your situation.