Updated on February 11th, 2023
A legal (attorney) retainer agreement is a contract between a lawyer and their client where the lawyer’s services are secured by a set fee before any work is performed. To ensure the attorney’s availability, the client will pay an amount up front, giving them access to legal services on demand.
The document contains all the provisions necessary to create a fair arrangement for both parties, such as the retainer fee amount, additional compensation amount and payment method, the length of the agreement, the services to be performed, and other important terms and conditions.
Function of a Legal Retainer
A retainer agreement that reserves the services of a legal professional is used when an individual or entity requires ongoing legal representation. The client may require their services for a particular court case or they may want the privilege of requesting legal advice when the need arises. A legal retainer agreement does not create an employer-employee relationship between the client and attorney, and either party can terminate the agreement if the other breaches the terms of the contract.
How to Set Up a Retainer
When an attorney and a client enter into a legal retainer agreement, they will discuss what types of services the client needs and the length of the arrangement. The lawyer will then disclose the amount of the retainer fee, which will be based on the nature of the services required.
A trust account will hold the retainer fee, allowing the attorney to draw on it when they have spent billable hours working for the client or have incurred any expenses. If they did not use the full amount, the client may be reimbursed the remainder. On the other hand, if the retainer hasdi been spent, the proposed payment method described in the retainer agreement will go into effect.
Reasons for Using a Retainer
A retainer agreement can be used for a singular case, or to retain an attorney’s services indefinitely. A person or entity may enter into a legal retainer agreement with a lawyer to benefit from any of the following services:
- Representation in court and administrative/legislative hearings (e.g., divorce, criminal actions, personal injury)
- Mediation or arbitration
- Preparing, reviewing, and filing legal agreements, corporate documents, leases, wills, and court forms
- Intellectual property acquisition and enforcement; reviewing/filing patents and other IP documents
- General legal advice and information