Retainer For Lawyer. Lawyer retainers are often the subject of confusion and misunderstanding for clients and lawyers alike. However, as your client’s legal representative, it’s necessary to be well-informed and transparent about how retainers work to protect both parties and promote a positive client experience.

Retainer For Lawyer
Retainer For Lawyer

In this article, we’ll explore how a retainer for lawyers works and share why lawyers should use them at their firms.

Retainer For Lawyer

When someone threatens to call “their” lawyer, it likely means that they have a lawyer “on retainer.” To have a lawyer on retainer means that you, the client – pay a lawyer a small amount regularly. In return, the lawyer performs specific legal services whenever you need them.

What is a Retainer For a Lawyer?

A retainer is a sum of money you provide to a lawyer or firm to initiate a lawyer-client relationship with that lawyer or firm. A retainer for a lawyer is a payment based on a fee agreement between the lawyer and the client. The retainer amount is paid upfront and is based on the lawyer’s hourly rate or other agreed-upon fee.

However, there are different kinds of retainers you should know about.

Types of Retainers For a Lawyer

  • General Retainer

General retainers are the traditional type of retainer where a lawyer agrees to handle a case or future issues that arise for a client. These agreements can be adjusted for the specific needs of the client, such as periods or preventing the firm from representing competitors, but the goal of a general retainer is to ensure a lawyer’s or law firm’s availability should an issue arise.

The compensation is only for reserving this availability. The lawyer or firm will charge further fees for the services performed. This type of retainer typically only appears where the lawyer or firm has special talents or connections with the client.

  • Advance Payment Retainer

These agreements simply entail prepayment for services the lawyer or firm will perform in the future. Unlike general retainers that merely reserve the lawyer’s time, any type of advance retainer pays for the service. But the payment can go to the lawyer, not necessarily to a trust or special account. Usually, advance fee retainers are all the compensation for the services.

However, in some states, advance payment retainers merely cover expected fees for future services, with the client being responsible for any extra fees that accumulate. These types of retainers receive varying treatment across states, with some disallowing them altogether because of the difficulties posed to clients in getting prepayments returned.

  • Security Retainer

A security retainer is money that you deposit for the performance of future legal services. With this type of lawyer retainer, the attorney does not get to keep the money until they provide the services you are requesting.

When you pay a security retainer, the money goes into a trust or an escrow account (this is sometimes called an IOLTA account, short for “interest on lawyer trust account). The money earns interest, but neither you nor your lawyer gets the interest. The interest usually goes into a state charitable fund to pay for legal services for those who cannot afford them.

The lawyer (and the firm employing the attorney, if applicable) cannot use this money yet. They must earn it first. Depending on the terms of the agreement you make with your attorney, your lawyer may receive this money on a set schedule after performing services or after the attorney has performed all of the specified legal services.

The goal of a security retainer is to ensure you have the funds to pay for the legal services you’re seeking. You may be asked to put more money into this trust account after all of the initial fees have been paid out. And when your lawyer has finished performing services, you may get a refund of unused funds or your lawyer may get to keep any remaining money left over, depending on the terms of your representation agreement.

What are Retainer Fees?

As part of the retainer agreement, you will determine how fees are handled. Hourly rate, flat fee, or contingency. When agreeing to the hourly rate, your lawyer will bill you according to the number of hours of work they do for you. This rate will vary based on the type of work and experience of the lawyer.

Flat fees determine the fixed fee that will be paid, regardless of the number of hours of work done on your behalf. This is typically the case for criminal defense lawyers.

Contingency fee agreements indicate that the lawyer will be paid a percentage of a lump sum settlement or trial award received by you in your case. You will not be responsible for a legal fee if no money is recovered.

Your retainer fee will go into a trust account, and your lawyer will withdraw funds as they complete their work. They will send you a bill detailing their withdrawals, and you may ask at any time how much of a balance remains in the account. At the end of the case, if there is still money in the account and no fees are owed, the remaining funds will be returned to you.

What Is a Retainer Agreement?

A retainer agreement is a written agreement that serves as a contract between you and your lawyer. It is used to help ensure clear communication and avoid misunderstandings between you and your lawyer. If issues arise, such as a fee dispute, you can apply to have the bills reviewed by the court. The agreement may include details such as how and when you and your lawyer will communicate with each other, the legal services to be provided, how fees will be charged, and the consequences of failing to pay.

It will typically also detail what will happen to the retainer fee should either party terminate the relationship. The main purpose of the retainer agreement is to ensure that your dealings with the lawyer go smoothly and that both parties are clear on what to expect.

How Does a Lawyer Retainer Work?

When a client pays a retainer fee, the lawyer agrees to take on the client’s case and provide legal services during the agreed-upon period. This fee is held in a trust account, which can be drawn upon as the attorney provides legal services to the client. Lawyers are not automatically entitled to money from a retainer fee until they have earned it through proof of necessary payment.

As retainers are used to pay for legal services, there will be a natural decline in the trust account balance. Attorneys can navigate a diminishing retainer balance in one of two ways:

Once the balance hits zero, the lawyer may switch to billing hourly or request another deposit.

Include an evergreen retainer clause within the original fee agreement to avoid reaching a zero-balance account.

Why Should a Lawyer Use a Retainer?

Lawyers use retainers for different purposes, but let’s look at some of the benefits of implementing them.


The lawyer is also compensated for making themselves available to you throughout the course of events. If you need your lawyer’s help, they will be there for you. Consequently, as a professional, the lawyer is justified in knowing they will be compensated.

Peace of Mind For Clients

For clients, a retainer provides peace of mind that they have dedicated legal representation and that their attorney will be available to work on their case. This provides a level of assurance to the client that they will have the legal help they need when they need it.

Protection For Both Parties

Using a retainer is an effective means of establishing trust between the attorney and client while protecting both. The client trusts the attorney to safely hold their funds until rightfully earned, and the attorney trusts the client to uphold their financial obligations should the initial retainer fee be exhausted. Furthermore, each party is protected by the terms of the retainer agreement should a conflict arise.

Guaranteed Payment For Lawyers

One of the main benefits of using a lawyer retainer is that it provides lawyers with a certain amount of guaranteed payment. A retainer is like insurance. Even though it is not intended to cover the entire cost of the services rendered, it does ensure that the lawyer is compensated for some of their time spent working on a case.

What to Consider Before Hiring an Attorney on a Retainer

If having a lawyer on call sounds appealing, stop and think about your legal situation first. Retaining a lawyer might be a smart decision, or it could be a waste of money. Ask yourself these questions before retaining a lawyer.

What Will You Use The Attorney For?

Unless a major accident happens, most people only need an attorney once every few years. If this is true for you, having an attorney on retainer may not be a financially sound decision.

Check Your Insurance Policies

Most insurance policies, including auto and homeowner’s insurance, will pay for an attorney should you be involved in an accident. If this is so, there is no need to pay an attorney as additional insurance against these lawsuits.

Check Your Employee Benefits

If you are an employee of a large company or a member of a union, having a lawyer on call may be part of your benefits. These attorneys can handle most routine legal matters, such as wills and real estate transactions, as well as certain lawsuits. Paying another lawyer on retainer when you already have one through your employer usually does not make financial sense.

Frequently Asked Questions

What’s The Difference Between Earned And Unearned Retainer Fees?

Earned retainer fees specify a certain number of working hours. The earned fee translates to the consultant’s income, or what they expect to receive based on the agreed number of hours. This payment comes after the consultant completes the work and fills in the hours, hence the term “earned.”

An unearned retainer fee is an upfront payment before the consultant completes the work. For this reason, the money is “unearned.” If the consultant finishes the job in less time than they expected, they will repay certain hours’ worth of money or bank the hours for a future project.


Finally, don’t be confused by the terms “retainer” or “retainer agreement.” Generally, these are not the same as having a lawyer “on retainer.” When you “retain” a lawyer, that simply means that you are hiring them, and the money you pay to the attorney is known as “the retainer.” The agreement signed when someone hires an attorney is called the retainer agreement.


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