A retainer fee contract, often called a retainer fee agreement, is a legal arrangement between clients and their attorneys. This contract outlines the terms and conditions under which the attorney will provide legal services in exchange for a fee.
The retainer fee is often an advance payment against which future costs are deducted as the lawyer works on the client’s case. The primary purpose of such an agreement is to ensure that the attorney is compensated for their services and to clarify the financial expectations for both parties.
What Are Some Different Types of Retainer Agreements?
There are several types of retainer agreements, and the specifics can vary based on the nature of the legal work and the preferences of the involved parties:
General Retainer
This is essentially a retainer for availability. It’s akin to putting a lawyer “on retainer” to ensure their time and experience are available over a specified period, even if you don’t need any specific legal services.
Example: A corporation might pay an attorney a general retainer to ensure the attorney is always available for consultation and representation during the year. This can be vital for businesses requiring legal advice but not necessarily ongoing, specific tasks.
When Used: You want to guarantee access to a lawyer’s services without necessarily engaging them for a specific ongoing task.
Special or Specific Retainer
This type of retainer is task-specific. The client and attorney agree on the nature and scope of a particular service or set of services, and the client pays a retainer specifically for that purpose.
Example: A client might pay a specific retainer for an attorney to handle a real estate transaction, draft a will, or represent them in a lawsuit.
When Used: When you have a specific legal need or issue and want to hire a lawyer to handle that particular matter.
Evergreen Retainer
An evergreen retainer is a dynamic arrangement where the client keeps refilling or “topping up” the retainer amount when it falls below a certain level. It ensures that the attorney always has a certain amount of funds to cover their services and associated expenses.
Example: An ongoing business might have an evergreen retainer with their attorney. As the retainer lawyer provides services and draws from the retainer, once the amount dips below $2,000, the business replenishes it back to the agreed-upon amount, like $5,000.
When Used: Ongoing legal relationships where the client wants to ensure uninterrupted legal services without having to renegotiate or reestablish payment terms repeatedly.
Contingency Fee Arrangement
Here, the attorney’s compensation is based on the case’s outcome. If the client wins or receives a settlement, the attorney gets a predetermined percentage of the amount recovered. If the client loses, the attorney receives nothing (or no fee for their time, though the client might still be responsible for certain out-of-pocket costs).
Example: Personal injury lawsuits are often handled on a contingency fee basis. If an injured person sues a negligent party and receives a $100,000 settlement, and the agreed contingency fee is 30%, the lawyer would receive $30,000.
When Used: Often used in personal injury cases, some class actions, and other legal matters where the client might not have the funds to pay upfront, and the case has a reasonable chance of a significant recovery. It allows clients to pursue justice without immediate financial burdens while attorneys take on the risk, banking on potential future rewards.
What If I Have a Legal Dispute over a Retainer Fee Contract?
Retainer disputes arise when there’s a disagreement between the client and the attorney regarding the payment or services rendered under the retainer fee agreement.
If you believe your attorney has not provided the services as agreed or overcharged you, several steps must be taken.
Direct Communication
Before taking any formal action, clients should generally speak directly with their attorney to address any concerns or misunderstandings. Clear communication can often prevent further disputes.
Example: Imagine a client who receives a billing statement that seems higher than expected. Instead of immediately assuming wrongdoing, the client could contact the attorney to discuss the bill. It’s possible there was a clerical error, or perhaps the client wasn’t aware of certain additional tasks the attorney undertook.
Mediation
Mediation involves a neutral third party, a mediator, who helps the disputing parties find common ground and reach a mutually agreeable solution. The mediator doesn’t make decisions but facilitates communication to help the parties resolve their issues.
Example: Suppose a client feels that the attorney didn’t properly represent them in a case, leading to an unfavorable outcome. Conversely, the attorney feels that they provided competent representation and that the outcome was due to factors outside of their control. A mediator could help both parties understand each other’s perspectives and come to an agreement, such as a reduced fee or some other resolution.
Arbitration or Litigation
Arbitration is a formal process where a neutral third party (arbitrator) hears the arguments of both sides and then makes a binding decision. It’s similar to court but is usually faster and more private. Litigation involves taking the dispute to court, where a judge (or jury) will decide.
Example: Consider a situation where a client believes the attorney overcharged them by thousands of dollars. They might take the dispute to arbitration or court for an official ruling if mediation fails.
Ethical Violation
A code of professional conduct binds attorneys. If an attorney violates these ethical guidelines, clients can report them to their state’s bar association. The association can investigate and, if necessary, impose sanctions on the lawyer, ranging from a reprimand to disbarment.
Example: Suppose an attorney takes a client’s retainer fee but becomes unresponsive, failing to work on the client’s case and refusing to refund the retainer. The client could view this as an ethical violation—specifically, misappropriation of funds—and report the attorney to the state bar. After investigation, the bar might discipline the attorney, and the client might also pursue other avenues for getting their money back.
Each step represents an escalation in the formality and potential consequences of the dispute process. It’s generally advisable for clients to try the less adversarial routes first (like direct communication and mediation) before moving to more formal methods.
Should I Hire a Lawyer to Help with Retainer Fee Contracts?
Absolutely. If you’re entering into a retainer agreement or facing a dispute related to one, it’s advisable to consult with a professional. A contract lawyer can guide drafting, understanding, or disputing retainer agreements, ensuring your rights and interests are protected.
If you need assistance, LegalMatch can connect you with a qualified contract lawyer who can help you navigate the complexities of retainer fee contracts and any associated disputes. Don’t wait any longer to get the legal help you need. Use LegalMatch today and find a lawyer near you. There is no upfront cost. You have nothing to lose and everything to gain.
