Before you hire an attorney, make sure you understand how they get paid. Some attorneys charge a flat rate, some get paid on a contingency basis, while others take a retainer and charge by the hour.
Many attorneys work with a legal retainer agreement. This helpful article will break down the legal retainer agreement and show you how it works.
What is a Retainer Agreement?
A lawyer retainer agreement involves a fee that is paid to the lawyer before services have been provided. This type of arrangement is common among many types of attorneys from a defense attorney to a business litigation attorney and is often called a “work for hire” contract.
Think of the retainer agreement as a down payment for the attorney’s services. The legal retainer fee agreement will include the type of work the attorney is doing for the client, the rights of both parties entering into the agreement, and any additional fees.
The retainer fee gives the attorney an allowance to draw from as your case proceeds. Expenses such as reports and printing can add up quickly.
Retainer fees are almost always required in cases involving a trial or lawsuit. The amount of the retainer fee varies depending on the type of case and your lawyer.
Be sure to read the retainer agreement for legal services or work for hire document fully to understand exactly how much you are being charged and how your retainer fee can be used.
Types of Retainer Fees
Your retainer is paid in advance. Your attorney can use one of three types of retainers: general retainers, a retaining fee, or a special retainer. Be sure to know which type of retainer your attorney uses.
A special retainer s a flat fee for a case or specific project. Some states outlaw this type of legal retainer agreement because you can’t leave the attorney until after the services are completed. Check your state laws to see if this type of retainer is allowed were you live.
All additional fees are often due upon receipt of the bill. If you have a dispute will the bill bring it up to your attorney. All states govern fee disputes differently. A lot states do not allow arbitration of these disputes but some states like to allow.
Benefits of a Retainer
Many benefits come with the legal retainer agreement to both clients and attorneys. A client may choose to pay a retainer to demonstrate they are serious about retaining the attorney’s services.
Retainers also help establish harmonious relationships between clients and attorneys. If the client can trust the attorney with their funds, itis usually a good base for a working relationship.
When an attorney uses a retainer the client is in control of how much the attorney spends and ensures that the firm is paid for the work that is done. When the retainer trust account gets low the client can then refill it and continue the service or choose to end the services.
The retainer fee is always placed in a separate trust account. It is not mixed in with the lawyer’s personal funds. This ensures the money isn’t used for anything outside of the client’s purposes.
Furthermore, all expenses and hours worked by the attorney are given in descriptions to the clients so they can see exactly how the retainer funds are being used.
Final Thoughts on Legal Retainer Agreement and Attorney Fees
A legal retainer agreement is one of the most common ways attorneys get paid. It can sound sketchy when a lawyer asks for money upfront before they have done any work, but it is actually quite common.
There are many benefits to the client that come from a legal retainer agreement as well. Use this article as a reference to understand your attorney’s legal retainer fee.
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