Legal Definitions - retainer

A retainer is an initial payment made by a client to a lawyer or law firm. This payment serves several important purposes, all designed to establish the legal relationship and ensure that legal services can be provided effectively.

One common purpose of a retainer is to secure a lawyer's availability. In this scenario, the client pays a fee simply to ensure that a particular lawyer or firm is ready to represent them should a legal issue arise, or to prevent the firm from representing opposing parties. This payment reserves their expertise and time, even before specific legal work begins. Any actual legal services performed later would typically be billed separately.

Another frequent use of a retainer is as an advance deposit for future legal services. Here, the client provides funds that are typically held in a special trust account by the law firm. As the lawyer performs work on the client's behalf (e.g., drafting documents, conducting research, attending court), fees are drawn from this trust account. This ensures that funds are readily available to cover the ongoing costs of legal representation. The client may need to replenish these funds if they are depleted.

Finally, a retainer can also be an upfront payment for a defined scope of work. In this arrangement, the client pays a lump sum at the outset, which covers all or a significant portion of the anticipated legal fees for a specific project or case. Depending on the agreement and state regulations, this payment might go directly to the law firm upon receipt, rather than being held in a trust account.

Regardless of its specific structure, a retainer formalizes the client-attorney relationship and provides a financial foundation for the legal work to commence. The exact terms of a retainer are always detailed in a written agreement between the client and the law firm.

• Example 1 (Securing Availability): A major pharmaceutical company wants to ensure they have immediate access to a specialized intellectual property lawyer who deeply understands their industry. They operate in a highly competitive field where patent disputes and regulatory challenges can emerge suddenly.

  The company pays a monthly retainer fee to a prominent IP law firm. This fee doesn't cover specific legal tasks like drafting a patent application or defending a lawsuit. Instead, it guarantees that the firm's top IP attorney will be available to advise them on short notice, review urgent matters, and won't represent any of their direct competitors. When an actual patent application needs drafting, or a dispute arises, those services are billed additionally. This illustrates a retainer used to reserve a lawyer's expertise and availability.

• Example 2 (Advance Deposit for Future Services): A small business owner is facing a complex contract dispute with a supplier. They anticipate the case will involve several months of negotiation, document review, and potentially mediation.

  The business owner pays a $10,000 retainer to their chosen litigation attorney. This money is placed into a client trust account. As the attorney spends time on the case—researching legal precedents, drafting correspondence, attending meetings—their hourly fees are deducted from this trust account. The attorney sends monthly statements showing the work performed and the remaining balance. If the $10,000 runs low, the client will be asked to replenish the funds to ensure the attorney can continue working without interruption. This demonstrates a retainer as a fund for ongoing legal work.

• Example 3 (Upfront Payment for Defined Scope): A couple wants to finalize their estate plan, which includes drafting wills, trusts, and powers of attorney. The law firm offers a flat fee for a standard estate planning package.

  The couple agrees to the flat fee of $3,500 and pays this amount upfront as a retainer. This payment covers all the work involved in preparing their specific estate planning documents, including initial consultations, drafting, revisions, and final execution. The law firm considers this payment full compensation for the agreed-upon services, and no further hourly billing will occur for this specific project unless the scope significantly changes. This shows a retainer as a lump-sum payment for a defined set of services.