Legal Definitions - retainer agreement

A retainer agreement is a formal written contract that establishes the terms and conditions of the professional relationship between a lawyer and their client. It clearly outlines the scope of legal services the lawyer will provide, the fee structure, billing practices, and the responsibilities of both parties. This document ensures mutual understanding and clarity before any legal work begins.

Here are some examples illustrating how a retainer agreement works:

• Example 1: Personal Injury Lawsuit

  Imagine a person, Sarah, is involved in a serious car accident and decides to hire an attorney to represent her in a lawsuit against the at-fault driver. Before the attorney begins investigating the accident, gathering evidence, or negotiating with insurance companies, they will present Sarah with a retainer agreement. This document will detail the attorney's contingency fee (e.g., 33% of any settlement or court award), specify which expenses Sarah will be responsible for (such as court filing fees or expert witness costs), and clearly list the legal services the attorney will provide, from initial consultation to potential trial representation. By signing this agreement, both Sarah and her attorney formalize their professional arrangement and understand their respective obligations.

• Example 2: Business Legal Counsel

  Consider a growing technology startup, "InnovateTech," that needs ongoing legal advice for various matters like intellectual property protection, contract drafting, and employment law. Since they don't have an in-house legal department, they decide to engage a law firm for continuous support. The law firm and InnovateTech would enter into a retainer agreement. This agreement might specify a monthly retainer fee for a certain number of hours of legal work, an hourly rate for any work exceeding that amount, the types of legal issues the firm will handle, and the frequency of billing statements. This document establishes the framework for their long-term professional relationship, ensuring InnovateTech has consistent legal guidance.

• Example 3: Real Estate Transaction

  Suppose David is purchasing a commercial property and needs legal assistance to review complex contracts, conduct due diligence, and navigate zoning regulations. He hires a real estate attorney for this specific transaction. The attorney would provide David with a retainer agreement that clearly outlines the flat fee for handling the property purchase, the specific tasks the attorney will perform (e.g., contract review, negotiation, closing representation), the timeline for completion, and any information David needs to provide. Signing this agreement ensures both parties are aware of the costs involved and the precise scope of legal services to be delivered for this significant real estate project.