What is a retainer agreement?

A retainer agreement is a legally binding agreement between you and your attorney. Under a retainer agreement, you engage an individual lawyer (or the partners and associates of a law firm) to perform certain services for you and agree to pay for these services. Upon signing the agreement, you are required to pay the retainer, an agreed-upon amount which is prepayment to the lawyer for services to be rendered and expenses to be incurred on your behalf. The Rules of the Court require that a retainer agreement state the following: 

1. Names and addresses of the parties agreeing;

2. Nature of the services to be rendered;

3. Amount of the advance retainer, if any, and what it is intended to cover;

4. Circumstances under which any portion of the advance retainer may be refunded. Should
the attorney withdraw from the case or be discharged before the depletion of the advance retainer, the written retainer agreement shall provide how the attorney’s fees and expenses are to be determined, and the remainder of the advance retainer shall be refunded to the client;

5. The client’s right to cancel the agreement at any time and how the attorney’s fee will be determined and paid should the client discharge the attorney at any time during the course of the representation;

6. How the attorney will be paid through the conclusion of the case after the retainer is depleted; whether the client may be asked to pay another lump sum;

7. Hourly rate of each person whose time may be charged to the client, any out-of-pocket disbursements for which the client will be required to reimburse the attorney, and the incorporation of any changes in such rates or fees into a written agreement constituting an amendment to the original agreement, which the client must sign before it may take effect;

8. Any clause providing for a fee in addition to the agreed-upon rate must be defined in plain language and must set forth the circumstances under which such fee may be incurred and how it will be calculated;

9. Frequency of itemized billing, which shall be at least every 60 days; the client may not be charged for time spent in discussion of the bills received;

10. Client’s right to be provided with copies of correspondence and documents relating to the case and to be kept apprised of the status of the case;

11. Whether and under what circumstances the attorney might seek a security interest from the client, which can be obtained only upon court approval and on notice to the adversary;

12. Under what circumstances the attorney might seek to withdraw from the case for non-payment of fees and the attorney’s right to seek a charging lien from the court;

13. Should a dispute arise concerning the attorney’s fee, the client may seek arbitration, which is binding upon both attorney and client; the attorney shall provide information concerning fee arbitration in the event of such dispute or upon the client’s request. 

No specific text of a retainer agreement is mandated, but it is required that the terms of compensation and the nature of services to be rendered must be outlined in “plain language.” In addition to formalizing the basic attorney/client relationship and providing for the retainer’s payment, the key elements of the retainer agreement should cover the issues outlined below. 

The formula for payment of legal fees should include: 1) the cost per hour for services, including any variation depending on the type of service, for example, consultation, negotiation, and court appearances; 2) the rates at which you will be billed for services provided by partners, associates, paralegal, and other personnel; and 3) other expenses such as court fees, photocopying, telephone charges, travel expenses, fax, scanning, overnight delivery service and the like for which you may be charged. If your understanding that services are to be provided by a specific individual, the retainer agreement should specify this. The retainer agreement should not allow your lawyer to increase the fee-based amount upon the outcome of your case. Further, in matrimonial cases, your attorney is not permitted to charge a fee based on your case (“contingency fees”). 

The retainer agreement should provide that you will be billed at monthly or other specified periodic intervals by the Court Rules (which require that attorneys bill their clients no less frequently than every 60 days) and should state when payment is due. Bills should be itemized to indicate the component services and expenses reflected in the total amount due. Your lawyer’s fee should cover routine overhead expenses and state whether you will be charged an extra fee if your case requires an extraordinary amount of secretarial or clerical support. 

The retainer agreement should provide for the refund of the unused portion of a retainer if you, for any reason, decide to discontinue the services of your lawyer. Take notice of the term “engagement fee,” which may indicate a non-refundable amount. The Rules prohibit non-refundable retainer fees or charge any fee beyond an agreed-upon hourly rate, which is not refundable if the lawyer is discharged before the action’s conclusion. 

Keep in mind that the form of retainer agreement handed to you at an initial consultation is a document written by a lawyer for a lawyer. You can request changes. You have the right to request changes in the retainer agreement to reflect your actual and legitimate expectations for fair treatment and diligent legal services. 

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