What Is a Retainer Fee for an Attorney?

When Do Attorneys Charge Retainer Fees?

Keeping a lawyer on retainer
Keeping a Lawyer on retainer. Musketeer/Getty Images

Retainer fees for attorneys aren't the norm in all cases. Most attorneys arrange payment depending on the types of cases they're handling for clients. It's not unheard of for the same law firm to charge different clients on different fee schedules. Retainers, contingency fees and flat fees are the most common.

Retainer Fees

A retainer fee is a sum paid up front before the attorney will begin working on a case.

The money is placed in an account separate from his operating account, and he bills his time against it as the case progresses. If he charges you $750 to appear in court on your behalf, he'll send you an invoice for this time, typically at the end of the month. He will then effectively pay himself, transferring $750 from his special account into his operating account. Other time is billed against the retainer fee as well, including drafting documents, telephone calls and office visits. 

You may be asked to pay an additional retainer fee when your first is depleted, but experienced attorneys are pretty adept at estimating how much time they'll have to devote to a case so they can charge appropriate retainer fees to cover that time. Of course, unexpected events can occur in any case, throwing the attorney's initial estimate off. 

Cases that involve multiple court appearances and document filings are often charged on a retainer fee basis.

The attorney should give you a written retainer agreement, explaining how he will charge and what will happen if your retainer fee is reduced to zero before the case is completed. 

Be wary of nonrefundable retainer fees. Most state bar associations prohibit attorneys from charging excessive amounts over and above the hours they're likely to invest, keeping any unused balance.

You have a right to terminate representation at any time, and you should not lose your money because you're unhappy with your lawyer's performance -- even if your unhappiness isn't justified. Question the attorney if you see the word "nonrefundable" in his retainer agreement to find out exactly what it implies. If you're not satisfied with his answer, look for another lawyer

Flat Fees 

An attorney might quote a flat fee for jobs that won't require ongoing representation -- the cases are one-time events. A lawyer might charge a flat fee to form and register a corporation for you or to handle a real estate transaction. You may be charged an additional fee if unexpected and unforeseen complications arise. Flat fees are typically nonrefundable. 

Contingency Fees 

Personal injury and tort cases -- those where someone did something wrong and you want to collect money or damages from him -- are often charged on a contingency basis. The attorney does not get paid unless you win your case, and if you do, he takes a percentage of your settlement or court award. Needless to say, this gives the lawyer some significant incentive to fight for you and win. 

Other Fees and Expenses 

Attorneys' fees rarely includes extra, regardless of how they're charged.

Costs like court filing fees and expert fees are typically billed against your retainer fee in addition to the attorney's time. These costs are usually reclaimed in contingency fee cases as well, in addition to the percentage the attorney charges. The lawyer may pay these costs on your behalf, then reimburse himself from your retainer, or he may ask you to write another check when the time comes to pay them.