How Does an Attorney Retainer Work?

When you pay a lawyer a "retainer" essentially you're paying the attorney in advance so they have a funds to bill hourly against. California Bar Rules of Professional Conduct 4-100 requires that these funds are segregated from the attorney's personal accounts and set up in a trust account. As the attorney works on your case, they bill you and pay themselves with funds from the retainer. A common misconception is that once you've paid a retainer you're done paying for your case. Unfortunately that couldn't be further from the truth.

A retainer is basically an estimate of the dollar amount that the attorney thinks they'll initially use given the knowledge they have about your case. Every time a lawyer reads an Email, picks up the phone, shows up in court or writes a letter on your behalf they're billing against your retainer. If your matter concludes with a balance left in your trust account you will receive a refund on the unused portion of the retainer. If they have used the majority of funds from your retainer and still have work to do, you'll have to make another payment into your retainer trust.

Most attorneys use this method of billing unless they are doing "flat fee" work, (usually matters with a very predictable amount of time & work), or contingency cases, (they get paid a percentage of your recovery). Usually criminal defense, family and business lawyers charge with a retainer due to the unknown amount of time and resources they'll need to dedicate to your case. Often bankruptcy and estate planning attorneys charge a flat fee because most of the work is forms and filing driven, and often personal injury attorneys, (and sometimes business & real estate litigation matters), warrant a contingency fee - no payment if no recovery. No matter what the payment arrangement, every lawyer will require a retainer agreement or some sort of letter of engagement that states you are hiring them.

What if I have no money for a retainer?
Depending on your case and individual circumstances you may not need the immediate retainer. For example: If you're suing someone regarding property, (or maybe going through a divorce and the sale of real estate with equity is eminent), you might negotiate for the attorney to be paid from proceeds of the sale. Also, ask if the attorney will accept a payment plan - many attorneys are willing to take your case if you are willing to make steady monthly payments. You should discuss this with your prospective lawyer as every situation is unique.

We hope this information is useful and encourage you to share your experience in the comments section about a time when you paid a retainer and if there were any surprises.

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