How a retainer works

Clients often get confused on how retainers work and why they are needed.
There are pretty much three basic ways that attorneys charge for cases. The simplest method is a flat fee. It’s a single amount that an attorney agrees to charge no matter what happens. Flat fees are used in uncontested matters, document preparation like drafting deeds or wills and sometimes flat fees are used for criminal defense. Flat fees are good to use when you pretty much know the outcome of the case and you know how much work it will require.

The next method is a contingency fee. This what you often see in personal injury cases. The way it works is you agree to give your attorney a portion of any settlement or award given to you. Depending on the amount of work and what stage of litigation, the attorney will charge anywhere from 25% to 50% of your settlement. The most common amount is usually a third 33%. This is where you see attorneys advertising the “You pay us nothing unless we win your case.”

The third method is billing by the hour. This where the retainer is used. After you consult with an attorney they will have a general idea of the complexity level and how much work is needed in your case. There are also expenses like court filing fees that the retainer will need to cover. The attorney will do a rough computation and quote you a retainer. The retainer is then used as a gas tank that the attorney starts to bill out of it and use up. See blog on how attorney billing works.

It’s extremely difficult to predict the exact amount of work that is required in a contested case. Imagine trying to predict the exact score of any contested sports match and the end result. There are so many variables involved and there is no guarantee of how long it will take either, but no matter what you want to be prepared, have a game plan, and have the resources needed to be successful.

The retainer is used not as a total bill of what your case is going to cost. It is used by attorneys to ensure that there are funds to cover the initial expenses and cover enough work to reach a good stopping point which is hopefully a final resolution. A retainer is also a commitment by the client that they agree in order to have an attorney work on their case they understand that there is work involved and expenses. Depending on the cost and work involved some attorneys will offer payment plans for the retainer.