A retainer is the upfront sum of monies you pay to an attorney or law firm for them to do legal work on your behalf. The monies are put into a special trust account called an IOLTA Account and the monies remains in the account until it is earned by the Attorney’s.
There are several different types of retainers that Law Firms or Attorneys are able to use for retaining cases. There are three main types of retainer agreements that are used in which are as follows: Hourly, Flat Fee, and/or Contingency fee. The easiest way to find out what type of retainer you have for the particular service the attorney is providing is for the client to the read the retainer agreement that was signed when you secured the services of the attorney.
In an hourly retainer agreement, the persons working on your case bill their time against your retainer as determined in the agreement you signed. Attorneys provide their services at an hourly rate. As such if the attorney is on the phone with an opposing counsel for 30 minutes and their hourly billing rate is $250.00 you would pay $125.00 for the conversation that took place. Any and all work completed on your case will be deducted from the retainer you have in your IOLTA account.
The bill is generally generated at the end of the month to show the services the that the attorney, like a lawyer Arlington, TX relies on, provided. That specific invoice is then paid for by the monies that is held in the trust account. The invoice that the client received from this is an accounting of the client’s services that were accumulated by working on the client’s case. The client receives an actual invoice until the retainer has been depleted, and at that time the Attorney’s will ask you to pay the bill and replenish your retainer to a certain amount pursuant to your agreement you signed. Generally, the amount requested for replenishment is half of the initial retainer or in some events if you have mediation or a trial approaching; the requested amount could be more.
Flat fee retainers are almost exactly as they sound. A pre-specified amount of monies given that would be needed for the total services rendered. The agreements for this are very specific and as such if the needs become more complexed or needs more time; the client may have to sign a new retainer and it may become an hourly case.
In a contingency retainer, the attorney will not recover their monies unless the client does as well. The most common contingency retainer is for personal injury cases. These cases generally do bill at an hourly rate, however a percentage of monies that is recovered goes towards the Attorneys fees and expenses and the remaining portion is for the client. Upon completing a personal injury case, the law firm will draft a settlement agreement for the clients to approve and finalize the case.
Thanks to our friends and contributors from Brandy Austin Law Firm, PLLC for their insight into legal practice.