Advice about Legal Retainer Fees
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Advice about Legal Retainer Fees
Dec 2002
What is meant by a retainer? I anticipated legal trouble and
consulted a lawyer. At his request, I paid him a $1,500
''retainer '' up front. However, the legal problems never
materialized. (Despite having mistreated others, my potential
adversary dealt honorably with me.) Thus, my lawyer spent at
most 2 hours hearing my concerns over the phone and reading a
couple of e-mails. Is it incumbent upon my lawyer to refund me
part of the $1,500, because, at his usual hourly rate, he could
not possibly have earned $1,500? Or is a retainer a sort of
fixed cost that one owes a lawyer for agreeing to take on a case,
regardless of whether or not substantial services were rendered?
anon
Check the paperwork that you signed when you retained the
lawyer. Many lawyers will refund the balance of a retainer that
was not earned. You can contact the State Bar of California
Complaints Against Attorneys
1-800-843-9053
for advice about getting your money back and/or registering a
complaint if necessary. I've pasted the language in the Code of
Professional Conduct, which governs attorney conduct. Good luck.
A member whose employment has terminated shall:
(1) Subject to any protective order or non-disclosure agreement,
promptly release to the client, at the request of the client,
all the client papers and property. ''Client papers and property''
includes correspondence, pleadings, deposition transcripts,
exhibits, physical evidence, expert's reports, and other items
reasonably necessary to the client's representation, whether the
client has paid for them or not; and
(2) Promptly refund any part of a fee paid in advance that has
not been earned. This provision is not applicable to a true
retainer fee which is paid solely for the purpose of ensuring
the availability of the member for the matter.
Discussion:
Paragraph (D) also requires that the member ''promptly'' return
unearned fees paid in advance. If a client disputes the amount
to be returned, the member shall comply with rule 4-100(A)(2).
anon
A retainer is basically a deposit for services rendered.
However, the attorney would still bill you for all services. I
recently ended my relationshiop with an attorney and simply sent
a letter terminating service and asked for the retainer to be
returned which it was.
anon
I am not a lawyer, but have used lawyers requiring retainers in
the past. I believe they are required to account for them
separately, and that amount was not just a flat fee for his
services. Rather, the lawyer should present you with a bill
for actual services rendered and the bill should be applied
against the retainer with you receving a refund for the
difference. You should write a letter requesting an itemized
bill and the refund of your remaining retainer if you no longer
intend to use his services. He has no incentive to give you
your money back unless you ask for it!
Claire
The lawyer should refund that portion of the retainer that was
not used, and should provide you with a bill for services
rendered, so you can see just what was done for you and how long
it took. A retainer is just an advance payment, not a freebie.
Wendy Woolpert
The term ''retainer'' can refer either to a flat fee (that is,
$1,500 for the job, no matter how much or little time it takes)
or a ''refundable retainer'' -- a sort of deposit that the lawyer
holds, deducting his hourly fees and expenses as he goes along,
and returning the unused balance at the end of the case. You
should have a written agreement with your lawyer that specifies
which sort of retainer it is (lawyers are required to have
written agreements of that sort with their clients).
That said, the most common retainer arrangement in the
situation you described is a ''flat fee'' -- you paid the lawyer
$1,500 to take care of the problem. That represents a sort of
gamble for both you and him. If he had put in a lot of time on
it, you would not have taken kindly to him asking for more
money -- you had already paid his fee. On the other hand
(which is where you seem to be), he may not feel any obligation
to refund some of his fee just because your problem went away
so easily. The theory is that, if he gets a little windfall in
some cases, it makes up for the bath he has to take in
others ....
Even so, some lawyers would feel queasy about keeping that much
money for so little work. You might just want to have a
relaxed, friendly conversation with him about it, and see what
happens. Good luck.
may
A retainer can mean almost anything, but if it wasn't agreed
upon, your lawyer should return anything you paid over and above
the two hours s/he worked.
anon
The money you provided to the attorney must remain in a trust
account until it is ''spent'' on hours worked. He must send you a
bill detailing his time and if there is no further work to be
done he should give you back any remaining money. The trust
account is basically money being held in your name and it
belongs to you until the lawyer does work to earn it. After
accruing hours, and informing you via an itemized bill, he can
transfer the appropriate amount of money to his business account.
Debbie
Most often, the unused portion of your retainer would be
refunded to you by the lawyer without question, within about 30
days after you notified him you did not plan to proceed.
(Standard procedure in my firm and, so far as I know, anywhere
else.) However, check your fee agreement. (If you didn't sign
one, your lawyer is guilty of an ethical violation regardless of
what happens with the money.) It's possible that the lawyer
claims that retainer as a sort of minimum fee. However, I find
it hard to imagine any lawyer insisting upon this when
challenged, so it's worth pursuing a refund (less a reasonable
charge for the time he actually spent on you plus any expenses
for things like photocopying your file).
Holly
The term ''retainer'' has different meanings to different
people.
Most people use the term ''retainer'' to mean prepayment of
attorney fees. When the services are over, the attorney then
owes the client the ''unearned'' fees.
A ''true retainer'' is money paid to reserve the attorney's
services in the future. No service is rendered for the money.
It's like a signing bonus. California tends to construe the
term strictly against the attorney. Any indication from the
attorney that the ''retainer,'' or any part of it, was used for
fees, renders it a prepayment of attorney fees.
If there is no written contract, and the amount is over $1,000,
then any alleged agreement can be declared void by the client.
At that point, the attorney is entitled to reasonable value of
actual services rendered.
The client should ask the attorney for an accounting and
request a refund of the unearned fees. If there is any
problem, the request should be put in writing.
Juliette
I am an attorney and I take this issue pretty seriously. Your
answer lies in the attorney-client contract which you signed
when you retained the attorney. It is also called a Retainer
Agreement. If you did not sign one, that is a violation of the
Rules of Professional Responsibility which are governed by the
State Bar. Any agreement for services exceeding $1,000 must be
in writing.
Normally, most retainers are refundable. The lawyer is to take
from the retainer non-disputed hourly charges and out of pocket
costs (photocopies, parking, filing fees, and even his own
secretary - which bothers me to no end but it should be
disclosed in the agreement. And if you signed it, you are
assumed to have read it.) So, you give me $1,500 and I do two
hours of work at $200 per hour, my paralegal ''opens'' your file,
some copies and postage. $457. You are owed 1500 minus 457.
If you ask for a bill, the State Bar requires that your lawyer
produce one within 10 days of your request.
Check your agreement to see if there was a nonrefundable clause.
As draconian as it may sound, sometimes we pass up major cases
because we already have too much on the plate or have a conflict
on the date of YOUR hearing. You resolve things, we are out you
and the other guy. So, that is the reasoning.
You need to 1) put in writing your concerns to your attorney 2)
if his/her answer is not acceptable, contact your local Bar
Association (Alameda County Bar Association fr example) and
request the Fee Arbitration Panel. You will be assigned
volunteer attorneys to mediate the dispute and review the
records and the lawyers will make the call. It keeps us
legitimate.
Good luck. Please know that we are not all snakes.
H.E.S.
When you pay a lawyer a retainer, it is generally considered to
be an advance payment for the time your attorney actually
expends on your matter (assuming the lawyer is intending to be
paid on an hourly basis, rather than on contingency). Thus, if
the lawyer only worked on your matter a couple hours, he or she
should deduct her usual hourly rate from retainer, and return
the balance to you. If you paid a retainer, you definitely
should have been asked to sign an engagement agreement (also
called a retainer agreement, or other similar term). That
agreement should state the terms of your contract with the
lawyer, including what your respective obligations are with
respect to the retainer. I suppose some attorneys might put in
their retainer agreement that the retainer is non-refundable,
although I would think that would be unusual and possibly
unethical, depending on the circumstances. If the lawyer did not
have you sign a retainer agreement, I would say he/she breached
her ethical obligations (although how big of a breach would be a
matter of debate). While attorneys certainly occasionally do
brief projects for clients without the formality of a retainer
agreement, if a retainer is asked for and paid, there should
certainly be a retainer agreement. (P.S. I am an attorney, but
I do not work on a hourly basis (contingency only), and
therefore my office does not collect retainer fees. I offer my
comments based on my recollection as to the rules of
professional conduct and generally accepted practice.)
Kim
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