What Happens After I Give my Attorney a Retainer?

We all know that attorneys need retainers. You cannot watch movies and not know that. But what is a retainer and why do attorneys need them?

The term “retainer” is often misused, or, rather, its meaning has changed over time. A retainer used to refer to money paid to an attorney simply to secure the services of the attorney in case they were needed in the future. The attorney may or may not have done any work even though he or she was paid the retainer. But by receiving the retainer, the attorney agreed not to take on any work that could conflict with that of the client paying the retainer. This secured the use of the attorney for the client paying the retainer just in case the client found himself in need of legal services.

In current use, a retainer can also be used to refer to money that is given to an attorney and put in a trust account specifically for the purpose of paying legal fees that will arise in the future. When used this way, a retainer is really advance payment for services that will be rendered. When the attorney provides the promised services to the client, rather than invoicing the client, the attorney need only withdraw the retainer from the trust account. This ensures that the attorney will be paid for the services they have provided because the attorney has possession of the payment prior to providing the services. In this scenario, the retainer amount belongs to the client, even though it is in the attorney’s trust account, until the attorney performs work and takes the retainer out of the trust account and places it into his or her operating account.

Another variation of the term “retainer” is a minimum, non-refundable retainer. The treatment of minimum, non-refundable retainers may vary from state to state, but in Florida this type of retainer is equivalent to advance payment of services. When the minimum, non-refundable retainer is given to an attorney, it immediately is owned by the attorney and does not go into a trust account.

Legal representation can be paid for in many ways, including requiring a minimum, non-refundable retainer when initiating work for a client. Once the amount of work performed equals the value of this initial retainer, the client will be billed for additional work. To accommodate payment for this additional work, the client may be asked to place an additional amount in “retainer” or in “trust.” This payment belongs to the client until work is performed and will be taken out of the trust account by the attorney only after the attorney has completed work for which the client has agreed to pay. Understanding whether you have paid for services in advance or if you have money deposited in your attorney’s trust account can help you better understand your legal costs.

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