The issue of how you will pay your lawyer is usually a point of consideration when selecting a lawyer. Often lawyers will present their clients with two potential solutions for how they are to be paid. One solution is to go the hourly route and the other solution is to use a retainer agreement setup. Overall, a retainer agreement option has more benefits in most situations according to most lawyers and clients.
So what is a retainer agreement? A retainer agreement is a fixed amount that a client pays to guarantee that the lawyer will work on your case for a set period of time. Usually this is an estimated amount that is paid monthly. Retainer agreements aren’t just used by lawyers; all kinds of professionals use retainers including freelancers and real estate professionals.
If you have a retainer agreement with your attorney, whenever he or she does something for you, it is billed from the retainer. The money is held in a secure trust fund that the attorney can draw upon for the services rendered. If you don’t use up all the money in your retainer in a given month, the lawyer will roll it over to the next month. However, if you require more work than your retainer agreement covers, you end up getting billed extra.
Hourly rates are usually the most common form of pay with most lawyers. With an hourly rate, obviously, you would keep paying your attorney until the case was settled. However, most lawyers and clients find that the retainer agreement is a better solution for both parties.
The lawyer knows you and your case are confirmed for a certain amount of work each month. Therefore, he cannot take other clients over you. This fact assures a client that he or she will be given high priority with the lawyer. Also clients typically appreciate not being “nickel and dimed” for every little expense that occurs each month.
Usually clients will save a good deal of money using a retainer fee over paying an hourly rate. Clients can also feel free to call the attorney with questions each month under the retainer. Clients can also know ahead of time how much money they will be spending. This can help tremendously with budgeting.
On the other hand, a lawyer knows that you are dedicated to your case and can feel free to go ahead and work on your behalf each month. He also doesn’t have to potentially track down people and get them to pay. This can be rather inconvenient when your attorney should be focusing his or her full attention on your case.
Jeff Harmon is a personal injury lawyer with over ten years of experience who maintains a regular blog discussing the field of law. Harmon has worked in both the San Francisco and San Diego areas and now resides outside of Tempe, Arizona with his three dogs.