It’s confusing to hire an attorney. It’s not something you do every day. And what’s involved to hire one is different across different areas of the law – so experience that you might have with, say, a personal injury attorney, or a wills, trusts, and estates attorney – doesn’t necessarily translate to experience like what you might see with a family law attorney.
Even if you have hired a family law attorney before now, if it wasn’t recently, you may also find that things have changed. Or that, from firm to firm, the words are a little bit different.
I can’t speak for all the family law firms in the commonwealth of Virginia, but I can speak for (and explain) ours a little bit.
What’s a retainer and a retainer agreement?
I’ve written before about the retainer agreement, and essentially how it works. Basically, family law attorneys all work on retainers. It’s an amount of money paid up front, and it goes into a trust account in the client’s name. It is not commingled with general firm funds; it’s in its own separate account, and it stays separate unless and until the attorney does work and bills on the account.
Family law attorneys bill hourly, in increments of a tenth (0.1) of an hour. Depending on the experience of the attorney, an hourly rate ranges – in our area, usually somewhere between $150 and $600 an hour. In larger metropolitan areas (like Northern Virginia and Washington D.C.), the hourly rates are correspondingly higher.
If you hire a Virginia family law attorney, you’ll see a reporting periodically that explains what charges were made and how much they cost. Everything, in a sense, costs the same, because it’s all based on how much time it took the attorney to do. Whether it’s responding to an email, taking a phone call, drafting an agreement, or appearing in court, it all costs the same hourly rate.
A retainer is designed to make sure that the attorney gets paid. It’s fairly hard to get your fees back once you do the work, if you don’t have a retainer – so attorneys will try hard not to find themselves in that position. (Just keeping it real – can you pay the bills if you don’t get paid for the work that you do? Neither can we!) The retainer is the main way to ensure payment.
The retainer agreement is a legal contract that governs the relationship. It sets the retainer amount, and it explains how the attorney/client relationship works. There are lots of rules about how long files are kept, when you’ll see billing statements, how email is handled, and more – so it’s an important document (like any legal contract) to both read and understand. And, like any legal contract, if you don’t understand, it is important to ASK!
In summary: the retainer agreement is the legal contract that governs the attorney/client relationship, and the retainer fee (or “retainer”) is the amount of money the client pays to the firm up front in order to take her case.
Attorneys have another tool to help ensure that the trust account can cover the fees needed in the case: the minimum fee security deposit.
Minimum Fee Security Deposit
The minimum fee security deposit is what we call the minimum amount of money that has to be in your trust account at all times.
There’s a lot of confusion about what this is, so I always tend to address it in my consultations – but, of course, it’s a lot of information to keep straight, and some things get lost in translation.
To hire an attorney – or, our attorneys, anyway – you need to pay the retainer amount, not the retainer amount plus the minimum fee security deposit.
So, on the day that you hire your attorney, you’ll have the full retainer amount available in your trust account for billing. When your trust account drops past a certain level, we’ll ask that you replenish your account to the minimum fee security deposit set in the retainer agreement you and your attorney signed.
Let’s use an example. Say that you’re retaining for a separation agreement, and the retainer fee is set at $2,500 with a minimum security deposit of $1000. Once $1600 is spent, your account will drop down to $900 – so, when billing occurs, you’ll be asked to put $100 in the account to bring it back up to the $1000 minimum.
Is what I paid – whether in a retainer fee or in a security deposit – refundable?
Under our retainer agreement, everything is refundable. I can’t speak for all the other firms out there, because there are a lot, but my general impression is that, for the most part, fees are refundable.
So, theoretically, using the above example, when your case was over, you’d be refunded $1,000. (Assuming, of course, that you continually kept the minimum fee security deposit where it needs to be throughout!)
When would the fees NOT be refundable?
The main exception would be in a case where the attorney took a flat fee – say, $1,500 for negotiation of the agreement, not for a retainer for services. It’s entirely different.
In that case, if it’s a flat fee, you’d pay $1,500 no matter what – whether your agreement settled immediately, or whether it took negotiations for 100 years. (The latter case is the reason why we don’t do flat fees; it’s too much risk for us and for our clients!) Flat fees are relatively rare, in any case; mostly, solo practitioners and newbie attorneys offer them. (And don’t ask me for a referral; I literally know of no one off the top of my head, just impressions based off of what I’ve seen over the years.) Most reputable, experienced family law attorneys are working off of retainers.
A retainer agreement can be really confusing, and it’s important that you understand so that there are no unpleasant or confusing surprises later on. No matter what, it’s a challenging experience, so you want to take the time up front to ask questions and get answers that will help you make the best choices you can make.
For more information, or to schedule a consultation with one of our attorneys, give our office a call at 757-425-5200.