What is a retainer agreement and what does it do?
If you’ve never hired an attorney before – and, let’s face it, few of us have – you probably have a lot of questions about what to expect and how it all works.
I hired an attorney once for a personal injury case, and, even as an attorney myself, I felt a little bit like a fish out of water. Different practice areas are SO different, and personal injury lawyers and family law lawyers are two entirely different breeds.
So, actually, let me revise my statement: if you’ve never hired a family law attorney before, you probably have a lot of questions about what to expect and how it all works.
Your experience with other lawyers – criminal lawyers, personal injury lawyers, wills, estates and trusts lawyers – are probably fairly dissimilar, and don’t necessarily translate to making you feel at ease with what’s involved in this decision.
And feeling at ease – or, at least, reasonably conversant – in the knowledge that you need to make these decisions is important. It gives you a lot more confidence in your own decision making abilities and, ultimately, in the expertise of the person you hire, if you do it in a confident, informed headspace.
Now, I spend a lot of my time encouraging Virginia women to educate themselves on the divorce process in Virginia. I talk endlessly about our free divorce books and our divorce and custody seminars, and how important it is to educate yourself about the law, your entitlements, and what to expect during the divorce and custody case processes.
But the actual hiring of an attorney is something I discuss less, though I have discussed it before – and, actually, I wrote a book on it! It’s also a place where I get a lot of questions – and a lot of the same questions – over and over again, so I know that people find it confusing or not intuitive.
What is a retainer agreement?
After you schedule and attend your initial consultation, in many cases, the attorney will present you with a retainer agreement. It’s a legal contract – like any other legal contract – that describes, in detail, how the relationship will work.
It tells you how you will be billed, what administrative costs will apply to your file, what rules govern your relationship, and so on.
You should read it, like you do any other legal contract, ask questions if you need to, and understand it before you sign it. You should know, for example, whether your remaining retainer fee is refunded to you if you terminate the relationship early, what the file opening fee is, what and how the attorney bills (including her and her paralegal’s hourly rates), and the division of labor between the attorney and paralegal. (A lot of women tell me they want ME to do the work, rather than my paralegal, which is certainly worth discussing; if you feel that way, I am certainly able to do it, but I usually employ my paralegal to do things in an effort to save my client money.)
A retainer agreement governs your attorney/client relationship, and you are not a client (and the attorney is not YOUR attorney) until it is signed.
A retainer agreement ensures that our malpractice coverage is triggered, too, because we’ve undertaken to represent you as a client. It acts as a protective force for both of us, so it’s really important. It’s also filled with lots of important details.
What’s a retainer?
A retainer is the amount of money needed to hire the attorney and/or firm. The retainer agreement sets forth the retainer amount.
A retainer is an amount of money needed up front. It goes into a trust (or escrow) account with your name on it, and it’s your money until your attorney does work and bills you for it.
When fees are collected (the retainer agreement should explain this, but it varies by firm), the money will be transferred from your trust account into the firm’s account.
We don’t commingle money; it’s yours until we’ve earned it.
What’s a minimum fee security deposit?
Most places have a minimum security deposit. That’s a minimum amount of money that should be in your trust account.
Let’s say you have a $1,000 minimum security deposit. That means, when your account drops to $900, you’ll need to put $1000 in.
That’s designed to make sure that you never run all the way down to zero, and that there’s room in there for the attorney to tackle whatever needs doing. It also means you should get a $1,000 refund at the end of your case – assuming you’ve kept it at that amount!
(Though, sometimes, in my cases, I get a little slack about this at the very, very end – because why pay it to the firm just to turn around and refund it?)
It’s important that you understand what’s happening, so you have a level of comfort with the process and what the law firm asks. If you’re prepared, can ask good questions, and know what you’re doing, you’ll feel a lot better!
For more information, to schedule a consultation, or to request a copy of any of our books, give our office a call at 757-425-5200.