What is a retainer in Virginia divorce?

We get a lot of questions about the cost of divorce, pro bono work, attorney’s fees (like, can I make him pay mine?) and so much more. We find that there’s a lot of confusion about how attorney’s charge for their work and what it actually costs.

That’s probably for a lot of reasons. I wrote about this a little bit on Wednesday in an article about how to save money in divorce, but it’s because divorce isn’t like buying an actual thing. I compared it, in my article last week, to shoe shopping. You can see what a pair of shoes costs across different sites, and you can choose where to purchase it. You know what it costs, and it won’t really surprise you with more costs later.

A divorce isn’t really like that. It’s not something that costs a specific number of dollars; there are so many variables involved, it’s impossible to handle a divorce that way. What would you charge, when some cases cost as little as $2,000, and others cost $100,000 or more? I don’t say that to frighten you; the cases that cost $100,000 are the ones you’d expect to cost that – cases with complex business valuations, hotly contested spousal support, custody and visitation issues, or extremely angry/emotional parties who are determined to punish each other through litigation.

It’s hard to estimate costs. It’s hard, too, to compare costs across attorneys to see who the expensive and inexpensive ones are. In my opinion, the best way to tell how expensive an attorney is, compared to other attorneys, is to look at their hourly rate.

An attorney’s hourly rate has a lot to do with her experience and reputation in the community. It tells you, basically, how many hours you’ll get for how much money, and, once you’ve been quoted a retainer, how far that retainer will stretch.

But, what’s a retainer? And doesn’t a retainer reflect total overall costs in a divorce case?

People are often confused about retainers, including what, exactly, they are, and what they do.

When people hire attorneys, they often hire them on retainers. That’s not always the case, but, in family law, it’s pretty much the way things go. Other attorneys (like the personal injury guys you see on TV and on the backs of buses) can work on contingent fees, meaning that they don’t get paid until there’s a settlement. Then, they take somewhere in the neighborhood of 30-50% of the overall recovery. That’s not considered ethical in family law cases – so you won’t see that offered as an option in your attorney’s office, either.
A retainer is an amount of money, taken up front, and placed into an escrow account in a client’s name. It’s the client’s money; it stays the client’s money, until work is done and then the escrow account is used to pay the bill.

It’s like insurance, for the attorney, that the bills will be paid. It’s difficult for attorneys to recover the money after the case is over, if it’s not paid up front. It’s also difficult for attorneys to get out of cases filed with the court, once the case is filed. So, to avoid getting stuck in a case where we’re not getting paid (hey, we have bills too! And student loans – so many student loans), we charge retainers. It’s a widespread practice.

A retainer is not an estimate of what a case might cost; it’s just the amount of money the attorney needs up front in order to take the case on. It is not a flat fee. Once the retainer fees are spent, and the trust account drops down to a certain level (something we call a ‘fee security deposit’ in our office), the office will ask that you replenish your trust account. This goes on and on, until your case is resolved.

Though you should look at the fine print in your retainer agreement, in most cases, it is refundable to you should you find that your case resolves more quickly or easily than you anticipated.

The retainer agreement is different than the retainer. The retainer agreement spells out the terms of the attorney client relationship. Upon signing it and paying the retainer fee, the person becomes a client, and the attorney becomes that client’s dedicated attorney. It creates the attorney client relationship.

It’s important to read and understand the retainer agreement, and exactly what it requires of you – and what it requires of your attorney.

Though a retainer fee can be a barrier to entry, in the sense that if a retainer were set at a million dollars, it wouldn’t matter if the attorney only charged $10 an hour. You would need to have the million to open up the case, so you wouldn’t be able to hire that attorney unless you actually had it. Generally speaking, though, the retainer isn’t the best way to gauge costs from attorney to attorney. In my opinion, again, the best way to do that is by looking at the attorney’s hourly rate. (And, in case you were wondering, you won’t find anyone charging $10 an hour!)

Retainers vary depending on the type and complexity of a case, too. Uncontested retainers are less than contested ones, and there can be a great deal of variation between them. I’ve seen contested divorce retainers for as little as $5,000 and as much as $20,000. It really depends on what’s involved in the case.

A retainer secures your attorney, and it puts money into a trust account to ensure that your attorney will be paid.

For more information, or to schedule a consultation with a licensed and experienced Virginia divorce attorney, give our office a call at 757-425-5200.

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