Attorneys have a variety of fee arrangements. It is important for clients to understand these different arrangements. This will help them choose the right arrangement for their needs and avoid surprises later on.
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Retainer fees
Often, lawyers charge a retainer fee to establish a financial commitment between themselves and their client. This type of fee structure allows attorneys to prioritize their clients’ cases and legal needs, which can result in better legal services. This also helps to foster a strong attorney-client relationship. In addition, this type of fee arrangement can help clients manage their legal expenses and budgets.
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The retainer fee can be a flat fee or an hourly fee, and it can be applied to both lump-sum and contingency cases. The lawyer must be clear about the terms of the retainer and how it will apply to each case, including any extra costs. This will help the client feel confident in their lawyer’s ability to provide quality representation.
When a lawyer charges a retainer fee, they must not commingle client funds with their own office accounts unless it is necessary to pay bank service charges. The ABA states that “an attorney must not place money in their own personal account and then transfer it to their office account only as it is earned.” Retainer fees are a form of deposit against future services, but they should always be returned to the client when legal representation has ended.
A common misconception about retainer fees is that the attorney is guaranteed to be available for your legal problems whenever you need them. While this is true to an extent, it’s important to understand how the retainer system works so you can make informed decisions about your legal needs and the amount of time you want to spend with your attorney.
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There are many different types of retainer fees, from a classic general retainer to a recurring monthly retainer for ongoing relationships. Some of these retainers may be nonrefundable, but most are refundable, so you should be sure to read your attorney’s retainer agreement carefully.