Divorce Finance: What is a Retainer Fee?
What is a retainer fee and how does it work? Essentially, a retainer fee is, and works like, a down payment for legal services and expenses. It is required to engage the services of a family law attorney. The fee will be put into an account earmarked for you, the client – and serves as security for fees earned.
Some attorneys draw funds from the retainer account as services are rendered. Others apply the retainer only to the final bill – the clients pay their monthly bills in full. In that situation, the initial retainer, or what is left of the retainer, is returned to the client on completion of their legal matter.
The retainer fee serves two purposes. Obviously, it ensures that you are serious about pursuing a matter and that the attorney will get paid for the work done – most reputable law firms will require one upfront. But the retainer fee also protects the client. Once you submit a retainer, it ensures that the lawyer won’t take on other clients pursuing interests that are adversarial to yours.
When seeking a divorce for example, the retainer ensures your family law attorney only represents you, not you and your ex or your ex’s family, etc. If the attorney is serving as a mediator, the retainer ensures that the mediator can never represent either party, against the other party.
The retainer does not represent the total amount of fees a divorce will cost – it is merely a starting point. Clients are expected to pay all fees and costs for work done on their case.
Divorce Tip: the more reasonable you and your spouse can be in resolving matters to mutual benefit, the more likely it is that the retainer will cover your divorce costs from initial filing to resolution.
Remember Ben Franklin’s maxim: Time is money. The faster a case is resolved, the less you spend on attorneys’ fees.
It is important that you select an attorney you trust, and who will not churn a case (drag it on). Please read my last blog, How Do I Find a Divorce Lawyer for more information.
What is a Fee Agreement?
In California, non-contingent matters (personal injury lawyers tend to work for contingency fees for example, most other legal matters, including divorce, are non-contingent) require an executed Fee Agreement between the client and the attorney, for any case that will foreseeably exceed $1,000 in costs.
The fee agreement will include a description of the legal services provided, responsibilities of both the attorney and the client, and the costs that will be charged to the client, such as:
- Hourly rates
- Court Costs
- Service Fees
- Other rates, fees and charges
It is important that you understand your fee agreement so there are no surprises in your bill.