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27 October 2023

How does a Retainer for Lawyer work?

JS
JB Solicitors

Contributor

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A lawyer retainer is a contract where the client pays a lawyer upfront to fulfill specific requirements in exchange.
Australia Law Practice Management

This article will discuss how a retainer for lawyer works and what is a retainer agreement.

The law is a complex and ever-changing maze, and navigating it without the help of a lawyer can be daunting. In Australia, where the legal system is based on both common law and statute law, it is especially important to have a lawyer on your side to guide you through the process.

That's why having a retainer for lawyer is important. Retainer fees are an upfront payment given by a client in order to secure ongoing services from a service provider. In this article, we will use a lawyer retainer fee as an example.

What Is a Retainer Agreement?

A retainer is the cornerstone of your lawyer-client relationship. A retainer is a contract in which the client pays the attorney and the attorney pledges to fulfill specific requirements in exchange. Retainer agreements offer several benefits to both the service provider and the client. Here are some important key points about retainer agreements:

  • The main provisions of a retainer for lawyer agreement do not need to be in writing, but having them in writing is in the best interests of both you and the lawyer. An agreement regarding costs may include this.
  • In a retainer for lawyer agreement, the lawyer will use the relevant information for your best interests. This provision can be set out at the beginning of your contractual relationship.
  • Although there are restrictions for attorneys, you can cancel the retainer for lawyer at any moment. In most cases, clients hire lawyers to represent them in a case until it is resolved, and they agree to pay for those specific legal services either on an ongoing basis or at the conclusion of the case.
  • You will be required to pay for the work done up to that point if you cancel the retainer for lawyer agreement before it is finished, even if the lawyer has agreed to act on a no-win, no-fee basis.
  • Your documents or other personal property may be held by the attorney until the expenses are paid. A lien designates this "lawyer's right" to keep your property until fees are paid.
  • Unless there is good cause, a lawyer who cancels a retainer before the work is finished must often return your documents and forfeit any right to reimbursement for the work done.

What Constitutes "Good Cause"?

Good causes include the following:

  • if you failed to give funds to cover costs that the attorney had to incur on your behalf;
  • if you ask the attorney to carry out an unlawful or dishonourable act;
  • if you've shown a significant loss of faith in the attorney;
  • if you fail to provide the attorney clear instructions; or
  • if you reject and disregard the legal counsel's recommendations.

Having a retainer for lawyer is advantageous. For the client, it gives a clear understanding of what services the lawyer will provide, how much it will cost, and how the payment is to be made. For the lawyer, it defines the scope of their work and ensures they will be compensated for their services.

Costs and Charges Provisions

Before starting the job, lawyers must give their clients written notice of their fee structure. They must provide an estimate and the methodology used to determine costs. There is an exemption to these rules if the total legal fees (excluding charges and disbursements) are unlikely to exceed $750. If you think you were overcharged, there are also ways to have a bill assessed.

The costs can be calculated in the following manners:

  • lump sum or fixed rate fee (common for Wills or conveyancing)
  • item-by-item charges for specific tasks
  • hourly or daily rate, including phone calls, meetings with the client or court appearances. This rate may depend on the level of experience of the lawyer.

Take note that, in order to cover fees and expenditures, lawyers occasionally request an advance fee or advance payment retainer fee. This money must be kept in a trust account until the job is finished and the client receives an accurate bill of charges.

However, if the client agrees, the expenses agreement between a solicitor and client may provide payment of disbursements or periodic payments on account of costs. As an alternative, some attorneys would agree on the appropriate method of payment with their client.

What Are Legal Costs?

The term "legal costs" consists of two types:

  1. Solicitor/client costs. These costs are the fees that you and the attorney have agreed to pay for the attorney's services, as well as any expenses the attorney has incurred in performing the services.
  2. Party/party costs. These are the costs that arise as the result of a court ordering one side in a dispute to pay the costs of the other side.

The Legal Professional Uniform Law (NSW) 2014 provides that solicitors must present a quote or a costs or fees disclosure to inform their clients of the estimated costs of their services. A solicitor must provide you with a cost estimate and a basis for the calculation of such costs.

If both parties have agreed on the costs, they can make a cost agreement in writing which will specify how much the lawyer will charge for his or her services. However, such an agreement is only optional.

Benefits of Retainers for Lawyers

Retainer for lawyer agreements offer several benefits to lawyers in Australia, including:

  • Retainer agreements provide lawyers with a steady income stream. The fee paid upfront ensures that the lawyer has a predictable revenue stream, which can help cover expenses and support their legal practice.
  • Clients who sign retainer agreements often receive priority service. Clients can then build stronger and better relationship retainer agreements with their lawyers.
  • Retainer agreements can help protect lawyers from non-payment and ensure that they are compensated for their services. The agreement defines the scope of their work and ensures they will be compensated for their services.

JB Solicitors Is Here to Help

If you are facing a legal matter, it is important to seek legal advice. Managing a business is tough and complex, therefore our law firm is here to help. We have experienced and compassionate lawyers at JB Solicitors who are here to help you through this difficult time. Knowing that you have a lawyer on your side can give you peace of mind.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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