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How Is My Retainer Spent?

How is My Retainer Spent?

Parties to a Family Court case often have never hired an attorney before.  They may never have stepped foot in court before.  For this reason, during my initial consultation with Family Law litigants I find myself having to explain what a retainer is, and is not.  I hope this blog post will clarify things for readers.

Attorneys can be hired in a variety of different ways.  Usually, the way you hire your attorney will depend on what genre of law he or she practices.  For example, if you are hiring a personal injury attorney, you may pay a “contingency fee,” which means if that attorney is successful on your behalf – gets you a lot of money – you pay a percentage of that financial reward back to your attorney.  This is elegant in that you need not pay anything up front, or if you lose.

If you hire a criminal attorney, you may pay a “flat fee.”  You pay the criminal attorney a lot of money, up-front, once.

Almost always, when hiring a family law attorney to handle your divorce, child custody, child support, child relocation, adoption, child services, or domestic violence case, you will have to pay a retainer.

A retainer is a sum of money the client pays up-front to his or her lawyer.  It is NOT a down payment.  It does not necessarily mean you are finished ever having to pay your lawyer again.  Here is how it works:

A retainer remains your money (the client’s money) and is even kept in a separate bank account, called an IOLTA or (Interest on Lawyer Trust Account).  You pay the retainer to your lawyer, he or she deposits all of it into the IOLTA account, and there your money remains unless and until your lawyer works on your case.  Say, to use easy numbers, you pay your divorce attorney a retainer of $2,000.00.  The attorney is now hired.  An attorney-client relationship has been forged.  Attorney deposits the $2,000.00 into his or her IOLTA account and bills against the retainer for all the work he or she does.  If your lawyer charges $200.00 per hour when she works on your case and she does an hour of work on your divorce researching assets then after that work, $200.00 of your (client’s) money becomes your lawyer’s money.  Magic.

Now, if your case finishes and there is money left in the retainer, no matter what amount, that money is sent back to you.  It is your money as the law office never earned it.  However, if your lawyer uses the entire retainer and still works on the case, then the work your lawyer does after the retainer runs out will be sent as a bill.  If the retainer dried up and on March 1st, 2020 the lawyer spends an hour in court arguing your case, then the lawyer will send you a bill reflecting one hour of work ($200.00 in our example) that the retainer could no longer cover.

Some attorneys insist on “evergreen” retainers.  If you have an evergreen retainer agreement with your attorney, then when your retainer is emptied you must replenish it, sometimes even in full, before the lawyer continues work on your case.  In the above example, this would mean that Attorney would notify Client of the fact that the retainer was empty before the court appearance, and Client would have to put some amount of money back into the retainer.

Per the R.I. Bar Association, all IOLTA accounts divert any interest that accumulates over to help with pro-bono (free) cases and other worthy matters that require funds.  How this interest is used will vary by jurisdiction.

If you have any questions about this process, and what your initial payment should or should not cover, be sure to ask your attorney before paying it or signing a fee agreement.

Many current billing software programs allow the client real-time access to everything his or her hired law office is doing and has done on their case, including an itemized listing of all work performed and how each task was billed.

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