After Attorney Ann agreed to represent ABC Corporation for a period of one year, the corporation paid her a general retainer in exchange for Ann’s promise to be available for representation on any legal matters relating to ABC Corp. at any time during the year.
retainer
Definition
A fee that the client pays upfront to an attorney before the attorney has begun work for the client.
There are three types of retainers, each with a different purpose:
(1) A general retainer, which is a fee for a specific period of time rather than for a specific project. While no specific representation is contemplated, the client pays for the attorney’s availability during the time specified.
(2) Also termed a retaining fee, a deposit or lump sum fee which the client pays in advance. The attorney must place that up-front fee in a trust account. As the lawyer performs work, he or she withdraws money from that trust account as payment for the work done. Any amount that is left over after legal representation has concluded must be refunded to the client.
(3) A special retainer, which is a flat fee that the client pays for a specific case or project. Many states prohibit this form of retainer because it may prevent the client from discharging the attorney at any time during the representation.
Definition from Nolo’s Plain-English Law Dictionary
A fee paid in advance to a lawyer to secure the lawyer's services. It acts as a down payment, ensuring that the lawyer won't get stiffed and that the client will be represented. If the amount is significant, some states require the lawyer and client to sign an agreement.
Definition provided by Nolo’s Plain-English Law Dictionary.
August 19, 2010, 5:23 pm
“We have previously held that it is unethical for a lawyer to enter into a fee contract providing for a nonrefundable advance fee unless the advance fee constitutes a general retainer. See Iowa Supreme Ct. Bd. of Prof’l Ethics & Conduct v. Apland, 577 N.W.2d 50, 58 (Iowa 1998). Thus, contracts providing for nonrefundable ‘flat’ fees are void as well as unethical. Id.; see Iowa Code of Prof’l Responsibility DR 2-106(A). All advance fee payments other than general retainer fees are refundable, despite contractual language to the contrary, and must be placed in a client trust account. Apland, 577 N.W.2d at 55-56. Furthermore, these fees may not be withdrawn until earned. See id. at 56. A lawyer misappropriates client funds in violation of DR 1-102(A)(3), (4), (5), and (6) when special retainers and flat fees paid in advance are treated as money belonging to the lawyer and not maintained in a trust account until the fee has been earned. See id. at 55-56.” J. Cady, Iowa Supreme Court Board of Professional Ethics and Conduct v. Frerichs, 671 N.W.2d 470, 475 (Iowa, 2003).
