How Do Lawyer Retainers Work

When hiring a law firm, discussing legal fees is crucial. You’ll analyze upfront, hourly, or lump sum payments.

But what’s a lawyer retainers?

People often equate it with a retainer agreement.

Actually, you could pay $500 upfront to an attorney for legal advice on a case—that’s the retainer.

Lawyers retainer fee
Retainer fee for lawyers: Photo courtesy (Sapling)

It secures their services. For complex matters needing extended assistance, an additional retainer agreement might be necessary.

What Is a Retainer Lawyer?

A retainer lawyer is on standby for your legal needs.

You provide a deposit, placed in a specific account, and your agreement outlines payment and tasks covered by that retainer.

What Is a Legal Retainer Agreement?

A legal retainer agreement establishes an attorney-client relationship upon payment of the retainer fee.

During this period, contracted lawyers may perform legal tasks or provide answers to general legal queries.

Why is a lawyer’s retainer agreement important?

It serves as your binding contract when retaining a lawyer.

Both parties should carefully review each unique agreement before signing it.

While tailored to the situation, certain common features should be part of it.


Begin with a payment description outlining how the retainer is calculated and the covered services.

You could employ an hourly list based on average hours for your case type.


Detail attorney’s retainer-based work. If prepaid, specify cost coverage once certain fees are reached.

Additional costs

Discuss potential extra charges like court fees, postage, admin fees, and how they’re handled.

Billing frequency and terms

Detail billing schedule and terms. Lump-sum retainers may involve monthly statements with deductions and remaining balance.

Separate bills, monthly or quarterly, might address extra costs, payable upon receipt.


States have fee dispute rules. Arbitration could be required for retainer and billing conflicts, location-dependent.

How Retainers for Lawyers Work?

With a retainer attorney, work progresses as usual.

Under a lump sum, costs are drawn from the sum for project-related work.

A general retainer means regular payments, work varying based on agreement terms.

For instance, with monthly retainer payments to a law firm, funds are deposited and drawn from a trust account as needed.

If $1,000/month for five years accumulates, you could have $60,000 for future case costs.

But specifics depend on your agreement type.

How Much Does it Cost to Have a Lawyer on Retainer?

With a retainer lawyer, work is based on the type of retainer you get:

General retainers

A general retainer fee, often termed a monthly retainer, involves paying for a set time rather than a specific task.

It ensures prompt attorney availability for discussions and queries.

It’s beneficial for businesses facing potential employee issues or legal complications.

Companies with attorneys on retainer can readily access their services for scenarios like workers’ comp or discrimination lawsuits.

Retaining fee

A retaining fee is an upfront lump sum paid to an attorney.

They manage it in a separate trust account, drawing from it as they work on your case.

If it depletes before the project ends, you might need to add more.

Extra money, if any, can be refunded.

It suits businesses or individuals with a single significant project requiring legal help.

Instead of ongoing monthly payments, they deposit a lump sum for the current legal situation.

Special retainer

A special retainer is a flat fee for a single case, but some states ban it as it can tie you to one attorney throughout.

Fees range from $500 to $5,000. The retainer is typically based on an attorney’s hourly rate multiplied by expected case hours.

Should I Have a Lawyer on Retainer?

When it comes to lawyer retainer fees, having a business attorney on retainer is valuable.

They can review contracts, spot issues, and offer guidance, potentially preventing costly litigation.

With a retained attorney, you can address questions and receive legal advice before problems escalate, saving time and money.

What to Consider Before Hiring an Attorney on Retainer

Before retaining an attorney, consider:


Prioritize experience due to retainer fee calculations. Lower fees don’t necessarily mean better.

Evaluate retained attorneys just like any others. Confirm their experience with cases like yours or in your industry.

If it’s for business purposes like reviewing employee contracts, ensure they have relevant business experience.

Legitimate business need

For individuals, check insurance policies. They might cover attorney costs for issues like accidents.

Union members or large company employees might have legal benefits for employer problems. Avoid redundant expenses.


Paying a retainer means hiring an attorney. The money you pay is your retainer for their legal work. When you sign an agreement, it’s a retainer agreement where they commit to work for you in exchange for payment.

Frequently Asked Questions

Are retainers taxable?

Yes, if attorneys use cash basis accounting, received retainers count as taxable income.

What’s a monthly retainer?

It’s a fixed monthly payment to your attorney, irrespective of service usage. It maintains lawyer availability.

What’s a lawyer’s retainer fee?

It varies by attorney but averages between $500 and $5,000.

How to calculate a retainer?

Multiply the hourly rate of attorneys and legal staff by average hours for the case type.