Retainer Agreements, Also Known As Contracts For Legal Service
Most attorneys require a written retainer that meets the standards of a contract. The retainer agreement is a contract and must be clear and definite.
The retainer agreement or contract for legal services describes those services the lawyer will provide as well as how fees are to be paid. Services may be charged to the client on an hourly basis, on a flat fee basis, or on a contingent basis. If the retainer agreement indicates the fee is to be on a contingent basis, then the fee will be a percentage of the monies recovered and that percentage will be included in the contract. Contingency contracts must be in writing to be enforceable. This is an ethical requirement based on the legal canon of ethics that lawyers must follow.
Examples of case types accepted on an hourly fee basis include family law, business transactions such as preparation of contracts, real estate, patents and copyrights, tax issues and buying/selling a business. Hourly rates can be applied to any area of the law, however. Examples of cases typically taken on a contingency basis are auto torts (negligence-auto accidents) and workers’ compensation. Contingency agreements either result in a successful outcome wherein the lawyer is paid the agreed percentage or, in an unsuccessful result wherein the attorney does not receive a legal fee as there was no recovery. Therefore, a lawyer will be selective in those cases that he or she selects on a contingent basis so as to receive a fee for work performed. The fee in an auto tort case is usually 33 1/3 % to 40% of the recovery. The contingency fee in a workers’ compensation claim is determined by the statutes regulating the Workers’ Compensation Commission. Cases dealing with misdemeanor crimes are often handled on a flat fee basis because these cases require one or two appearances in court. For felony cases as well as for cases for defendants facing the loss of a highly compensated salary, more often those cases are handled on an hourly fee basis. I have, however, been retained for some misdemeanor cases on an hourly basis.
Attorney and client may agree on almost any financial arrangement concerning the fee and yet it is wrongful for an attorney to work on a percentage basis (contingency basis) in a family law case where the percentage is based on the amount the spouse receives as a marital award. Also, in some cases, regardless of the fee agreement, the lawyer must petition the court for approval of the fee. Cases falling into this category involve administrative probate before the Orphans’ Court, guardianship proceedings for a minor or disabled person, and, sometimes workers’ compensation cases, to cite a few examples.
Some lawyers include onerous terms in their retainer agreements for clients who do not pay their bill and, if a suit must be brought against the client, then interest as well as reasonable attorney’s fees is included in the contract. Others have provisions including the words “this is a legally binding agreement” and “consult with an attorney before signing it”. Some retainer agreements have described remedies in the event of a dispute arising between the attorney and the client. One remedy might be that alternative dispute resolution must be undergone before a lawsuit is filed by either party.
Lastly, the contract/agreement requires that if the client requests changes or modifications, then the parties need to resolve issues before services are provided.
A well-drafted retainer agreement, also known as a contract for legal services, benefits both the attorney and the client.
Fred Antenberg has prepared many thousands of retainer agreements in his over 30 years’ experience as a lawyer in Howard County and surrounding counties in Maryland. Call Fred today for a free initial consultation.