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Creating The Perfect Retainer Agreement - iStock_000018521162-c.jpg

Creating the perfect retainer agreement

The importance of always using a written retainer agreement with prospective clients cannot be stressed enough. In fact, creating and maintaining a thoughtfully-prepared retainer agreement is an absolute necessity for any lawyer. If you are new to solo practice then writing your retainer agreement should be one of your first projects. Failing to use one only invites the possibility of disputes between you and your clients. Meanwhile, a well-drafted retainer agreement serves to protect both the attorney and their client from any possible disagreements down the road regarding the scope of work and the attorney’s fees. At minimum, the retainer agreement should spell out in specificity the proposed work the lawyer will perform; any specific work that is recommended but not included in the agreement; and the client’s obligations including the fee charged for the proposed work. The agreement should also include other issues relevant to the attorney-client relationship. Finally, you should check your state’s rules of ethics to make sure your retainer agreement complies with all relevant rules.

The scope of work

The retainer agreement should begin by detailing the scope of work as discussed between the parties. The agreement should be thoughtfully-worded and reasonably specific, but should be in plain English so that both parties understand what is being agreed to.

Following the initial consultation with your client, you should have a sense of the work that is being requested. Outline the scope of your representation in writing, including as many details as possible to avoid any confusion. Are you being asked to draft a specific contract, will, or other legal document? Spell out the exact documents to be delivered to the client. Especially when you are being retained to perform unbundled legal services, it is important to be specific as to where the representation ends. For example, are you responsible for filing and serving any relevant documents? Similarly, are you responsible for delivering the documents to any person other than the client? Be clear in the agreement as to what you are responsible for and what work they are responsible for (i.e. “As discussed, my obligations do not include . . . Instead, you are responsible for filing with . . .  and serving this document on . . .”).

There are other issues to consider if you are representing a client in an ongoing matter with potential litigation. In this circumstance, be sure to detail any related issues that are not involved in the scope of your representation. For example, you may want to state whether or not the representation will include work on a potential appeal if the matter is dismissed or ends with an adverse judgment. When drafting the agreement you may want to consider breaking the case down into specific phases such as: investigation of claim, legal research of resulting issues, initiating a lawsuit including filing a complaint, and case handling up to and through trial or settlement. Doing so provides a clear understanding of the stages of representation and also provides logical points for ending representation if necessary.

The fee

Be sure to include the rate and manner of billing for the work detailed in your scope of work. Be explicit in stating whether the work is flat fee, hourly or contingency. Also be clear as to which party is responsible for important fees such as filing fees, deposition transcripts, expert fees and other costs. Finally, state whether or not the client is responsible for a retainer amount, and, if so, what that amount is.

Other important provisions

You should include standard contract provisions such as specifying a choice of law, jurisdiction and venue for legal actions arising out of the representation.  Further, you may want to consider including an agreement that potential malpractice claims be subject to mandatory binding arbitration or mediation.

A termination clause can be important in defining what happens if the representation is terminated early. For example, how much of the retainer is refundable if you begin work on the case, but the client chooses to end representation early?  Under what circumstances can you withdraw from the case (for example, if the client has misrepresented the facts of the case; refuses to comply with requests for information necessary for the representation; or fails to stay current with payments related to the representation).

Similarly, you may want to include a provision stating that this retainer agreement is the full and final agreement and overrides any prior agreements between you and the client. Can the agreement be amended? If so, state how it can be amended.

Many lawyers include (and some states require) statements regarding whether the attorney has professional liability insurance; statements regarding the handling of funds placed in IOLTA accounts; statements regarding the results of a conflict check; statements regarding the use of email to communicate with the client; statements regarding green office policies; and statements regarding the confidentiality of information provided to the attorney. As noted above, you should review your state’s rules of professional conduct to be certain that your retainer agreement fully complies with any requirements.


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