When someone makes a threat to “call their lawyer”, they most probably mean to have a personal lawyer “on retainer.” But what is a retainer? Broadly speaking, it refers to a situation when someone is in a mutual agreement with their lawyer to solicit their legal expertise from time to time, in exchange for a regular fee.
Such a client-lawyer relationship is extremely beneficial for businesses that require frequent legal consultation but lack the funds for hiring a full-time lawyer. Apart from them, individuals who are likely to need a lot of legal work might also consider a lawyer on retainer. Keep reading if you wish to know more about retainer agreements, advantages of retainer agreements, and more specifically, retainer agreements for professional services in India.
What exactly is a retainer agreement?
A retainer agreement can be termed as a work-for-hire contract. It lies somewhere along the lines of a permanent employment contract and a one time, which can further be either part-time or full-time. Its distinctive feature involves the customer or client paying for the specific professional work in advance. The objective of paying a retainer fee is to secure access to work or services anytime in the future.
A retainer agreement can include several other types of contractual provisions related to some distinguishable services, or all the parties involved can decide to enter into other contracts that define distinct terms and conditions of their professional relationship. Furthermore, a retainer fee can be paid either on a pre-negotiated and fixed-rate or a variable rate depending upon the type of retainer and, the professional’s practice.
What is a legal retainer agreement?
It is common practice for anybody looking for a lawyer’s (or an attorney’s) services to pay a retainer (more commonly known as a “retainer fee”) for seeing their case right through the end. A retainer fee can involve either a single payment in advance or recurring installments (which can be weekly or monthly, depending upon the agreement). It is essentially a down payment that is added towards the final amount billed after the task has been completed. However, you can demand the refund of a retainer fee if the desired outcome is not achieved.
For most legal advocates, the legal retainer agreement can act as the very basis of authority. It can limit an advocate’s authority to only certain services or tasks, as mandated through their agreement, instead of providing authority for general legal scenarios. For instance, if a lawyer gets hired for litigation purposes, the client will generally authorize his/her advocate accepting service of documents during litigation for which personal service upon the client is not needed. Apart from this, a client’s granting of authority to their attorney can be implied, unless if it is explicitly described in their retainer agreement. Thus, the manifestation of authority occurs through the regular practice of the legal professional by merely providing representation to the client
What is a General Retainer Agreement?
A general retainer agreement is a formal, written, and signed contract between a client and their attorney. By signing the contract, you as your attorney’s client agree that your attorney shall represent you while agreeing to offer their legal services as and when you seek them. A general retainer agreement specifies the significant terms for the functioning of your attorney-client relationship. These terms and conditions can include the duration of representation and payment for services, along with other affiliate litigation components.
What are the advantages of a Retainer Agreement?
A general retainer agreement is most suitable for businesses that deal with a spectrum of continuous legal needs as opposed to a specific and solitary legal matter. Such type of agreement offers a plethora of special benefits:
- Reasonable Cost Structure: Only the initial retainer fee remains due after the signing of the agreement, as opposed to providing a fresh new retainer fee every time a specific matter requires legal services. Many businesses find having an attorney on retainer to be more financially beneficial than having to pay for full-time, in-house counsel.
- Extreme Convenience: A dedicated attorney, available on-call anytime you require legal aid is a very convenient proposition. By working closely with you on matters related to your business, a more robust client-attorney relationship is forever in place.
- Mitigate Risks: As mentioned before, your attorney is available every time you have any questions, and will proactively help you to cut down risks while plugging legal disputes from the very beginning via counsel/advice. Furthermore, you also will not have to look for a new attorney upon facing a fresh legal problem, while risk-taking a bet on establishing a new relationship.
How to get out of a retainer agreement?
Review the retainer agreement that you signed with your attorney to compare its terms with the state bar authority regarding contingent fee. Pay close attention to rules and regulations associated with the termination of an attorney. Every state allows its clients for terminating their attorneys along with their affiliate retainer agreements, for whatever reason. But, such terminations should be subjected to the attorney’s terminated entitlement for payment of expenses and costs along with the quantum meruit of monetary recovery. Quantum meruit is a Latin phrase that means “what one has earned,” and it is another way of saying that the attorney, despite the termination of their services, will be entitled to a reasonable price for their services. This, if possible, you should strike an agreement concerning the settlement of fees before proceeding with the formal termination.
Prepare and deliver the retainer agreement’s written letter of termination, addressed, and dated to your attorney. The letter should reference the parties involved, all terms of the retainer agreement, and the reason for termination — although mentioning the reason for termination is more ethical than mandatory. If assuming, you have retained another attorney already, your letter of termination must contain a request for forwarding your old case file to your newly instated legal counsel. Or else, the letter must ask your terminated attorney to hand over the case file to you. Every terminated attorney has an ethical obligation to not engage in omissions or acts that might potentially harm a former client’s case.
If your legal situation demands specialized needs, we are always available for discussing how a general retainer agreement can benefit you.