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What is a Retainer Agreement?

A retainer agreement is a work-for-hire legal document or a service contract between a company or an individual and a client. It falls between a one-off-contract and a permanent employment contract. It allows clients and customers to pay in advance for professional services of a company or individual.

You can read more on retainer agreements here.

Retainer Agreement Templates

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Real Estate Retainer
Used for real estate professionals.
Consulting Retainer
Used between consultants and clients.
Simple Retainer
Used for simple retainer engagements.
Financial Services Retainer
Used for financial professionals.
Creative Services Retainer
Used for creative professionals.
IT Support Retainer
Used for IT professionals.
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Purpose of Retainer Agreements

The purpose of the retainer agreement is to set out the duties of the parties so that all parties have an agreement on the services that will be provided, how they will be provided, when and at what cost. Retainer agreements are typically used to hire lawyers and freelancers, although they may also be used for consultants, accountants, and other professionals.

The retainer fee ensures that the hired service provider reserves time for the client in the future when there is a need for their services. Unlike a one-time contract, a retainer agreement is a long-term work-for-hire contract and thus can retain ongoing services.

Here more on uses of a retainer agreement.

How Retainer Agreements Work

Retainer agreements do not work on a single formula. However, there is a basic structure followed in all retainer agreements. One party, like a contractor, agrees to provide certain number of hours or certain deliverables each month to the client. In exchange for locking in those hours or deliverables, the client pays a certain amount of fee, called the retainer fee, in advance to the contractor. Once the work is complete, the retainer fee applies to what the contractor is owed, and other hours will be billed at the contractor’s set rate.

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Advantages of Retainer Agreements

Retainer agreements are gaining popularity as service industries need more income stability and try to improve client relationships. Retainer agreements are widely used for legal services, consulting services, accounting services and by freelancers. Here are some benefits of using a retainer agreement:

  • Stability: A one-off contract might not bring stable income to an individual or company that is offering its services. However, a fixed retainer fee associated with a retainer agreement ensures stability.
  • Time Saved on Marketing: Given that freelancers and professionals would need to look for other clients after a one-off contract ends, marketing commitments are high in a one-off contract for the professional. In a stable retainer agreement, they benefit from a stable fee from the client and a long-term relationship with the client. Thus, they do not have to spend more time marketing themselves.
  • Improved relationships: A retainer agreement is a long-term professional relationship. It ensures that the professional is available when needed by the client. This ensures a long-term partnership.
  • Predictable Cash flow: Since retainers use an agreed upon retainer fee over a long period of time, it also makes it easier to estimate and maintain cash flows.
  • Improved Work: With a retainer agreement, a professional Is paid on a continuous basis, allowing them to focus entirely on the clients’ needs and produce high quality work.

Disadvantages of Retainer Agreements

Retainers come with multiple benefits. Most freelancers and companies would agree that its benefits outweigh the drawbacks. However, there are drawbacks to a retainer agreement for both the client and the professional. Some of them are discussed below:

  • Time: A retainer agreement the professional commits to a certain number of hours to the client. This means that they are being locked into a specific schedule.
  • Opportunity: Being locked into a specific schedule means that the professional might have to pass on exciting opportunities that might come their way.
  • Risk: For a client, retainer agreements can pose some risks. The client pays for the services before receiving them. In months where services are not needed, the client still pays for the hours agreed upon, thus losing money.

Here more on risks and benefits of a retainer agreement.

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Who Needs a Retainer Agreement?

A retainer agreement is widely used in the legal field. It is common for people seeking legal services or anticipating needing legal services to pay a retainer fee to a lawyer who will be available when they need them. This retainer can be an advanced payment for a monthly recurring payment to the lawyer.

Retainer agreements are also used by consultants to provide services to a client over a long-period of time. Especially when the client and professional have established a relationship and the client predicts needing the consultant’s expertise, a retainer agreement provides access to the consultant’s time and services. Freelancers also find retainer agreements to be beneficial. Freelancers often struggle to find a stable source of income and a predictable cash flow. A retainer agreement is a great way to ensure that they have a stable income over a long period of time.

Are you planning to sign a retainer agreement? Here are some things you should consider.

Types of Professional Services Retainer Agreements

There are two types of retainer agreements that a company or individual can use:

  1. Pay-for-work retainers: Pay-for-work retainers are often used by companies and professionals that intend to receive ongoing payment on a monthly basis from their clients. This type of a retainer agreement is used when relationships with clients is slightly underway. Companies or professionals get paid for the hours of the work they provide. Pay-for-work retainers are not much different from a contract. However, unlike a one-off contract, professions under pay-for-work retainers are in a loop to deliver services to the client over a long period of time.
  2. Pay-for-access retainers: When companies and professionals prefer to get paid for making their expertise and knowledge available to clients, they use pay-for-access retainers. Under this, the client retains the profession on an ongoing basis when services are needed. This is generally used when the client has formed a relationship with the professional and trusts them to deliver high-quality services whenever required.

Here more on types of a retainer agreement.

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Michael M.

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www.linkedin/in/michaelbmiller I am an experienced contracts professional having practiced nearly 3 decades in the areas of corporate, mergers and acquisitions, technology, start-up, intellectual property, real estate, employment law as well as informal dispute resolution. I enjoy providing a cost effective, high quality, timely solution with patience and empathy regarding client needs. I graduated from NYU Law School and attended Rutgers College and the London School of Economics as an undergraduate. I have worked at top Wall Street firms, top regional firms and have long term experience in my own practice. I would welcome the opportunity to be of service to you as a trusted fiduciary. In 2022 I was the top ranked attorney on the Contract Counsel site based upon number of clients, quality of work and top reviews.

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Hi, my name is O.T. and I own The Walker Collective, a law firm that caters to the contractual, intellectual property, and business formation needs of creative entrepreneurs and small business owners. I am licensed to practice in Maryland and New York.

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Berkson is a dedicated, practical, and detail-oriented attorney licensed to practice in every state court of Oklahoma and the United States Northern and Eastern District Courts. He graduated from the University of Tulsa College of Law with Honors. While there, he received awards for highest grade in trial practice, legal research, and civil procedure. He was also the Executive Notes and Comments Editor for the Energy Law Journal, the official journal of the Energy Bar Association in Washington, D.C. The Energy Law Journal is one of the few peer-reviewed journals in the legal profession. Prior to becoming an attorney, Howard Berkson held executive positions involving a wide range of business and human resources management functions. He has in-depth knowledge of both business and HR practices. During his business career, Berkson negotiated, wrote, red-lined, and disputed contracts. He has answered charges, handled inspections, and supervised audits involving numerous agencies including the Department of Labor, the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, and various state agencies. Berkson honed his analytical and writing skills while earning his Bachelor of Arts degree in Philosophy from the University of Washington. He went on to obtain a Master of Arts in Labor and Industrial Relations from the University of Illinois. Berkson’s work can be found in such publications as The Energy Law Journal, Human Resource Management Review and Personnel Psychology. He is a member of Phi Alpha Delta law fraternity and of Phi Kappa Phi honor society.

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Erik has been a practicing attorney in Florida for over a decade. He specializes in employment and real estate contracts. He has represented clients big and small and can assist with any contract issue.

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Litigation

Retainer Agreement

Maryland

Asked on Jul 5, 2022

either in a flat fee or with a retainer, do attorneys charge for wait time in court/travel time to and from?

Have a protective order hearing coming up. I have the option of using a lawyer with no retainer agreement, but a deposit and an hourly rate or one with a retainer deposit and an agreement. In either case, is wait time in court charged at the hourly rate?how about travel time?

Michael T.

Answered Jul 19, 2022

Generally speaking, we charge for all time spent on a file. If I'm away from my desk for your case, then I can't work on other cases. So, yes, a five-minute hearing in court might result in a two-hour bill, because that was two hours dedicated to your case. That's why lawyers like to schedule multiple cases for the same hearing: we can pro-rate the travel and waiting time over multiple cases. Flat fees do not normally get a charge for travel or waiting time, because that time is included in the flat fee. A lot of judges start their hearings by "calling the docket" (bringing up each case one by one) and getting time estimates; then calling the cases beginning with the shortest time estimates. Some judges leave all the cases without lawyers to the end. This results in (A) the people involved in cases without lawyers see how it's done; and (B) the lawyers spend less time sitting around waiting and go back to being productive.

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