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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
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.
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:
- 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.
- 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.
Getting Help with a Retainer Agreement
Do you have any questions about a retainer agreement and want to speak to an expert? Post a project today on ContractsCounsel and receive bids from contract lawyers who specialize in contracts.
Meet some of our Retainer Agreement Lawyers
Amber M.
Amber Masters has over 9 years of experience as a contracts attorney, helping small businesses with an array of agreements, such as purchase agreements, master service agreements, and employment contracts. She has an extensive background in employment agreements for dentists, doctors, and other health care professionals. She is a highly rated and acclaimed estate planning attorney and personal finance expert, who has been featured on CNBC, NBC, and Yahoo Finance. She successfully launched and sold a fintech startup and can empathize with the issues small and mid-size businesses face. Licensed in Oklahoma and Arizona.
Jason H.
Jason has been providing legal insight and business expertise since 2001. He is admitted to both the Virginia Bar and the Texas State Bar, and also proud of his membership to the Fellowship of Ministers and Churches. Having served many people, companies and organizations with legal and business needs, his peers and clients know him to be a high-performing and skilled attorney who genuinely cares about his clients. In addition to being a trusted legal advisor, he is a keen business advisor for executive leadership and senior leadership teams on corporate legal and regulatory matters. His personal mission is to take a genuine interest in his clients, and serve as a primary resource to them.
Jeremiah C.
Creative, results driven business & technology executive with 24 years of experience (15+ as a business/corporate lawyer). A problem solver with a passion for business, technology, and law. I bring a thorough understanding of the intersection of the law and business needs to any endeavor, having founded multiple startups myself with successful exits. I provide professional business and legal consulting. Throughout my career I've represented a number large corporations (including some of the top Fortune 500 companies) but the vast majority of my clients these days are startups and small businesses. Having represented hundreds of successful crowdfunded startups, I'm one of the most well known attorneys for startups seeking CF funds. I hold a Juris Doctor degree with a focus on Business/Corporate Law, a Master of Business Administration degree in Entrepreneurship, A Master of Education degree and dual Bachelor of Science degrees. I look forward to working with any parties that have a need for my skill sets.
Atilla B.
Atilla Z. Baksay is a Colorado-based attorney practicing corporate and securities attorney. Atilla represents clients in the negotiation and drafting of transactional (e.g. master service, purchase and sale, license, IP, and SaaS agreements) and corporate (e.g. restricted stock transfers, stock options plans, convertible notes/SAFE/SAFT agreements, bylaws/operating agreements, loan agreements, personal guarantees, and security agreements) contracts, in-house documents (e.g. employment policies, separation agreements, employment/independent contractor/consultant agreements, NDAs, brokerage relationship policies, and office policy memoranda), and digital policies (e.g. terms of service, privacy policies, CCPA notices, and GDPR notices). Atilla also reviews, and issues legal opinions concerning, the security status of digital currencies and assets. Following law school, Atilla practiced international trade law at the Executive Office of the President, Office of the United States Trade Representative, where his practice spanned economic sanctions enacted against goods originating in the People’s Republic of China valued at $500 billion. Afterwards, Atilla joined a Colorado law firm practicing civil litigation, where the majority of his practice comprised of construction defect suits. Today, Atilla's practice spans all corporate matters for clients in Colorado and the District of Columbia.
Gregory B.
I love contracts - and especially technology-related contracts written in PLAIN ENGLISH! I've worked extensively with intellectual property contracts, and specifically with IT contracts (SaaS, Master Subscriptions Agreements, Terms of Service, Privacy Policies, License Agreements, etc.), and I have built my own technology solutions that help to quickly and thoroughly draft, review and customize complex contracts.
October 8, 2021
Clara D.
After graduating from The University of Chicago Law School in 2002, Clara spent eight years in private practice representing clients in complex commercial real estate, merger and acquisition, branding, and other transactional matters. Clara then worked as in-house counsel to a large financial services company, handling intellectual property, vendor contracts, technology, privacy, cybersecurity, licensing, marketing, and otherwise supporting general operations. She opened her own practice in September of 2017 and represents hedge funds, financial services companies, and technology companies in a range of transactional matters.
October 12, 2021
Grant P.
Founder and owner of Grant Phillips Law.. Practicing and licensed in NY, NJ & Fl with focus on small businesses across the country that are stuck in predatory commercial loans. The firm specializes in representing business owners with Merchant Cash Advances or Factoring Arrangments they can no longer afford. The firms clients include restaurants, truckers, contractors, for profit schools, doctors and corner supermarkets to name a few. GRANT PHILLIPS LAW, PLLC. is at the cutting edge of bringing affordable and expert legal representation on behalf of Merchants stuck with predatory loans or other financial instruments that drain the companies revenues. Grant Phillips Law will defend small businesses with Merchant Cash Advances they can no longer afford. Whether you have been sued, a UCC lien filed against your receivables or your bank account is levied or frozen, we have your back. See more at www.grantphillipslaw.com
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Retainer Agreement
Maryland
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.
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.
Quick, user friendly and one of the better ways I've come across to get ahold of lawyers willing to take new clients.
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Retainer Agreement
Location: Iowa
Turnaround: Less than a week
Service: Contract Review
Doc Type: Retainer Agreement
Page Count: 8
Number of Bids: 2
Bid Range: $400 - $700
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