You're on the phone with a lawyer's office trying to find out what it's going to cost you and you hear, "Our retainer fee is .......", your mind suddenly stops registering everything else and all you can think is "What's a retainer fee?".
Does that sound familiar? From my experience with clients, when I say the word retainer they usually nod as if they understand, but there is a glassy and dazed look in their eyes that shouts “what are you talking about?
So don't worry. If you’re like the majority of people then you’ve never dealt with a “Retainer" and don’t know what the word means. And even if you are familiar with the term you may still find the whole thing confusing or strange. So let me explain what a retainer is and why we use them.
Unlike the personal injury lawyers that you see on TV, divorce lawyers don’t get paid only if they win. (Because really, when a divorce occurs is there ever a true “winner"?)
A retainer fee is, basically, you pre-paying for services a lawyer is about to perform for you. Here’s one way to look at retainers.
You decide that you want to hire an attorney to represent you in your divorce. Of course when you hire that lawyer they are going to require you to pay for their product. As an attorney their “product" is the time spent on your matter using the knowledge and experience they have.
The problem is they don’t know exactly how much of their product will be needed to help you solve your problem. And once their product is used they can never get it back, and they likely had other people who wanted to pay them for their product but they had to turn them down because they were using their product to help you.
They want to make sure that they get paid for their product, they just don’t know how much of their product they will be using to help you until after they have used it. So because of this they have you pay them in advance for their product. This advance payment is what is called a retainer. And most attorneys require this retainer be refilled every two weeks or each month as long as theyu are working on your case.
Now Here is an example of how a retainer works:
Say you come in to sign a representation agreement with an attorney for your contested divorce matter. You would pay them right from the start a fixed retainer amount – let’s say $100 to make it easy.
Then, because they (hypothetically) charge $5 an hour, any time they work on your case they keep track of all the time spent on it, down to the tenth of an hour. So if in the first month on your case they worked for 3 hours, they would charge $15 against the $100 you initially paid, leaving a month-end balance of $85.
You would then need to pay them $15 to bring your retainer balance back up to the $100, so they can start the next month’s work.
Let’s say, then, that they finish working on your case that next month, after 10 more hours of work. After taking out the $50 from the retainer for that month, they’re done with your case and all issues have been resolved and they refund you back the remaining $50.
Most lawyer's use retainer fees for contested divorces simply because it gives them a way to maintain payments in an ongoing case. There are ways to lower your fees, though, and it comes down to one simple thing: time. If you as the client offer up your time to make phone calls, send faxes, or secure records by doing your own leg work, that is time not being charged to you by an attorney.
So, if you do have have a contested divorce case and you want to save as much money as possible on attorney’s fees, you need to do as much of the work as possible yourself. And what type of work am I talking about? Things such as contested doctors bills or records, previous court reports and etc.
What happens if you don’t refill your retainer back up after it becomes depleted or has a negative balance?
Again, an attorney's product is the time that they spend on your case, and they can never get that back after it’s been spent. So, if a client doesn’t refill their retainer account most attorneys will not continue to work on the case since there is no guarantee they will be paid for their product. And most attorneys will then request to withdraw from your divorce case if the retainer isn't refilled.