How Does a Retainer Work?

Written By Allison R. McAlpine

Many family law/divorce lawyers work on a retainer basis, meaning that they ask you for a sum of money up front known as a “retainer.”  Lawyers will also quote you an hourly rate which the client is charged for the work on his/her file.  This understandably confuses clients at first as they are being quoted two different sums of money for work on their file.   In this post, I will explain what a money retainer is in the family law context.

A money retainer is a deposit.  You pay your lawyer a sum of money as a deposit (“the retainer”).  The lawyer deposits those funds into his/her trust account.  That money is in trust for you.  You are then billed by the hour (usually in increments of 0.1 of an hour depending on the law firm) for all Retainer Work done on your file.  When the law firm issues you a bill that bill will be based on the hourly rate and any disbursements (out of pocket costs such as couriers).  The bill will be sent to you and your lawyer will pay that bill from the retainer funds they are holding in trust for you.  Typically, the lawyer then requests you to “top up” the retainer so that there are always funds to draw from.  At the end of your file, after your last bill, any retainer deposit funds left in trust are returned to you.

Let’s look at an example.  If a client hires a lawyer for $325/hour and the retainer deposit is $1500.00, then the client provides the $1500.00 and the lawyer puts it in his/her trust bank account for the client.  Let’s assume the client’s first bill is $500.00.  The lawyer pays that $500 bill from the retainer funds, so the client now has $1000.00 left in the trust account on retainer.  The lawyer may request the client to top up the funds by $500 so that they always have $1500 to draw from on any given billing day.  If the client’s last bill was $1000 and the client had $1500 in trust at that time on retainer then the client would get refunded $500.00 of retainer funds from the lawyer when the file is closed.

There is no standard retainer deposit or hourly rate for law firms as each firm has their own policies in that regard.  Further, Loss of a Marriage in the family law/divorce context, usually lawyers will have a different retainer requirement for a court matter as opposed to a separation agreement or uncontested divorce matter.

I hope this helps explain how a retainer deposit works in the family law/divorce context. Feel free to contact our office if you have any questions about the retainer structure and hourly rates at our firm by calling 705-503-3696.

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