Lawyer Retainer Cost | How Much Do Retainers Cost? Full Details


Intro: Lawyer Retainer Cost | Full Details on Legal Retainers & Costs?


If you’ve ever needed legal advice or to be represented by a lawyer, you may be familiar with lawyer retainer fees.

However, legal terminology and billing structures can be complex. This AdvisoryHQ article will cut through the legal jargon to provide a detailed analysis of lawyer retainer costs.

First and foremost, we’ll cover the following questions that are commonly asked by consumers:

  • What is a lawyer retainer fee?
  • How much do retainers cost?
  • How are attorney retainer fees determined?
  • What is an attorney on retainer?

Keep reading for a complete breakdown of attorney retainer fees, complete with tables and charts explaining how and why retainer fees for lawyers vary across the United States.

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Typical Fee Arrangement for Legal Services

Before we delve into the specifics of lawyer retainer fees, we’ll outline the most common fee arrangements by which lawyers are paid.

  • Hourly rate – The lawyer is paid for legal work done on an hourly basis. In other words, for each hour of work done by your lawyer, you pay an agreed upon hourly rate for his or her services.
  • Flat fee – A price agreed upon upfront that will cover all of the legal work to be done by your lawyer. Flat fees are typically assigned for straightforward and well-defined services such as trademarks, patent filings, and incorporations, wills, and sometimes uncontested divorces.
  • Retainer – An advance payment, typically for the attorney’s hourly rate, for the lawyer to take care of a specific case. Lawyer retainer fees are examined in detail  below.
  • Contingency fee – For certain types of cases in which a settlement is likely, lawyers may work on a contingency fee basis. This means that he or she does not request payment from the client upfront. Rather, he or she gets a certain percentage of any money secured on the client’s behalf. Contingency fees are commonly accepted for cases including personal injury, debt collection, and automobile accident lawsuits.

What is a Lawyer Retainer Fee?

A lawyer retainer fee refers to money paid to a lawyer in a lump sum to secure his or her legal services. The retainer fee covers legal fees and the cost of legal action taken on the client’s behalf.

You will generally be asked to pay the retainer cost at the time you hire a lawyer. You can think of it as an advance payment for the lawyer’s hourly rate.

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The money will be held in the lawyer’s trust account simply as a means to retain the lawyer as your legal representative; it will not be paid to the lawyer until after you, the client, have been billed for legal services.

Most lawyers bill periodically for the services they have provided to date. If the case is not yet closed and the retainer is running low, your lawyer may ask you for additional money to top up the retainer.

In addition to the retainer fee for your lawyer, you will likely also be asked to sign a retainer agreement. The agreement is a written contract that solidifies the relationship between a lawyer and his or her client.



What Is an Attorney on Retainer?

According to the American Bar Association, a lawyer on retainer refers to legal services that are paid regularly for access to any legal advice or services that arise: “By paying a retainer, a client receives routine consultations and general legal advice whenever needed.”

Attorney retainers are particularly beneficial for individuals and businesses who have a significant amount of legal work on a regular basis. On the other hand, those who do not see a lawyer regularly typically do not need an attorney on retainer.

Having a lawyer on retainer is different from a one-time retainer cost which, as outlined above, is advance payment for a finite amount of work to be billed after the work is complete.

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How Much Does a Retainer Cost?

It is difficult to predetermine the attorney retainer fee that will be required of you because it varies greatly from lawyer to lawyer. The retainer will depend on the type and extent of legal advice and services that you require.

A lawyer may only charge a small fee for a legal problem that can be dealt with relatively quickly and painlessly. For bigger cases, especially those requiring time spent in court, most lawyers will charge a higher price for the attorney retainer.  

Additionally, retainer costs depend on the following:

  • How much experience a lawyer has. Those who have been practicing for many years generally charge more, while younger lawyers will charge less.
  • The location of the law firm. Retainer costs will usually be higher in larger cities and lower in small towns.
  • The size of the firm. Large firms typically charge a higher attorney retainer fee, while small firms and independent practitioners often charge lower rates.

For those struggling financially or with a limited ability to pay the full lawyer retainer fee upfront, many firms will negotiate the retainer cost or allow it to be paid in several installments.

It is important to note that a lawyer’s hourly fee is a big determinant of the attorney retainer fee. Therefore, understanding the lawyer’s hourly rate is usually the first step in determing what the retainer fee for the lawyer will be.

As previously outlined, the hourly fee is used to estimate the total bill, which is calculated based on the number of hours the case is likely to take. A percentage of the bill will then determine the retainer cost that will be paid upfront to reserve the lawyer. Different firms will request different percentages for the lawyer retainer.

Although the cost of an attorney retainer varies a great deal, the following table is adapted from the Laffey Matrix, identifying average hourly rates for 2009-2010, 2010-2011, and 2011-12, based on lawyers’ years of experience.



Lawyer Retainer Costs and Fees

 

2009-2010

2010-2011

2011-2012

20+ years

$465

$475

$495

11-19 years

$410

$420

$435

8-10 years

$330

$335

$350

4-7 years

$270

$275

$285

1-3 years

$225

$230

$240

Paralegals & Law Clerks

$130

$135

$140

Table 1: Hourly rate for American lawyers based on years of experience for 2009-2010, 2010, 2011, and 2011-2012

Similarly, the following table outlines average hourly rates for attorneys based on rural versus urban areas and firm size.


Average Lawyer Rates

Location

Size of Law Firm

Rural Area

Urban Area

Fewer than 50 lawyers

More than 1,000 lawyers

Hourly Rate

$100 – $200

$200 – $400

$343

$727

Table 2: Average hourly rates for attorneys based on rural versus urban location and firm size.

Once again, it is clear that there is a wide range of hourly rates for lawyers across the United States. Generally speaking, however, lawyers who charge lower hourly rates will also charge lower retainer fees.

Similarly, attorney retainer fees tend to increase if you work with a lawyer who charges a higher hourly rate. Of course, in either case the retainer typically increases in price when a case is more complex or there is more work to be done.



Determining the Attorney Retainer Fee

With such a variation in hourly rates, you may still be wondering, “How much do retainers cost?” Despite the variation mentioned above, we have compiled a sample list of average attorney retainer fees in select American states. Many lawyers will outline their fee structures on their websites.

While this is not an inclusive list of retainer costs, it will help you get a sense of the cost associated with a lawyer retainer for family law, broken down by hourly rate and average retainer cost.

Attorney Retainer Fees: Maryland, Upstate New York, New Jersey, and North Carolina

Location of Practice

Average Hourly Rates

Average Retainer Costs

Maryland

$200 – $450

$2,500 – $7,500

Upstate New York

$100 – $200

$1,500 – $3,500

New Jersey

$250 – $375

$1,000 – $6,500

North Carolina

$150 – $250

$1,000 – $9,000

Table 3: Legal fees for family law in select states

Moreover, retainer costs can increase expontentially depending on the number of times a client’s case is taken to court. The following table demonstrates an example of one Upstate New York lawyer’s experience with retainer costs, based on the number of court visits that were made.

Number of Court Appearances

Lawyer Retainer Fee

1

$500

2

$1,000

3

$1,500

4

$2,000

As you can see, this New York lawyer recommends allocating about $500 for each court visit that is required. He also notes that the average number of court visits is three or four. However, for long, drawn out cases spanning multiple years, an attorney retainer fee of $6,000 is not unheard of: a lawyer once represented a client in a complicated case that required 30 court visits over a span of four years. With an hourly rate of $200, the hefty $6,000 retainer cost was determined.

Number of Court Appearances

Lawyer Retainer Fee

1

$500

2

$1,000

3

$1,500

4

$2,000

Table 4: Lawyer retainer fees based on number of court appearances.

The same lawyer in New York state also points out that the nature of the opposing attorney can affect a retainer cost. For example: “Some attorneys are more inclined to negotiate and settle, while some are more inclined to issue ultimatums and proceed to trial. I have often doubled my retainer simply because the attorney on the other side is known to be difficult (which translates into my expending more time and effort on the case).”

Based on this information, it is important to remember that these are simply anecdotes and averages based on a selection of lawyers across the United States. Actual rates will vary according to the previously identified factors.

It should also be noted that lawyers do not have to charge a retainer cost. Most lawyers will, as it ensures they will be paid after providing legal services. This is especially important in ensuring the lawyer still gets paid, even if the client decides to stop working with him or her.

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Important Considerations

Before settling on an attorney retainer fee, you should take the following considerations into account.

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Lower Is Not Always Better

“You get what you pay for” is a common phrase that can be applied to many aspects of life, and attorney retainer fees are no expception. According to Criminal Defense Lawyer:

“With legal fees so high, most defendants understandably want to pay as little as possible for effective representation. However, a low hourly rate can be misleading. An experienced attorney with a high hourly rate may be able to resolve a case more quickly and satisfactorily than a novice with a much lower hourly rate, and therefore be less expensive in the long run.”

Clear Communication Is Key

As this article has demonstrated, attorney retainer fees depend on a wide variety of factors, and therefore vary greatly from case to case. Before agreeing to work with a lawyer, it is important to have him or her explain the fee structure, and how and why it is subject to change, in full. While cases may take an unexpected turn, lawyers can usually provide you with a fair estimate of the length of time they will need to spend on the case. In turn, you will have a good idea of how much your retainer costs. If something is unclear, ask.

Keeping Track of Your Retainer

Since the retainer is kept in your lawyer’s trust account, to be used as billing occurs, you can ask your lawyer for an account statement at any time.

This will tell you how much of your retainer is remaining. Depending on the stage you are at in your legal case, it will also give you an indication of whether or not you will need to top up the retainer.

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Unspent Funds

If your lawyer concludes your case without having spent the whole retainer, you are entitled to have the remaining money given back to you.

Refer to the State Bar Association

For further information about legal fees in your state, you can refer to your state’s bar association. For example, the North Carolina State Bar publishes information online pertaining to the client-lawyer relationship, including fees lawyers may and may not charge. Such resources can be useful in providing objective information about how fees are determined in your state. Specifically, it can shed light on the common question, “How much does a retainer cost?”



Conclusion

In our examination of lawyer retainer fees, one thing is clear: legal fees can be very complex and expensive. Additionally, it is nearly impossible to accurately answer the question of how much retainers cost because there is so much variation from lawyer to lawyer. Typically, however, the lawyer retainer fee is an agreed upon amount of money provided upfront, based on the lawyer’s hourly rate and to be applied toward the total bill. Once you pay the attorney retainer fee and sign an agreement, it is generally understood that you have agreed to work with that lawyer.

Remember, an attorney on retainer, also known as a lawyer on retainer, is different than a one-time retainer fee. The former reserves your attorney for ongoing legal advice, while the latter is used for finite cases.

It is always wise to ask prospective lawyers to fully and clearly explain the scope of their legal services and their fee structures. Moreover, most experienced lawyers can give sound estimates of how long a case is likely to take. Be sure to ask for this estimate before agreeing to an hourly rate. If a lawyer cannot satisfactorily explain the fees he or she will charge for your case and why, you may wish to choose a different lawyer. With more than 1.3 million lawyers licensed to practice law in the United States as of 2015, you are sure to find the right fit for you.

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