What is the difference between a retainer and a retainer agreement?
How a retainer works: Work cannot proceed on a client's file unless there are funds in the client's trust account.
If the client has a retainer of $2,500 in trust and our invoice to the client one month is for $2,800, we pay for the first $2,500 out of trust and invoice the client for $300. In addition, our invoice would indicate that the client needs to replenish their retainer. So the client needs to pay an additional $2,500, or a total of $2,800.
If the client has a retainer of $2,500 in trust and our invoice to the client one month is for $1,500, we will pay the $1,500 out of the retainer and invoice the client. The invoice would show that the client has $1000 remaining in trust and also needs to replenish their retainer. So the client needs to pay $1,500 to restore the retainer to $2,500.
Our policy is the same for every client: we need the account paid in full and the retainer replenished every month.
The retainer agreement is the contract between the client and the law firm. It states what the law firm is agreeing to do for the client. It also spells out the hourly rate, how time is charged to your bill, examples of disbursements you would be responsible for, and so on.
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