When you’re thinking about divorce expenses or looking to hire a divorce attorney, it’s important that you take into consideration a divorce retainer and understand retainer fee agreements. If you’ve never hired a lawyer before, you may be wondering, “What’s a Retainer?” This article explains what a retainer is, how a retainer works in divorce and family law cases, and what you need to know before signing one.
Legal Retainer Definition
A retainer (also sometimes referred to as a, retainer fee) is a good-faith, advance payment made to a lawyer for legal services. The retainer can be a single advance payment or reoccurring, depending on your situation. (We’ll talk more about single vs. reoccurring payments later in the article).
In addition to signing an engagement letter (or representation contract), the retainer establishes a client-attorney relationship between the individual and the lawyer. Without the retainer, an attorney will not work on your divorce or family law case, provide legal advice or representation. Thus, the retainer provides the individual with legal services and ensures that the attorney will be paid for such services.
How Does a Retainer Work?
First, the retainer is typically collected during the intake appointment with the attorney. There are a number of different payment methods available to you. Learn about the different retainer payment options by reading: How to Pay for a Divorce Lawyer. Additionally, in some cases, your spouse can be ordered to pay your attorney fees. To learn more about when you can don’t have to pay attorney fees, read: Attorney Fees.
After intake, the lawyer puts the retainer into a separate trust account for the client. The retainer belongs to the client. No money from the retainer can be collected by the attorney unless it has been earned.
Then, as the lawyer works on the divorce or family law case, s/he charges the client for legal services provided. The client pays for such legal services with the retainer (the money in the trust account). As services are rendered, the lawyer withdraws money from the retainer for payment. Once earned, money from the retainer is deposited into the firm’s account and no longer belongs to the client. Any unearned portion of the retainer is returned back to the client. (We’ll talk more about retainer refunds later in the article).
Divorce Retainer: How it Works
Typically, divorce and family law attorneys in Minnesota require an initial retainer somewhere between $3,000 – $5,000 and charge on an hourly rate basis. Minnesota laws, specifically Minnesota’s Rules of Professional Conduct Regarding Fees, guide what attorneys can charge, when they can charge, how they can charge and their responsibilities to the client-attorney relationship.
For example, in Minnesota, it’s illegal for an attorney to charge contingency fees in family law matters. However, Minnesota divorce and family law attorneys can legally seek reimbursement from the client for in-house costs and materials, like: paper; printing; coping; telephone charges; postage; etc…
TIP: In-house costs quickly add up and can exceed people’s expectations. Therefore, it’s important that you ask the attorney how additional case costs and expenses are handled. For example, at Majeski Law, we do not charge the client separately for such in-house expenses listed above.
Initial Retainer vs. Replenishing Retainer Fees
The initial retainer is the amount your divorce or family law attorney believes is reasonably necessary to start working on your case. As your case proceeds, you may need to replenish your initial retainer to continue working with the attorney.
Thus, the initial retainer may cover all legal services during your divorce or family law case or you may have reoccurring retainer fees. Whether you’ll have a single retainer fee or reoccurring retainer fees will depend mostly on you, your attorney and the specifics of your case. (We’ll talk more about replenishing the retainer later in this article).
TIP: Don’t be afraid to bring up money concerns with your divorce or family law attorney. In fact, it’s best to address any financial issues right away with your attorney. Generally, the more you, as the client, do yourself, the more money you can save. Therefore, it can be helpful to identify tasks that you can do yourself, and tasks that you will need an attorney to complete for you.
Retainer versus Additional Expenses
Typically, the retainer is only used to pay attorney fees. However, you’ll have additional case expenses, such as court filing fees. Court fees are set by the court, collected by the court, and paid to the court. You pay court fees regardless of whether you have an attorney or not as they are mandatory in the state of Minnesota. For example, it costs about $400 to file for divorce in Minnesota.
In addition, during your divorce or family law case, you may acquire additional services from a third party, such as a mediator, custody evaluator or a property appraiser. Like court fees, your attorney has nothing to do with third party fees, and retainer funds are not used to pay such third party fees. Instead, payment for services from a third party should be arranged between the third party and the client, directly.
An attorney may be willing to use money from the retainer to pay a court filing or process server fee on your behalf, but those tend to be the only (and rare) exceptions. If retainer money is used to pay a court or process server fee, the firm can provide you with a court and/or process server receipt. In addition, best practice would also be to have such items and services clearly accounted for on the firm’s invoice.
Thus, the retainer does not cover your divorce or family law case expenses. Instead, the retainer is only for attorney fees. We stress this point, because some individuals mistakenly take the initial retainer fee to be the total cost of their divorce or family law case.
Although attorney fees (and thus, the retainer) impact the total cost, they’re not the only expenses in a divorce or family law case. Instead, how much your divorce or family law case will cost, will depend upon your specific situation and several different factors. Therefore, it’s best if you can budget accordingly.
Retainer and Retainer Fee Agreement
The terms of your engagement letter or representation contract with your attorney should include a section regarding the retainer fee agreement. The retainer fee agreement or retainer agreement you make with your lawyer should not only be in writing, but should clearly state the firm’s procedures and policies regarding the following: Retainer amount; Hourly rates; Services provided; Scope of representation; etc…
Divorce Retainer and Accounting Practices
In addition, your lawyer should provide you with a regular invoice. A good invoice shows you what services were provided, who completed the work (such as, an attorney or a paralegal), and the amount withdrawn from the retainer.
Best practice would be that you receive a monthly invoice, unless no services were provided that month. In that case, depending on the firm, you may or may not receive an invoice that month. The firm’s accounting and invoice practices should also be explained and stated in writing in the retainer agreement.
Retainer Fee, Replenishing the Retainer and Legal Representation
As mentioned earlier, you may need to replenish the retainer. Some divorce and family law attorneys require the retainer to be replenished to the initial amount, while others require a larger or smaller amount. Inability to replenish the retainer usually results in the divorce or family law attorney withdrawing from the case. In that instance, the client would either need to represent him/herself in the divorce or family law matter or seek services from a free legal clinic. Again, the firm’s policy regarding representation and retainer replenishment should be clearly explained and stated in writing in the retainer agreement.
Divorce Retainer Refund
Once your case is completed and closed with the firm, you should receive your last invoice. At this time, you may still have money left in your retainer. As previously mentioned, the retainer money belongs to the client, until it’s earned. Therefore, any unearned portion of the retainer belongs to the client and must be returned.
In addition, you, the client, may fire your divorce or family law attorney at any time. Similarly, whatever balance is left in your retainer after closing out your case, would be returned to you. Therefore, whether you end up receiving money back, depends on the remaining balance of your retainer when your case is closed (regardless of whether your case is finished or because you fired your attorney).
Because the retainer money belongs to the client until earned and the client is not receiving the entire retainer fee, it’s not truly a retainer refund. It’s actually more accurate to call it an unearned retainer return.
However, because “unearned retainer return” is not commonly used or searched for by the public, “retainer refund” is used, and refers to the remaining (unearned) portion of the retainer that gets returned back to the client. Again, we emphasize that the client only receives the unearned portion of the divorce retainer at the end of the case.
Divorce Retainer Summary
- The retainer is money that you designate up front to your lawyer to be used to pay for services provided during your divorce or family law case.
- The retainer is put into a trust account and belongs to you. No money is collected from the retainer until it’s earned by the attorney.
- As services are rendered, money from the retainer is paid to the firm. Once collected by the firm, that money no longer belongs to the client.
- Depending on your case, you may need to replenish the initial retainer. Inability to pay for services, by not replenishing the retainer, dissolves the client-attorney relationship, legal representation and all legal services.
- At any time in your case, you can decide to represent yourself or fire your current attorney and hire another attorney. At this time, the remaining balance would be returned back to you. Otherwise, any remaining balance is returned back to you at the end of your divorce or family law case.
- It’s very important that you read the retainer fee agreement carefully to make sure that the firm’s policies and procedures are stated in writing and that you have a complete understanding before signing the contract.
For other divorce or family law questions, please consult the list to the left or the FAQ page. If you’re interested in retaining an attorney to help you, please feel free to contact my office for a consultation using the contact information on the left or the contact form on the Majeski Law home page. For Court rules, please click here.