A Retainer Fee Is an Amount of Money Paid Upfront to Secure the Services a Lawyer
The retainer and hourly billing is the classic way an attorney will bill their client. The two go hand in hand and it is important to understand how an attorney’s hourly rate and retainer interact.
Just like a mechanic or a therapist, attorneys bill their clients by the hour. Each attorney’s hourly rate is different and the average hourly rate changes substantially depending on the area of law the attorney practices and where they are located.
Attorneys in major areas charge more than attorneys in small towns and the more specialized and experienced an attorney is, the more they will charge. When a client hires an attorney, the attorney will give them a fee agreement that will spell out exactly how much they are charging per hour.
Once the attorney sets up their fee agreement with the client they will also set up a retainer. A retainer is designed to give the client a certain number of hours of the attorney’s time.
This guarantees that the attorney will be paid and ensures that the client knows the attorney will use their time to work on the client’s case. When the attorney exhausts the initial retainer fee, the remainder of the work is usually performed at an hourly rate.
Another form of retainer agreement is the evergreen retainer. An evergreen retainer works like the gas tank in your car, but for an attorney. As part of the evergreen retainer, the attorney will set the minimum amount that has to be in the retainer at all times so that there is always some time on the meter in case something comes up.
As a simple example, an attorney charging $300 per hour may ask a client to keep a starting retainer of $2400 and a minimum balance of $900 in the retainer in order to have three hours in the bank just in case.
As the attorney works on the case, the attorney earns the money the client gave them. If the attorney takes too big of a retainer up front, they will return the money left over to the client when they close the matter. If the retainer runs out, the client risks the attorney stopping their work on that case until the client pays more to the attorney.
Retainers, hourly billing rates, and minimum balances are very specific to each case and client so it is difficult to predict exactly what retainer any Colorado lawyer will ask any specific client to pay, but the concept is similar for every Colorado attorney.