Most people have heard of a “retainer fee” or “legal retainer.” There are times that when a problem concerning the law comes up, their friends would advise them to “retain an attorney.” So what exactly does it mean to retain the services of a lawyer and what are its advantages?
A “retainer” is a fee paid to the lawyer, often monthly or annually, to retain or keep the lawyer available to the client. This type of fee is often paid by corporations and other business organizations to make sure they have access to their lawyers whenever they need advice or representation. A true retainer is usually non-refundable. In most cases, the lawyer shall provide the prospective client a Retainership Proposal that outlines the services the same is entitled to by virtue of the retainer fee such as, but not limited to, legal consultation and document review.
Now, how is this different from “legal fees” and “costs?”
On the one hand, legal fees are paid to a lawyer for his advice and services or advice and services provided by his firm while costs, on the other hand, are other expenses, such as filing fees, copying costs, or expert witness fees that the lawyer is paying to others on the client’s behalf. Usually the client is required to pay all costs as they are incurred or as part of a regular billing. In several cases, lawyers may likewise require a deposit called a “mobilization fund” from which he shall charge any and all of the said out-of-pocket expenses that may be incurred relative to the client’s cause. Any excess therefrom may either be reimbursed to the client or be deducted from the legal fees due to the lawyer.
Having a retained legal counsel on hand provides clients with a sense of security that whenever they would require the services of a lawyer, the same is available. Moreover, entering into a retainer also ensures that legal fees for services not covered by the retainership agreement shall be charged at a significantly discounted rate as opposed to those that have not entered into a retainer.
From my own personal experience, I have encountered several prospective clients who only seek the advice and assistance of a lawyer when their problems have already blown up on their faces. I usually tell them that they should have sought the counsel of a competent attorney even at the onset of their new business endeavor, as in from the time they incorporate their corporations or establish their business partnership. It is quite similar to having periodic check-ups with the physician or dentist so as to detect and deter any developing sickness rather than doing so only when the disease has already become terminal.
So just as it is important for everyone to have a regular family or personal physicians, whether general practitioners or specialists, it is no less true when it comes to securing the services of an attorney in order to protect your rights and interests in this dog-eat-dog world.