What Is a Legal Retainer and How Does It Work?

Join us for our live event as we sit down with Founding Attorney, Lewis Landerholm, to discuss what a legal retainer is, why it's required, and how it works in a legal matter.

If you would like to speak with one of our attorneys, please call our office at (503) 227-0200, or visit our website at https://www.pacificcascadelegal.com.

Disclaimer: Nothing in this communication is intended to provide legal advice nor does it constitute a client-attorney relationship, therefore you should not interpret the contents as such.

Transcript

Intro:
Welcome to Modern Family Matters, a podcast devoted to exploring family law topics that matter most to you. Covering a wide range of legal, personal, and family law matters, with expert analysis from skilled attorneys and professional guests, we hope that our podcast provides answers, clarity, and guidance towards a better tomorrow for you and your family. Here's your host, Steve Altishin.

Steve Altishin  0:32  
I'm Steve Altishin and Director of Client Partnerships at Pacific Cascade Legal, and I'm here today with our founding attorney, Lewis Landerholm, to talk about what is a legal retainer, and how does it work? So, Lewis, how are you doing today?

Lewis Landerholm  0:46  
Oh, I'm doing great today, Steve, how are you?

Steve Altishin  0:49  
I'm doing well. So we're going to just kind of talk about a retainer, what it is, and kind of what it isn't. And so let's start with just sort of the basic question, you know, what actually is a retainer?

Lewis Landerholm  1:04  
Sure. I mean, this isn't an answer for all firms. Different firms handle their retainers differently and what they're for. So this can't be used for information for any and all retainers in the legal world. At Pacific cascade what our retainers are, and I put them in air quotes, because it's not truly a true retainer. What it is is it's it's a deposit for advanced fees and costs. So essentially, how it works is during the consultation process, myself or one of our other attorneys will quote a retainer based off of kind of the complexity of the case, what's coming down the docket, as far as how quickly we have court. And then we set deposit amount, knowing that we have X amount, not X amount, but a good amount of work at the beginning of a case, and then it allows us to get the case moving and to get everything started. Then, as we're moving forward, we send invoices every couple weeks, and we draw against that deposit. Essentially, that deposit is held in our lawyer trust account and only drawn when when we've invoiced clients. 

Steve Altishin  2:29  
Yeah, and that kind of answers a question that I hear a lot, which is, is this like a flat fee?

Lewis Landerholm  2:38  
It's not a flat fee. For some case types, we do offer flat fees, but it's very specific that it is a flat fee. In the fee agreement, it lays out that this is the total that you're going to pay in most in 99% of our cases, they aren't flat fees, because it's really hard to predict what the total cost of a case is going to look like, because we've got the potential of, do we need to go to court? Are we going to settle? Are the parties going to agree? Otherwise, we've got, you know, an opposing counsel on an opposing party on the other side, and they can, you know, control parts of the case that we can't always perceive, so that we, you know, we, we don't offer flat fees because of that, because the, you know, the the variance just is so wide from one case to the next. So we built hourly on our family law cases.

Steve Altishin  3:40  
And that kind of also dovetails in this: the retainer isn't really meant to cover the entire cost, is it? You're not trying to cover the entire cost with the retainer.

Lewis Landerholm  3:52  
In the vast majority cases, that's true. Yeah. I mean, I think there are some that are, again, in the consultation, there's some that are set up where we can predict more within a smaller variance, and with our experience of what this type of a case looks like, then a retainer payment can be, you know, like we think this will cover the total cost of the case, but again, we're having that conversation during the consultation. For the vast majority of cases, especially when litigation is involved, the deposit is to get the case started, and then over the course of the 10 months year that a case is going to be running, then as we're sending those invoices, we have what's called an evergreen retainer, where then we are asking for additional deposits based off of the needs of the case. And our billing department had those conversations with clients so they they are on top of what's going on and understand what you know what's coming up as far as. Work on the case, and also the financial aspect of the case as well. 

Steve Altishin  5:04  
So another question I get is, you know, I've paid them, and what happens to the money? They pay, especially when you haven't done any work yet. So, I mean, it's not like you're taking their money and making it your money right off the bat, right?

Lewis Landerholm  5:23  
I mean, again, it depends on what's happening on the case. You know, a lot of work happens right away. That's why we invoice every two weeks, so that our clients can see what exactly is going on on the case. We keep track of our time. We send those invoices we've over the years, you know, we've gone to at times billing over the course of a month, but clients felt that that was too long. One week would be a lot to, you know, to do billing on a weekly basis. So that's why we've settled on a two week window, so that, you know, our clients have access to the system that we use to keep track of time. They get notifications of the bills that come through, and have the ability to view all of the entries. You know, it's just like getting an invoice from a doctor's office. They itemize everything out what needs to happen on a procedure. Ours is, this is the work that we've been doing since time. Is what we're billing for. Breaks it out into those, you know, those entries based off the amount of time that our staff is working on an individual's case. 

Steve Altishin  6:36  
Yeah, and the retainer itself. What happens if you get a great settlement right away? You know, it works out, not as much of, you know, the normal kind of stuff that can delay a case happens and they don't happen to you. So yon't go through the retainer. It's still their money?

Lewis Landerholm  6:58  
Yeah basically, in the account, it says what has been billed against the deposit, any remaining deposit, once we close out the case, we have to, you know, wait for a short amount of time, month or two, to allow for any potential invoices from say, you know, expenses, things that happen in the case to come to the firm, so that way we can bill it to the file, and then any remaining balance is refunded to the client at the end of that.

Steve Altishin  7:34  
The other big question you always get is, you know, why? Why do you guys do retainers? Why do lawyers do retainers? How does it help me, or how does it help you? But it seems like it helps both parties.

Lewis Landerholm  7:48  
Well, essentially, I mean, I won't get into the history of why retainers came around. I mean, it's been, oh, 50-60, years when they were allowed. Essentially, what it allows us and the client to know is there's a guaranteed amount of work that can continue to happen. And so you know there, as the firm, we're not worried about doing work that is required by the court or required by the opposing counsel or required by client, because we have a deposit that we can draw against, as opposed to working into the negative and then having to collect the money later. It's also easier for clients to manage the financial aspect of a firm when or of their case with us, as you know, they know that they have this balance that's being drawn against, as opposed to, you know, every month or every two weeks being asked for, okay, we did X amount of work. Now we need that payment. Now we did this amount of work, we need this payment. And so, you know, it's the, it's the balance between being able to, you know, just know that everybody's on the same page, that we can do that work and not have to worry about the collection part of of being paid for the work.

Steve Altishin  9:11  
Yeah, and like you said, the client knows that they've they don't have to worry about, well, then they're going to stop working. Because if I don't pay them in, you know, their monthly, you know thing, because the money is there, and it just makes a continuum so that there's it feels like it prevents stoppages of work.

Lewis Landerholm  9:11  
A lot of times, what clients don't always see, or what you know, clients don't always understand, is sometimes the court requires us to do certain things that are outside of our control, outside of clients control, but we we have to do that work, and so we don't always have the ability to say, No, we don't want to prepare that order. We don't want to do this type of work on a case. Because there are factors outside of of our control that forces clients, on behalf of clients, to do the to do that work.

Steve Altishin  10:08  
If the client wondering what's going on, not even what's going on, wondering about what this retainer means. Is this something that's in your agreement with them? 

Lewis Landerholm  10:18  
Yeah it's right in the fee agreement. When people hire us, it outlines how it works and goes through everything. And then also, you know, we have a whole billing department who helps to explain to clients, as we're moving forward as well. And, you know, get their legal team involved with what's coming up, how much work is going to be required. And so it's a, it's a constant communication regarding, you know, that aspect of the case.

Steve Altishin  10:47  
Right, right. And as you kind of said, in a lot of cases, the very beginning is where a large percentage, sometimes of the work happens.

Lewis Landerholm  10:59  
Yeah, the beginning discovery. You know the where people are gathering documents to get the evidence surrounding assets, that's another big chunk. Preparing for mediation, preparing for court, is the is the largest sort of chunk of time. And so, you know, those are the times when the most amount of work is happening in most cases.

Steve Altishin  11:26  
Right. So it can be a case where they, they go through it quickly, one month, and it's so it's not like, well, hold up, where's my money? Because, again, you said, every couple weeks they get everything laid out, right?

Lewis Landerholm  11:44  
Right. Yeah, that definitely can happen. It really just depends on what's required on the case. And there can be, there's definitely ebbs and flows with certain months are busier than other months. And you know, the our attorneys and paralegals are communicating that as much as possible that we can foresee so that clients can expect it, as opposed to, you know, be surprised by the amount of work, but sometimes the work is just required, and so it can be a larger amount of work in certain months for sure.

Steve Altishin  12:21  
Got it. Well, thank you, Lewis. It was really interesting, because it's very much out there. That's sort of a strange word that people kind of understand but don't really kind of understand, and how it actually fits with the fees and costs, what you can actually use it for, and how it fits with your total cost as a whole, as how it kind of manages paying for what is, you know, in a lot of cases, an expensive thing to pay for. 

Lewis Landerholm  12:53  
Yeah, absolutely. And, you know, it's definitely something that we go over during our consultations as well. So during that part of the process, we will go more in depth. And so if somebody schedules a consultation, then we go over the deposit and how it works in more detail as well. 

Steve Altishin  13:15  
Yep, I love it. Well, thank you, Lewis, for sitting down today to talk with us about what a legal retainer is and how they work, and how they kind of benefit everybody, just to keep the case flowing. So I really want to thank you today for talking about this. I think it's important one of those things that people, you know, it's important that they know and not have to worry about that part of the case. 

Lewis Landerholm  13:37  
Yeah, absolutely, anytime.

Steve Altishin  13:41  
You got it. And everyone else, thank you for joining us. If anyone has any further questions, feel free to contact our firm. We can get you connected with an attorney who can help. Until next time, stay safe, stay happy and be well.

Outro:
This has been Modern Family Matters, a legal podcast focusing on providing real answers and direction for individuals and families. Our podcast is sponsored by Pacific Cascade Legal, serving families in Oregon and Washington. If you are in need of legal counsel or have additional questions about a family law matter important to you, please visit our websites at pacificcascadelegal.com or pacificcascadefamilylaw.com. You can also call our headquarters at (503) 227-0200 to schedule a case evaluation with one of our seasoned attorneys. Modern Family Matters, advocating for your better tomorrow and offering legal solutions important to the modern family.