Having a lawyer on retainer is a common way for businesses, organizations, and individuals to have quick and direct access to an attorney without having to hire one full-time. Retainer agreements save money because the lawyer on retainer only works when called upon, with the retainer acting as pre-payment for future services.
What Does It Mean to Have a Lawyer on Retainer?
Having a lawyer on retainer is like having a lawyer in-house but only paying them when their services are needed. Generally speaking, the retainer acts as a deposit or lump-sum payment used to pay for the lawyer's services as they are rendered.
The money that the lawyer receives goes into a special client account. As the lawyer performs legal services for their client, the amount of the retainer shrinks, with billings typically occurring at the end of each month.
When the services rendered exceed the retainer, the client receives a bill for the additional cost. And when money is left over, the surplus is usually returned to the client.
Retainer vs. Retainer Agreement: What Is the Difference?
There is a difference between retaining a lawyer and having a lawyer on retainer. When you retain a lawyer, it means that you have contracted an attorney to help you with certain specified legal issues. The money they receive from you is known as a retainer.
On the other hand, when you have a lawyer on retainer, it signifies a long-term relationship with a pay-as-you-go type of arrangement. With a lawyer on retainer, much of the specific work your attorney completes for you may not be known in advance.
Benefits of Having a Lawyer on Retainer
Businesses regularly face legal issues but often cannot afford to retain an attorney full-time. Having an attorney on retainer is a sound business move that brings eight key benefits.
1. Keeping the Business Going
Legal troubles can derail your business and lead to significant financial loss, along with business and personal liability. With an attorney or law firm on retainer, you get a professional who can immediately address any problems that arise during business operations.
2. Lawsuit Protection
Business liability is a danger that all companies face and try to avoid. Having an attorney on retainer can help protect your business from liability through strategic planning and preemptive moves that reduce your company's and your executives' exposure to liability.
3. Guidance on Exit Strategies
Many businesses wisely hire attorneys to help them during their start-up phase. But an attorney on retainer is also essential for exit strategies and can help iron out contract and ownership issues during the sale of a business or when individual members exit the company.
4. Budget Simplicity
Budget problems plague all businesses. Working with a lawyer on a retainer does the opposite of complicating your budget process. With a fixed monthly payment, you get no surprises and can plan more efficiently and effectively regarding legal expenses and expenditures.
5. Networking Advantages
Lawyers are professionals with networks of their own. When you hire an attorney on retainer, you get access to that network, which typically contains a variety of different professionals who can provide solutions to your business needs not provided by your attorney.
6. Management of Paperwork
Paperwork forms the basis of all business transactions. Typically, this paperwork is full of legal jargon and must be completed perfectly for the sake of compliance. Your attorney on retainer can handle the legal aspects of this paperwork and ensure that it conforms to your wishes and legal standards.
7. Legal Representation in Proceedings
You never know when your business must face legal issues. Employees, other businesses, and the government are common sources of legal troubles that businesses can face. With a lawyer on retainer, you can meet legal challenges head-on when they arise.
8. Trusted Legal Guidance
Businesses need legal guidance from time to time. When you hire an attorney on retainer, you get the ear of a professional who is familiar with your operations and who can guide your future moves based on your company's best interests.
What Can a Lawyer on Retainer Do for Your Business?
Companies have enormous legal needs that must be met if they are to grow and thrive. A lawyer on retainer can meet these needs efficiently and in a cost-effective manner.
Review, Draft, and Negotiate Contracts
Contracts govern how businesses relate to one another. They must be precise and take into account the interests of each party. A business contract attorney on retainer can effectively handle all of your contract needs, making sure they are worded as precisely as they need to be.
Protect Intellectual Property
Regardless of the focus of your business, it is likely that you have some sort of intellectual property worth protecting, such as an invention, logos, or trademarks. An attorney on retainer can make sure that your IP assets are protected through guidance, NDAs, and copyright and trademark protections.
Handle Employment Law, Human Resources, and Liability Issues
Businesses are always at risk of running afoul of employment laws. However, an attorney can help your company avoid labor issues with effective planning and guidance. And when unavoidable issues do arise, as they sometimes do, your attorney on retainer can quickly address them in a way that limits your company's liability.
Take Care of Real Estate Transactions
Numerous legal issues arise during real estate transactions. If not handled carefully, your business may suffer losses and may be subject to some form of liability. A lawyer on retainer will help you sidestep legal problems by ensuring that your leases and sales documents are watertight and reflective of your interests.
Apply for Licenses
Many companies, be they small or large, must obtain licenses to conduct business. In most cases, acquiring these licenses can be time-consuming and complex. For example, getting a liquor license can be costly and frustrating. However, with an attorney handling your license matters, you can worry about other aspects of your business operations.
Ensure Regulatory Compliance
All business owners should be concerned about regulatory compliance. However, business owners should not take care of compliance issues themselves. Instead, an attorney should be tasked to handle these concerns, which leaves executives, owners, and managers free to deal with important business operations.
Provide Professional Advice in Terms of Business Acquisition/Sale
If you own or run a company, you may at some point be involved in the acquisition of or sale of a business. Done correctly, an acquisition or sale can help usher a company into a new era. However, sloppy or inexperienced work can lead to business disaster.
With the help and guidance of a small business acquisition/sale lawyer, you will enter into sales and acquisition agreements with confidence and the assurance that your interests are protected.
How Much Does It Cost to Have a Lawyer on Retainer?
How much it costs you to have a lawyer on retainer depends on the type of agreement you need as well as the type of work you foresee needing to be done. Additionally, the experience, expertise, and reputation of the attorney you hire play a big role in the cost of retaining them.
Generally speaking, a retainer fee agreement can potentially require as little as $500 or as much as $5,000 or more in retainer fees. Often, the initial fee requested may not cover the entire cost of the services the lawyer will eventually provide. In other words, the retainer fee is often like a down payment for services to be rendered.
If you are looking to have an attorney handle a specific case or issue, you can expect the lawyer retainer fee to usually be based on the lawyer's hourly rate times the number of hours likely required to complete the job.
How to Hire a Lawyer on Retainer
When it's time to hire an attorney on retainer, there are certain steps you must take to ensure that the process goes smoothly and that you have a fruitful working relationship with the lawyer. Neglecting to follow one or more of these steps can open the relationship up to future problems that can negatively affect your business operations.
- Stipulate the Scope of Work and Fees: Make sure to explicitly stipulate the scope of the attorney's duties and the corresponding legal fees they may charge for the work. Detail exactly how the attorney will work from the retainer, such as when the attorney can bill for services rendered, as well as situations when the attorney may request more funds to replenish the retainer account. Leave nothing up for interpretation so that you and your attorney are clear on what is expected of you both.
- Have a Clear Written Representation Agreement: Work with your attorney to make sure that every aspect of the retainer agreement is clearly represented in writing. Make certain that no ambiguities exist in the contract language and that nothing is left out or left to chance. In addition to the scope of work and retainer fee amounts, don't forget the terms revolving around the resolution of disputes that may arise between you and your attorney in the future. The more you cover in a clearly written agreement, the smoother your relationship with your attorney will be.
- Check the Work Billed: Once the agreement is in place and your attorney begins rendering legal services, you'll want to regularly check the work being billed against the transfers being made from the retainer account. The work being done should perfectly match up with the amount being transferred from the trust account (retainer account) into the lawyer's personal or business account.
According to the professional rules of conduct and any terms you've agreed upon, the lawyer should send you a letter at least once a month that includes a detailed breakdown of the work they've done and precisely how this work corresponds to the billings that have been carried out.
Discuss Your Legal Needs with a Skilled Buffalo Business Lawyer Today!
Having a lawyer on retainer will help your business thrive and protect you from legal surprises that plague all businesses. And by hiring a lawyer on a retainer basis, you will save money by only using the lawyer's services when you need them.
If you need high-quality legal services, turn to Lawyer For Business. We are seasoned Buffalo business lawyers ready to help make your business goals. Contact us today.
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