Retainer Fee

A retainer fee is an advance payment made to secure a professional’s services — commonly used with lawyers, consultants, freelancers, and accountants. It acts as a down payment or deposit that ensures the professional’s availability and covers initial work or expenses. Retainers do not guarantee a specific outcome or represent the total final cost of services.

How retainer fees work

• The client pays the professional in advance.
• The retainer is applied against future work (hourly time, deliverables, or milestones).
• Retainers are typically kept separate from a provider’s personal accounts (for example, in a trust or client account) until the work is earned.
• If services cost less than the retainer, the unused portion is generally refundable according to the agreement and applicable rules.

Common billing methods

• Hourly draw: retainer covers a set number of hours; additional hours are billed separately.
• Flat-fee or milestone: retainer is released in portions when tasks or stages are completed.
• Recurring (monthly) retainer: ongoing access or services for a fixed monthly fee.

Example

A lawyer charges a $500 retainer and $100 per hour.
The $500 covers up to five hours of work.
If the case requires 10 hours, the client pays an additional $500 (total $1,000).
* If the case finishes in three hours, the lawyer refunds the unused $200 unless the contract states otherwise.

Earned vs. unearned retainer

• Unearned retainer: funds held before work begins; belong to the client until services are performed.
• Earned retainer: portion the professional is entitled to as work is completed.
  Professionals may convert retainers to earned fees incrementally (by hours worked or milestones reached). Unused unearned funds should be returned under the terms of the agreement and applicable professional rules.

Typical term and obligations

• Duration varies by contract; retainers commonly cover several months (e.g., six to 12 months) but depend on agreement.
• Professionals often have obligations under industry or legal standards to account for retainers, provide itemized billing, and return unused funds.

Practical tips for clients

• Get a written retainer agreement that defines scope, fee structure, how the retainer is applied, refund terms, and duration.
• Ask whether the retainer will be held in a client/trust account.
• Request regular, itemized invoices so you can track how the retainer is used.
• Clarify what happens if the relationship ends early (refund procedures).
• Check professional or local regulations if you suspect an improper handling of retainer funds.

FAQs

Q: Does a retainer guarantee success?
A: No. It guarantees the professional’s commitment or availability, not a particular outcome.

Q: Can I get retainer money back?
A: Yes — unused portions are generally refundable under the agreement and professional rules. Procedures vary by jurisdiction.

Q: Why do professionals ask for a retainer?
A: To secure availability, cover initial costs, and ensure a commitment from the client.

Bottom line

A retainer fee secures priority access to a professional and provides an advance payment toward future services. Understand the billing method, retain clear terms in writing, and monitor invoices to ensure unused funds are properly handled.