Legal & IP
Definition
A retainer fee is an upfront payment made to a professional — most commonly an attorney or consultant — to secure their availability and future services. The retainer is typically held in a trust account and drawn against as work is performed.
Retainer agreements take two primary forms. A classic retainer (also called a 'true retainer') is a fee paid simply to guarantee the professional's availability — the client secures priority access and the professional reserves capacity. A security retainer (the more common type) is an advance deposit against which the professional bills as they work — when the retainer is depleted, the client replenishes it. Some professionals charge a flat monthly retainer in exchange for a defined scope of ongoing services. For attorneys, retainer funds must typically be held in a client trust account (IOLTA account) and can only be transferred to the attorney as services are rendered and invoiced. Retainers differ from project fees (fixed price for a defined deliverable) and hourly billing (billed only for actual time). Retainers are most common for attorneys, consultants, and PR agencies on ongoing engagements.
Understanding retainer arrangements prevents billing surprises and protects your interests. Before signing a retainer agreement, confirm: what happens to unused funds, whether the retainer is refundable, what work is covered, and how often you will receive billing statements. An advisor can help you evaluate whether a retainer or hourly arrangement is more cost-effective for your situation.