A retainer agreement establishes an ongoing professional relationship where the client pays a regular fee for access to services. Retainers are common in legal, consulting, accounting, and advisory services.
Types of Retainers
General Retainer (Access Retainer)
- Client pays a fixed fee for availability and access
- Fee is earned when paid — not deposited in trust
- Guarantees priority access to the professional's time
- Common for: general counsel arrangements, advisory relationships
Special Retainer (Security Retainer)
- Advance payment deposited in trust
- Drawn down as services are performed
- Unearned portion is refundable
- Common for: litigation, transactional work
Evergreen Retainer
- Trust retainer that replenishes automatically
- Client replenishes when balance drops below threshold
- Ensures continuous availability of funds
- Common for: ongoing litigation with variable activity
Key Retainer Agreement Terms
Scope of Services
- What services are included
- What falls outside the retainer
- How out-of-scope work is handled
- Escalation and approval processes
Financial Terms
- Retainer amount and payment schedule
- Hourly rates for work within/outside retainer
- Expense handling
- True-up provisions
Duration and Termination
- Term length (monthly, quarterly, annual)
- Renewal provisions
- Termination notice requirements
- Refund of unused funds
Benefits of Retainer Arrangements
For Service Providers
- Revenue predictability: Recurring income smooths cash flow
- Client commitment: Retainers signal a serious relationship
- Planning: Predictable workload aids resource management
- Reduced sales effort: Less need for continuous business development
For Clients
- Priority access: Guaranteed availability when needed
- Cost management: Predictable professional services spend
- Relationship depth: Provider develops deep knowledge of client's business
- Budget certainty: Fixed costs are easier to forecast
Best Practices
- Define scope clearly: Ambiguity leads to disputes
- Review regularly: Adjust retainer amount based on actual usage
- Track utilization: Ensure clients are getting value
- Document everything: Maintain records of all work performed
- Communicate proactively: Update clients on retainer utilization