“Retainer scheme is a personal, economical, and practical solution to your constant legal needs.”
A general retainer agreement can be defined as an agreement between attorney and client in which the client agrees to pay a fixed sum to the attorney in exchange for the attorney’s promise to be available to perform, at an agreed price, any legal services that arise during a specified period. It is in the form of an option agreement. Since the general retainer fee is given in exchange for availability, it is a charge separate from fees incurred for services actually performed.1 In practice, a retainer agreement encompasses the promise of the attorney, or a law firm, to provide legal services in the forms of legal due diligence and legal opinion.
Despite the demarcation between the different legal needs, a retainer agreement is proven beneficial to all types of clients. For said category, the retained attorney serves as a guide to assist the client in facing various legal issues related to the business. By contrast, for a corporate client, a retained attorney provides a fortification of the support by its in-house counsels. A law firm of considerable qualifications are reliable for a more thorough legal service and thus the credibility of which must not be undermined.
Retainer Agreement Keeps the Client Updated
Retainer Agreement Allows Clients to Gain Comprehensive Insights
Retainer Agreement is Customizable
A retainer scheme derives from an agreement between the attorney and the client. Therefore, any provisions contained therein are subject to negotiations beforehand. Clients are able to personalize the terms of the engagement during the preemployment period leading up to the agreement. The retainer agreement commonly determines the scope of work in the form of billable hours. This means that the client agrees to pay the attorney’s fees on an hourly basis. Usually, a retainer agreement puts a cap on the maximum amount of the billable hours for a fixed price, e.g. xxx hours per month for the price of xxx. Any billable hours exercised beyond the maximum amount would be deemed excess hours, and thus would be subject to an additional charge.
However, the client can easily circumvent this possibility by estimating the amount of legal services he or she might require within the retainer period. In the event the client is aware that he or she is in a fragile position thus needing a lot of legal advices, the client is encouraged to propose his or her own limit of the billable hours. On the other hand, in the event the client is certain that he or she is in a more secure position, he or she may negotiate for a smaller number of billable hours.
Furthermore, it is common for both parties to conduct an annual evaluation prior to every renewal of the retainer period. In the event the client is unsatisfied with the current terms regarding the maximum number of billable hours, the client is encouraged to revisit the agreement and propose a modification if needs be. Ultimately, a retainer agreement is patently flexible as the client is always able to personalize the terms contained therein; be it prior to the engagement or afterwards. A retainer agreement caters the needs of the clients in a personal way based on his or her preference.
Retainer Agreement Conduces A Long-standing Relationship between Both Parties
Retainer Agreement Provide Effective and Timely Solutions
1 Lester Brickman and Lawrence A. Cunningham, Nonrefundable Retainers: Impermissible Under Fiduciary, Statutory and Contract Law, 57 Fordham L. Rev. 149 (1988), https://ir.lawnet.fordham.edu/flr/vol57/iss2/1, pg. 157 – 158.
Author: Yohana Veronica Tanjung
Gaffar & Co. is an Indonesian Boutique Law Firm that focused on Commercial law Area includes Dispute Resolution and Investment regulatory.
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