I worked as administrative staff in a law firm a million years ago. Real estate mostly.
We had a couple of big clients who had retainer arrangements with specific attorneys on our staff. They paid a big lump sum in advance, and then they just freely called the attorney as needed. When work was busy, they paid into that fund on a regular monthly basis. In slower times, they just topped it up when the balance fell below some agreed threshold. The attorneys billed their time against it.
It was similar to requiring a deposit on a big complex case, but open ended.
The idea was, if you have lots of varying needs on a semi regular basis, you don’t want to make arrangements on every question, you just pay into a general fund so the attorney will be available for you whenever something comes up.
My understanding has always been that you have an attorney whom you pay on a regular, ongoing basis to handle various legal matters for you. They are already “your attorney.” By comparison, if you don’t usually work with an attorney, and suddenly need one, you’d probably be paying them for a particular project or case, not on an open-ended basis.
I work in advertising, and our relationships with clients work similarly. Bigger clients hire us “on retainer,” and we have ongoing contracts with them, in which they pay the agency a certain amount per month for that ongoing relationship. Other (typically smaller) clients may hire us on a “project” basis, in which we are paid an agreed-upon amount for a specific project or task, and then, once that is completed, we no longer have a working relationship with the client.
In means you’re paying an amount to your lawyer on a regular basis which will count towards legal fees that the lawyer will do for you as soon as that happens. Kind of like a recurring advance payment to maintain an ongoing business relationship with a lawyer who works for you periodically.
They might still ask for an advance if the work you’re hiring them to do is likely going to be more expensive than the credit you have from retainer fees already paid. The important thing is that the retainer is not (although it might sometimes look like it in films) a flat-fee arrangement whereby you pay a periodic amount to the firm, in return for which the firm will do any work you’re throwing at them. They’ll still bill you for the work they do as soon as a specific project arises; it’s just that you keep pre-paid credit on account with the firm to make them keep themselves available for you.
That would likely entirely depend on the terms of the retainer contract; I have a hard time imagining a situation in which a law firm of any real size would be “on retainer” with a client, and not have a contract in place.
Is this practice due in part to the fact that attorneys have much stricter rules on conflict of interest than other services?
One of the plot points in The Sopranos was that after they first separated, Tony engaged every matrimonial attorney in the area so that Carmela could not find an attorney who was not “conflicted out”. I’m not exactly sure if it’s correct to say that he would need to put them on retainer to do this? Perhaps just one initial interview would be sufficient?
A solicitor-client relationship can be created without a financial commitment or a formal retainer. If a person gives info to the lawyer, seeking legal advice, and the lawyer gives legal advice, that can be enough to create a solicitor-client relationship.
So Tony in that case may have been forming a solicitor-client relationship in each case, and if he gave confidential information of some sort, then that could trigger a conflict of interest if she subsequently contacted that lawyer, even if Tony never paid a dime for that “free initial consultation”.
Sometimes you only have a retainer at the beginning of the case and they bill you after that. For example, if you are doing something like settling an estate, the attorney may require a retainer of $X up front to get started on your case. Once the attorney has used up that initial $X, they will then bill you for whatever they do. You don’t necessarily have to top off the retainer on an ongoing basis. You just pay your monthly bills. If you don’t pay the monthly bills, then I would expect the attorney to require an up-front retainer to continue working for you.
If you actually have an attorney on retainer on a regular basis, then the expectation is that they are doing work for you on a regular basis. You are kind of paying that $X for a certain amount of work every month. The attorney would likely put your request ahead of other, non-retainer clients because they want to ensure you keep paying into your retainer. If the attorney wasn’t responsive to your requests, you would probably take your business and retainer to a different attorney. The retainer establishes your relationship with that attorney and to have your requests be of a high priority.
The benefit of the arrangement is that the law firm gets the steadier income stream, and does not waste money in pricing and bidding to win work, which can easily be 20% of overhead or higher. The client gets the expectation that the firm will allocate suitable resources and be available on call or even proactive.
Although its probably not going to be a contractual condition, both sides would expect that once an agreement is in place the client will not be ringing around competitors looking for a better price, at least for routine stuff. And if there is a lot of routine contractual legal work [document review, approval lodgement etc] then you can set up a workflow where the legal resource almost acts like they are in your office, and the process of sending paperwork is seamless.
Lots of replies answering the question. I’d add (and echo) what Jimmy_Chitwood said, and it goes along with the Sopranos situation (hiring a bunch of attorneys to prevent your wife from using them). Basically, guaranteed access to the attorney.
The “rich guy”, by pre-engaging and retaining the services of an attorney, will be guaranteed to have their services when the time comes. Without doing that, if rich guys want to go get an attorney to handle his situation, that attorney will need to a “conflicts” check to make sure the attorney has no interest in the opposing party of rich guy. If the attorney does have a conflict (ie, he represents opposing party, or something similar where attorney could not be impartial) then that attorney cannot ethically represent rich guy and must decline. That’s no good, especially if it’s a good attorney. Plus, that can take time along with the administrative stuff that goes along with hiring an attorney.
For the “rich guy” scenario proposed in OP, it’s having a guaranteed good attorney of your choosing that is able and will represent you…right now.