RE: OFFTOPIC: Retainer fees?

From: Barbara Lamar (
Date: Thu Apr 26 2001 - 10:02:28 MDT

> Attorney's often charge a retainer fee before they will take on a case.
> As I understand it,
> if the attorney spends fewer hours on the case than expected (say, the
> defendant agrees to settle)
> then the attorney returns the unspent portion of the retainer.
> My question is: how often do attorneys actually return a portion of the
> retainer?

When I was actively practicing law I kept any retainers I received in a
separate trust account. The money would be transferred to the regular
operating account as bills were posted (we generally compiled bills once a
month except for tax returns, which were billed for upon completion and
delivery). When the amount in the trust account fell below a certain level,
the client would be asked to deposit more. I always kept the clients' money
in an interest bearing account, with interest accruing to the benefit of the
client, until IOLTA was passed. IOLTA (Which stands for "Interest on
Lawyers' Trust Accounts") requires interest earned to go to into a fund to
be distributed to foundations that provide legal services to low-income
people. (to see Texas IOLTA's travels through the court system, see and I've always
hated this law. The reasoning by which it's justified as not being an
unconstitutional "taking" is flaky to say the least.)

I always returned any money left over in a client's retainer account. But
I've heard many people complain that lawyers make a point of billing enough
to use up the retainer. No doubt this is true in some cases.


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