A lawyer retainer usually begins with a written engagement agreement and a payment connected to future legal services or lawyer availability.
For a common advance-fee arrangement, the process is:
The client and lawyer agree on scope and rates.
The client pays an advance deposit.
The funds are handled under the applicable trust-account rules.
The lawyer performs work.
Time and expenses are recorded.
The firm sends an invoice or accounting.
Earned fees are transferred as permitted.
The client may replenish the balance.
Unused funds are handled when the engagement ends.
The exact process depends on the agreement and jurisdiction.
Step 1: Engagement and Conflict Review
Before accepting the matter, the firm may complete:
Area | Related area |
Intake | Conflict review |
Client identity checks | Scope review |
Capacity review | Fee discussion |
Engagement approval |
The retainer does not replace the engagement process.
The agreement should identify:
Client
Lawyer or firm
Matter
Scope
Exclusions
Rates
Deposit
Costs
Invoice frequency
Replenishment
Termination
Refund and dispute process
Step 2: Retainer Payment
The client pays the amount stated in the agreement.
The payment may represent:
Advance fee deposit
Availability retainer
Flat fee paid in advance
Replenishing deposit
Combination permitted by local rules
The firm should record:
Amount
Date
Payment method
Client
Matter
Fee type
Account
Receipt
Responsible person
Step 3: Account Treatment
Under ABA Model Rule 1.15(c), advance legal fees and expenses should be deposited into a client trust account and withdrawn only as fees are earned or expenses incurred.
An availability retainer may be treated differently when it is a valid payment for availability rather than future services.
State and local rules may differ.
The agreement’s label does not override the applicable rules.
Step 4: Legal Work Begins
The lawyer performs authorized work within the agreed scope.
Examples include:
Area | Related area |
Research | Drafting |
Review | Advice |
Negotiation | Client communication |
Court work | Transaction support |
Matter management |
Work outside scope may require:
New authorization
Revised budget
Additional deposit
New engagement
Written change
Step 5: Time and Expenses Are Recorded
For hourly or hybrid engagements, the firm records:
Work date
Timekeeper
Client
Matter
Duration
Description
Rate
Billing status
Task and activity codes
Expenses
Clear records support:
Client understanding
Fee review
Trust transfers
Replenishment requests
Dispute resolution
Matter budgeting
Flat-fee matters may also benefit from internal time records.
Step 6: Invoice or Accounting
The firm may send:
Monthly invoice
Periodic statement
Trust-account accounting
Matter statement
Expense report
Balance notice
The statement may show:
Opening deposit
Fees earned
Expenses
Transfers
New payment
Remaining balance
Amount due
Replenishment required
The format depends on the firm, client, and applicable rules.
Step 7: Earned Fees Are Applied
For an advance deposit, the firm generally applies earned fees after work is performed and recorded.
Under the ABA Model Rules, advance fees are withdrawn from trust only as earned.
The firm should preserve:
Invoice
Time entries
Expense records
Transfer record
Client ledger
Remaining balance
A disagreement over fees may require disputed funds to remain separate until resolved.
Step 8: Replenishment
The agreement may require the client to restore the deposit.
Replenishment may occur:
After every invoice
When the balance falls below a threshold
Before a major matter phase
Monthly
On request
Example:
Required balance: $8,000
Fees applied: $2,500
Remaining balance: $5,500
Replenishment request: $2,500
Step 9: If the Balance Is Exhausted
The agreement may state what happens when funds are depleted.
Possible outcomes include:
Client replenishes
Firm continues and invoices directly
Work is paused where legally and practically permitted
Scope is revised
Lawyer seeks withdrawal where permitted
Payment plan is agreed
A lawyer’s duties and withdrawal rights are governed by professional rules and court requirements, not only the payment clause.
Step 10: Ending the Engagement
The relationship may end because:
Area | Related area |
Matter is complete | Client terminates the lawyer |
Lawyer withdraws | Scope expires |
Stated period ends | Parties agree |
Conflict or other issue arises |
The firm should address:
Final work
Final invoice
Client file
Upcoming deadlines
Client property
Trust balance
Refund
Outstanding amount
Closing communication
ABA Model Rule 1.16(d) requires steps reasonably practicable to protect the client’s interests, including refunding any advance payment of fee or expense that has not been earned or incurred.
Balance Example
Illustrative example:
Item | Amount |
Initial advance deposit | $6,000 |
First invoice | $1,800 |
Remaining deposit | $4,200 |
Replenishment payment | $1,800 |
Restored balance | $6,000 |
Final invoice | $2,400 |
Unused balance after final work | $3,600 |
This example assumes the arrangement and applicable rules permit the described workflow.
It is not a statement about a specific jurisdiction.
Frequently Asked Questions
Does a lawyer take money from the retainer after every task?
Usually the firm applies earned fees according to its invoice and accounting cycle, not necessarily after each individual task.
What happens when the retainer runs low?
The agreement may require replenishment or another payment arrangement.
What happens to unused retainer money?
For an advance fee deposit, unearned funds are generally returned, subject to disputed amounts and applicable rules.
Can a lawyer stop working when the retainer is empty?
Not automatically. The agreement, professional obligations, court rules, client interests, and withdrawal requirements control.
How does MIRA help?
MIRA helps produce reviewed time entries that can support transparent retainer invoices and accountings.
