Hiring an attorney can be among the most valuable and worthwhile investments when it comes to dealing with a marital dissolution, last will & testament, or other complex legal matter. Pursuing a legal matter such as a divorce or a complicated estate planning issue on a solo basis is generally something to avoid. There are many reasons as to why this is the case, but chief among the reasons is the fact that these matters are typically highly complicated. Divorce cases, for example, can rapidly become very complicated, especially when there are children and heavy assets involved. If you have a substantial portfolio involved in a divorce, you may need to consult with outside professionals, such as CPAs or financial advisors; having an attorney in these circumstances can be very important, as an attorney can make recommendations and also interface directly with these other experts.
When you hire an attorney, inevitably you will have to work out a fee arrangement. Private attorneys are working professionals, and as such they must sort out exactly how they will be compensated for their services. In this post, we will go over some of the important terms and concepts involved in developing a fee arrangement with your attorney.
Retainers & Trust Replenishment
One of the core concepts when it comes to attorneys and fee arrangements is the “retainer.” When an attorney takes on a case, very often that attorney won’t have an exact idea about how many professional hours that case will demand. Consequently, attorneys will require that a client make a deposit of a certain amount, and this amount will cover a certain number of professional hours. Essentially, this allows the attorney to get started on the case even though the full total of the attorney’s services is unknown; the deposit, or retainer, creates a contractual relationship between the attorney and client, and builds trust such that the attorney has faith that, in the event the retainer money is depleted, the client will ultimately settle whatever balance remains.
Retainer funds are deposited into a unique client “trust account.” Usually, when retainer funds reach a certain amount – say $1,000 or $500 – the attorney will require an additional deposit. This is referred to as “trust replenishment” as the client is simply building up additional resources to secure more professional time from the attorney. Of course, everything ultimately depends on the exact details of the retainer agreement established between the attorney and the client. In some cases, for example, an attorney might be willing to allow the trust account to reach a zero balance; this might occur when the attorney has full faith, for whatever reason, that the client will settle the balance at the end of the case.
Retainer Agreements & Fee Structures
When you engage an attorney and pay retainer money, you will also sign a retainer agreement. The retainer agreement includes all the details regarding not only the initial retainer but also the fee structure moving forward. So, the agreement will include the attorney’s hourly rate, percentage of any settlements, requirements regarding minimum trust account balances, and so forth. This agreement can be as responsive to a given situation as is needed; there is no reason why an attorney needs to stick to a certain formula. So, for example, the attorney might require a retainer to cover certain professional time to start, but then move to a contingency fee structure after those funds have been used. Again, everything depends on the particular retainer agreement of a given case.
Contact the Murphy Law Firm for More Information
If readers would like to know more about retainers, retainer agreements, trust replenishment, or another related topic, contact one of the family law attorneys at the Murphy Law Firm today by calling 240-219-5243.