APPENDIX B
Retainer Agreements
General Comments on Drafting a Retainer Agreement Affecting Matrimonial ClientsPerhaps unfairly, some states require lawyers in matrimonial matters, as
distinguished from lawyers in other areas, to enter into specific form retainer
agreements with clients. When such a requirement exists, no deviance is allowed.
This Sample Retainer Agreement in this Appendix encompasses (with minor
clarifications and adjustments), the regulations promulgated by the Chief Judge
of the New York Court of Appeals as Chief Administrator of the New York State
Court System and the Order amending the Disciplinary Rules of the Lawyer's Code
of Professional Responsibility promulgated for the Appellate Divisions of the
Supreme Court, First, Second, Third and Fourth Judicial Departments. The Sample
Agreement, among other things, provides for fee arbitration at the request of
the client in the event of a fee dispute; explains the law with respect to the
attorney retaining a security interest in a client's property including the
nonforeclosability on the marital residence and provides for furnishing the
client with a copy of a Statement of Client's Rights and Responsibilities. It
additionally provides for the client's right to cancel the Agreement at any
time, provides for the determination of fees and how payment shall be
effectuated in the event of discharge or withdrawal prior to completion of the case. The Retainer Agreement set forth here complies with the New York rules
with respect to the impermissibility of a non-refundable retainer fee, but it
does provide for a "minimum fee" arrangement. Although the Agreement reflects
New York law, it should be considered for use by attorneys in virtually all
states as a guide in preparing a fair arrangement between attorney and client.
Sample Retainer Agreement
THIS AGREEMENT FOR LEGAL SERVICES by and between _____ (Law Firm) and
_____ (Client) entered into the _____ day of _____, 19 __. This Agreement
constitutes a binding legal contract and should be reviewed carefully.
This letter confirms that you have retained this firm as your attorneys to
render services in connection with:
(1) [] to represent you in the pending matrimonial action in the
____ Court, ____ County; (2) [] the prosecution or defense of a divorce action, including the
attempt to negotiate a resolution of the matter;
(3) [] the negotiation, preparation, and/or review of a separation
agreement or other marital settlement agreement;
(4) [] the prosecution or defense of a Family Court proceeding
concerning _______.
It is further understood that:(1) The retainer fee does not include any services rendered in
Appellate Courts or any actions or proceedings other than the action for which
this office has been retained;
(2) With respect to the matter which is specified above, this
Retainer Agreement and any sums paid to this firm pursuant hereto, do not cover
any services relative to any appeal or any other service which might be required
following the entry of a final judgment or order including but not limited to
such matters as enforcement or modification of such final judgment or order. Our
representation shall terminate with the entry of final judgment in your matter,
unless extended by mutual agreement between us in writing.The Client authorizes the Law Firm to take any steps which, in the sole
discretion of the Firm, are deemed necessary or appropriate to protect the
client's interest in the matter. In order for us to begin our representation, you have agreed to pay us and
we have agreed to accept a retainer payment of $_____. This retainer payment
does not necessarily represent the amount of the overall fee which you may incur
by virtue of our services. The amount of the eventual fee will be based upon our
regular schedule of established hourly time charges, along with any out-of-
pocket disbursements (such as court costs, messenger services, transcripts of
proceedings, long distance telephone calls, telefaxes, process service fees,
mileage, deposition and court transcripts, and excess postage) which are
incurred in your behalf. The Client understands that the hourly rates apply to all time expended
relative to the Client's matter, including but not limited to, office meetings
and conferences, telephone calls and conferences either placed by or placed to
the Client, or otherwise made on the Client's behalf or related to the Client's
matter, preparation, review and revision of correspondence, pleadings, motions,
disclosure demands and responses, affidavits and affirmations, or any other
documents, memoranda, or papers relative to the Client's matter, legal research,
court appearances, conferences, file review, preparation time, travel time, and
any other time expended on behalf of or in connection with the Client's matter.
If your matter is concluded, whether by settlement (e.g., a separation
agreement or stipulation of settlement) or by judicial determination, with the
expenditure of fewer hours by the Law Firm than would fully absorb the minimum
fee on a purely mathematical basis, the Law Firm retains the minimum fee
nonetheless. In other words, there would be no refund of any part of the
retainer fee [or the sum of $____, i.e., the "minimum fee" herein] under such
circumstances. An example of how the minimum fee operates is as follows: If the firm
resolves the matter with the expenditure of only four hours of time by a
partner, and six hours of time expended by an associate attorney, there would be
no refund to the client even though the time charges add up to less than the
minimum fee. Notwithstanding the above if the attorney-client relationship is
terminated without your matter having been concluded, e.g., if you and your
spouse were to reconcile and the action was discontinued, or if you were to
discharge the Law Firm as your attorneys, or if the Law Firm were to withdraw
its representations, a fair and reasonable fee would be determined in accordance
with legally accepted standards. Presently, the legally recognized elements of a
reasonable fee, as set forth in the code of Professional Responsibility, are as follows:
€ The fee customarily charged in the locality for similar legal
services.
€ The amount involved and the results obtained.
€ The time limitations imposed by the client or by circumstances.
€ The nature and length of the professional relationship with the
client.
€ The experience, reputation and ability of the lawyer or lawyers
performing the services.
You should know that the Code of Professional Responsibility provides: "A
lawyer shall not enter into an arrangement for, charge or collect ... [a]ny fee
in a domestic relations matter, the payment or amount of which is contingent
upon the securing of a divorce or upon the amount of maintenance, support,
equitable distribution, or property settlement...."The Client has the absolute right to cancel this Retainer Agreement at any
time. Should you exercise this right, you will be charged only the fee expenses
(time charges and disbursements) incurred within that period, and the fair and
reasonable fee would be determined in accordance with legally accepted
standards, with the unearned balance of the retainer fee, if any, being promptly
refunded to you. Presently, the legally recognized elements of reasonable fee,
as set forth in the Code of Professional Responsibility, are as follows:
€ The time and labor required, the novelty and difficult of the
questions involved and the skill requisite to perform the legal services properly. € The likelihood, if apparent or made known to the client, that the
acceptance of the particular employment will preclude other employment by the
lawyer. (You should know that the Law Firm, by accepting retention as your
attorney, is clearly precluded from representing the opposing party against you.) € The fee customarily charged in the locality for similar legal
services. € The amount involved and the results obtained.
€ The time limitations imposed by the client or by circumstances.
€ The nature and length of the professional relationship with the
client.
€ The experience, reputation and ability of the lawyer or lawyers
performing the services. € Whether the fee is fixed or contingent. (You should know that the
code of Professional Responsibility provides: A lawyer shall not enter into an
arrangement for a charge or collect ... [a]ny fee in a domestic relations
matter, the payment or amount of which is contingent upon the securing of a
divorce or upon the maintenance, support, equitable distribution, or property
settlement ...").
You agree to pay the Law Firm such additional fees earned and to reimburse
the Firm for advances on your behalf that may be due from time to time not later
than ten days from the date that the Firm submits a bill to you for same. If an
amount due is not paid within ten days after our statement to you of the amount
due, interest at the prevailing statutory rate as set forth in the Civil
Practice Law and Rules shall be added to the balance due the Law Firm. The retainer fee shall be credited toward an hourly rate of $_____ per
hour for time I personally expend; $_____ per hour for time expended by ______,
a member of the firm; $_____ per hour for time expended by ______, an associate
in this office; $_____ per hour for time expended by ______, an associate of
this office; $_____ per hour for time expended by ______, an associate in this
office; and $_____ per hour for the time expended by paralegals in this office. In addition to the foregoing, your responsibility will include direct
payment or reimbursement to this firm for disbursements advanced on your behalf,
the same to include, but not necessarily be limited to court filing fees,
recording fees, charges of process servers, travel expenses, copying costs,
messenger services, necessary secretarial overtime, transcripts and the
customary fees of stenographers referable to examinations before trial in the
event such examinations are utilized. If the services of an "outside"
stenographer for examinations and/or depositions are necessary, we require $500
deposit for scheduled half day examinations, and $1,000 for the full day. It is
specifically understood and agreed that such payment shall be made prior to
commencing such examination and will be placed in our escrow account. The same
shall apply to all court filing fees. The foregoing are all your responsibility.
Each letter will be billed at a minimum of .25 hour and every telephone
conversation at a minimum of .17 hour. This amount has been arrived at as a
result of calculating the time involved in retrieving the file, and examining
the documents or letters required to dictate the letter or respond to the call,
in addition to the time required to consider the problem arising from or to be
dealt with in the call or letter. As it is not possible to predict with accuracy the period of time of this
firm's representation of you, and for the purpose of providing you with a degree
of certainty with regard to the firm's hourly charges during the period of
representation, the Firm herewith agrees to maintain the foregoing hourly rates
for a period of one year. Thereafter, the firm shall have the right to increase
such rates, but in no event beyond a ten percent per year increase, and such
increase shall be reflected in an amended written retainer agreement signed by
you and the Law Firm. You will be billed periodically generally each month but in no event less
frequently than every sixty days. Included in the billing will be a detailed
explanation of the services rendered, by whom rendered, and the disbursements
incurred by our firm in connection with your matter. Upon receipt of our bill,
you are expected to review the bill and promptly bring to our attention any
objections you may have to the bill. While we strive to keep perfectly accurate
time records, we recognize the possibility of human error, and we shall discuss
with you any objections you raise to our bill. You will not be charged for time
expended in discussing with us any aspect of the bill rendered to you. We shall keep you informed of the status of your case, and agree to
explain the laws pertinent to your situation, the available course of action,
and the attendant risks. We shall notify you promptly of any developments in
your case, including court appearances, and will be available for meetings and
telephone conversations with you at mutually convenient times. We do insist that
appointments be made for personal visits to our offices. Copies of all papers
will be supplied to you as they are prepared (unless you request to the
contrary), and you will be billed a reasonable photocopy charge (at present,
$.25 cents per page) for these materials which will be included in our periodic billing. It is not and has not been our practice to seek security interests from
clients. However, you are advised that the law requires, if we did seek same,
that a security interest take the form of a confession of judgment, promissory
note, or mortgage upon specified property. In either event, a lien would attach
to your property. In the case of your marital residence, any such security
interest would be non-foreclosable, i.e., we would not force a sale of your home
but would be paid at the time you sell the premises. You are advised that any
such security interest can be granted to us only with the permission of the
justice assigned to your case upon an application on notice to the opposing
party and after an application has been made for your spouse to pay the
outstanding fees. However, we want to reiterate, it is not and has not been our
practice to seek security interests from clients. In the event such application for payment of counsel fees by your spouse
and a security interest for the fees due this firm is made to the court, you
agree to cooperate in connection with such application and to consent to the
relief being requested from the court. Failure on your part to so cooperate and
consent shall be deemed as a basis for withdrawal by the Law Firm from your
representation. In the event that any bill from the Law Firm remains unpaid beyond a
thirty day period, you agree that the Law Firm may withdraw its representations,
at the option of the firm. In the event that an action is pending, and absent
your consent, an application must be made to the court for such withdrawal. When
the fee is unpaid for the period set forth above, you acknowledge that in
connection with any such withdrawal application, that the account delinquency
shall be good cause for withdrawal.While we seek to avoid any fee disputes with our clients, and rarely have
such disputes, in the event such a dispute does arise, you are advised that you
have the right, at your election, to seek arbitration to resolve the fee
dispute. In such event, we shall advise you in writing by certified mail that
you have thirty days from receipt of such notice in which to elect to resolve
the dispute by arbitration, and we shall enclose a copy of the arbitration rules
and a form for requesting arbitration. The decision resulting from arbitration
is binding upon both you and this Firm.
Under prevailing law, an application may be made to the court in which
your action is pending, either prior to trail or at the trial, for your spouse
to pay all or part of your legal expenses incurred and/or to be incurred in this
matter. There is no certainty that any such recovery may actually occur, as the
application rests in the discretion of the court. In the event such an award of
fees is made and collected, the amount collected shall be credited to your bill.
At the end of your case (i.e., a final judgment in the matrimonial action) any
amount collected that exceeds your billing will be refunded to you. Conversely,
you shall remain liable for any balance due to us after crediting any amount
collected from your spouse. You have been advised that in order for us to properly protect your
interests, it may be necessary to retain outside experts such as appraisers,
actuaries and accountants. You will be responsible for the costs incurred for
any such service which in some cases may have to be paid in advance depending
upon the requirements of the particular expert. No expert or appraiser shall be
retained without your prior approval. If necessary and applicable, an
application will be made to the court to have your spouse pay all or part of the
aforementioned fees for experts. You understand that no one particular member of the Law Firm is being
retained but, rather, the Law Firm, as an entity, is undertaking your legal
representation pursuant to this Retainer Agreement and that the Law Firm
reserves the right to assign and delegate all aspects of such representation as
the Law Firm, in its sole discretion, deems appropriate. Such assignment and delegation may include, but is not limited to
preparation of pleadings, motions, disclosure demands and responses, settlement
negotiations, preparation of agreements, preparation and conduct of examinations
before trial, court appearances, trial work, and any other matter deemed by the
Law Firm to be appropriately delegated. Likewise, law clerks and paralegals are often called upon to assist in
document production, file organization, preparation and review of financial
statements and data, and such other duties as are assigned by the firm. You acknowledge that you have read this agreement in its entirety, have
had full opportunity to consider its terms, and have had full and satisfactory
explanation of same, and fully understand its terms and agree to such terms. You fully understand and acknowledge that there are no additional or
different terms or agreements other than those expressly set forth in this
written agreement.
You acknowledge that you were provided with and read the Statement of
Client's Rights and Responsibilities, a copy of which is attached to this
Retainer Agreement. We have informed you that pursuant to Court Rule, we are required, as your
attorneys, to certify court papers submitted by you which contain statements of
fact, and specifically to certify that we have no knowledge that the substance
of the submission is false.
Accordingly, you agree to provide us with complete and accurate
information which forms the basis of court papers and to certify in writing to
us, prior to the time the papers are actually submitted to the court, the
accuracy of the court submissions which we prepare on your behalf, and which you
shall review and sign.You are aware of the hazards of litigation and acknowledge that we have
made no guarantees in the disposition of any phase of the matter for which you
have retained this office. If this fee arrangement meets with your approval,
kindly sign your name where indicated on the copy of this letter and return same
to me in the envelope enclosed for your convenience. You acknowledge that
pursuant to Court Rule, a copy of this Retainer Agreement is required to be
filed with the court in which your action is pending.
Very truly yours,
_____________________
[Attorney]
I HAVE READ AND UNDERSTAND
THE ABOVE LETTER,
HAVE RECEIVED A COPY, AND
ACCEPT ALL OF ITS TERMS:
____________________________ [Client]
Provision for the Client to Pay a Bonus to the Attorney or Exception Expertise
and Inventiveness The New York Rules do not provide for any sort of bonus provision.
However, all lawyers, albeit rarely, come across cases in which a relatively
minimal fee is paid, and because of the lawyer's expertise or inventiveness,
they are able to have the client reap huge economic benefits. The following is a
clause that should violate no professional guideline since it merely represents
a recognition that a fair discussion may be had. It places no legal or otherwise
obligation on the client.
Sample Bonus Provision
The above provisions describe your total legal and financial obligation to
this firm. If, however, the results achieved for yourself are vastly
disproportionately greater than the fee paid or to be paid to the firm, you will
be asked to discuss a bonus payment to us based on all appropriate legal
criteria in situations such as this. The foregoing is not a legally enforceable
obligation and shall not constitute a lawful or legal obligation of yourself,
nor a claim by ourselves, but rather represent an acknowledgment that such
payment of a bonus should be discussed as a matter of common fairness and equity.
