The Firm’s Policy On Retainers

Clients     |     Goals in Client Relationship    |    Expectations of Client    |    Firm Billing Policy

Billing Policy    |    Retainer Policy    |    Invoices

As a law firm committed to being a relationship law firm, the Firm’s creation of its retainer concept was the Firm’s attempt to:

  1. Help insure that its clients, whether larger, smaller, rapidly growing, cash flow strapped, struggling, etc. receive the professional services the Client needed without deviating from the Client’s budget or ability to pay for those services.
  2. Make the appropriate investment in the Client’s growth, future or turnaround.
  3. Eliminate any budget uncertainty or risk from the Client’s use and need for the Firm’s professional services.

The following are the policies and mechanics for the Firm’s annual retainer concept:

  1. The Client decides whether the retainer concept is in its best interest.
  2. The Client decides what the amount of the retainer will be, not the Firm.
  3. The Client sets the retainer by January 15th of each year for the entire calendar year.
  4. By January 15th of each year, the Firm suggests for the Client’s evaluation and decision what the Firm feels the minimum amount of the retainer should be and what the maximum amount of the retainer should be for the coming year.  The amount decided by the Client may or may not have any relation to the Firm’s suggestions.
  5. The amount set by the Client for the retainer can be paid quarterly or monthly.
  6. The Client automatically pays the retainer without invoice from or reminder by the Firm. The retainer concept is intended to be paperless and without administration for the Firm.
  7. The Client shall pay all retainers in advance and to the Firm by the first day of each month or quarter.  For example, the Client should make sure the retainer for February is received by the Firm prior to February 1st.
  8. The Firm will not change the amount of the retainer during the year.
  9. The retainer covers all “non-project” work.  Typically and historically, “non-project” work includes the day-to-day routine issues facing the Client, exclusive of litigation, material transactions, and major matters.  The Client knows from previous years what work became “project” work for its perspective for the coming year.
  10. A matter can only be “project” work if the Firm notifies the Client.  The Client will then select a billing method from those methods described in the Firm’s Billing Policy.
  11. The Firm attempts each calendar quarter to send the Client a report on the retainer and the Firm’s services for that quarter.  The report includes what the “SUGGESTED VALUE OF SERVICES” would have been but for the retainer arrangement.  The report also includes the annual and quarterly history of the retainer arrangement with the Client.
  12. By January 15th of each year, the Firm will deliver a summary of the information described in the previous paragraph for the previous year.
  13. Factors that the Firm has historically factored into its suggestion of the maximum/minimum amounts for the retainer have included:  the information described in no. 11, whether the financial condition of the Client is unsatisfactory, whether the compensation of the owner and management team is depressed, whether the Client’s cash flow is stretched, the Client’s capital needs for the short to intermediate term, the effect of any retainer on the Client making the necessary investments in its future, the sense of any disproportion adverse to the Client between the Client’s profits and the retainer, the sense of any disproportion adverse to the Client between the compensation of the owners and management team and the retainer, and the Firm philosophies and policies expressed in each of the following Firm materials – “The Firm’s Goals In Each Client Relationship” and “The Firm Billing Policy.”
  14. The retainer does not include extraordinary disbursements.  The Firm Billing Policy in Paragraph 4 describes extraordinary disbursements. Many, if not most, of these kinds of disbursements only arise in “project” work as discussed in Paragraph 9 above.  But sometimes they occur in “non-project” work in the form of filing fees to form legal entities or to register securities, title services, obtaining certified copies of publicly recorded documents, etc.