Clients used to pay lawyers retainer fees even while they were not using them

“Under more traditional relationships, firms have to pay lawyers retaining fees while they are not using them.” This astonishing glimpse into the past comes from Reactions, May 2004 at 3. The retainer fee actually reserved the right to use the law firm even if there was not a need for the firm during the period of the retainer. If at one time this was a customary relationship between clients and law firms, it casts a different light on the meaning of the term “retainer” (See my postsof Oct.30, 2006 for speculation on the difference between “retain,” “engage,” and “hire”; of Aug. 26, 2005 about yawns from law departments on retainers paid quarterly in advance; and of Oct. 14, 2005 on retainers and prompt payment.).).

The article contrasts retainer arrangements with what it terms “outsourcing arrangements,” whereby companies only pay for a lawyer’s services when they need them.

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