RETAINER AGREEMENTS AND HOW THEY WORK IN DIVORCE ACTIONS
When you get divorced, more than likely state law will require that you and your divorce lawyer sign a “retainer agreement.” So before you head off to court and give your witty sound bites to the news reporters lurking on the court house steps, ask yourself, what is the retainer agreement and what I should know about it?
The retainer agreement is a contract or agreement between you and your divorce lawyer that details the work your attorney will do on your behalf to get you divorced according to your wishes, and on the terms you want. That is not to say that by signing a retainer agreement that you will get everything you want by osmosis. But the idea is that the retainer agreement delineates how your attorney will go about attempting to get you what you want in your divorce action.
In New York and most other if not all other states in the Union, a retainer agreement in matrimonial actions is a requirement. Failure to execute one and provide a client with a Statement of Clients Rights and Responsibilities could preclude an attorney from getting paid one dime in the divorce action. It is a very serious infraction. As a matter of fact, here in New York, an attorney is required to file the retainer agreement with the court along with the client's statement of Net Worth at the very beginning of the case, so that the court can assess whether or not the attorney's fees and terms comply with state law and mandates.
It doesn’t matter if the divorce is contested or uncontested. A divorce attorney is required to have a retainer agreement for ANY matrimonial action that he or she handles because guess what? A lot of uncontested divorces, so called uncontested divorces, actually turn out to be contested. And the attorney is required to have the terms of such an eventuality spelled out for the client at the beginning of the case or risk not getting paid if the thing turns ugly.
Retainer agreements in a matrimonial action cannot be oral.
Retainer agreements cannot be based on a “non-refundable” provision in the agreement. In other words, if the attorney is discharged he or she MUST return unearned fees.
Retainer agreements cannot be contingent on the securing a divorce or upon the amount of alimony or maintenance the attorney wins for you.
Retainer agreements may, under certain circumstances, include a “bonus” provision but that would have to be voluntarily entered into by the client and not contingent on the amount of maintenance and property received by the client.
An divorce lawyer cannot charge an “excessive fee” in his or her retainer agreement. So, for example, $700 per hour might be deemed an excessive fee for most attorneys. But $250 per hour will not be deemed excessive for any attorney practicing today. But it depends. The test is one of reasonableness. Arguably, someone like Tiger Woods could easily afford to pay a high powered divorce attorney $700 per hour or even $1,000 per hour to handle his divorce case. And that would not be considered excessive. But a regular lay person going to a regular attorney for a divorce action would not reasonably be held to a $700 per hour fee in most jurisdictions.
HERE IS A LIST OF ITEMS THAT MUST BE COVERED IN YOUR RETAINER AGREEMENT:
1. Names and addresses of the attorney and client.
2. The hourly fee/rate
3. Amount of any advance retainer and what it covers.
4. Whether the agreement covers appeals, family court proceedings or any other proceedings in addition to the divorce action.
5. the right of the client to fire the attorney at any time or to seek other counsel at any time.
6. Whether the attorney would require an additional retainer for trial or not.
7. Frequency of itemized billing.
8.under what circumstances the lawyer may seek to withdraw from the case and the attorney’s right to seek a charging lien.
9. Client’s right to be kept abreast of the case and receive correspondences if requested.
10. all other pertinent terms and conditions.
WHAT IS A CHARGING LIEN vs. WHAT IS A RETAINING LIEN
The retainer agreement should delineate what circumstances an attorney can seek a charging lien or a retaining lien. You may wonder what the heck is that? A retaining lien is basically when you fire the lawyer or the lawyer withdraws for cause and they can, by motion, request that the court place a charging lien on the judgment. So at the time the divorce is adjudicated and a judgment of divorce is rendered, the court would include a clause in the judgment (a charging lien) about the amount of money the attorney would be paid for services rendered, even if he or she had withdrawn or was released prior to the completion of the case. With respect to the retaining lien, the attorney can retain the file until he or she is paid the outstanding balance by the client. Both types of lien require a hearing. And the retainer should contain provisions of when both of these types of liens would apply. These liens are called “security interests” in your divorce action.
One way of getting out of the retaining lien is to claim indigence or some other “exigent circumstance.” But if the attorney is able to show that you are so indigent yet you have paid another retainer to another attorney, then it defeats your defense of indigence and the retaining lien would stand until you paid pursuant to the retainer agreement.