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Sunday, April 5, 2020

How your lawyer's retainer works

I've received two separate questions regarding retainers paid to lawyers, so I thought I'd answer them together. Most people have heard of having lawyers "on retainer". If you watch TV, you will likely have formed the impression that giving a lawyer a retainer means you have them on speed-dial and if you ever happen to need them, they'll drop everything and show up immediately to save you. Well, the reality is not nearly as exciting.

When you give a lawyer a retainer, it is for a specific matter or problem. You don't just give us money in case one day you need legal advice. That would be nice for us, to be given free money for nothing, but who would ever really do that?

Not all lawyers ask for retainers for all work. When we do ask for a retainer, it is for three reasons. One is that it makes the file easier to move quickly if we have money to pay for things like court fees, couriers, surveyors, searches, etc along the way. Rather than wait for the client to pay for each thing as we go, we use the retainer funds to pay the client's costs and keep things moving.

The second reason is that we want to be paid. Unlike a mechanic who can keep your car if you don't pay the bill, we can't ask a court to hold off on a judgment while we collect from our client. Once we do the work, it's out there. 

The third reason is that clients really do not appreciate getting a big bill for a year's work and being expected to pay it all at once. Many of us would find it difficult to pay $5,000 or $10,000 all in one shot. When you pay a retainer, you can put down part of the money, the lawyer can start the work, and you can add to the retainer as funds become available.

The two questions I mentioned are below:

1.  "It's going on one year & still no copy of the Will from the executor. Am I paying retainer for this time waiting? I want to be careful about paying for no results."

When you have a lawyer on retainer, you don't pay them to "wait". It's not like a taxi where the meter keeps running even if you're sitting still in traffic. The lawyer can only bill you for work that he or she does, and use the retainer funds to pay those bills. If they are not doing anything but waiting, then of course you are not paying them. On the other hand, if they are calling the probate court, doing searches, or corresponding with the executor's lawyer to try to find out something, then you'll pay for their time.

Law Society rules require lawyers to produce invoices for the clients and to ensure those invoices are sent out before retainer funds are used to pay the bill. Even so, you are entitled to call or email the lawyer's office at any time to ask for an accounting of your retainer funds.

2. "I have paid a retainer to a lawyer. But what's in future for the lawyer? Can he pay the rent on office? Will he go bankrupt?"

I read question #2 in the context of the COVID-19 pandemic. I can see clients worrying about lawyers going out of business just as you'd worry about lots of other businesses right now.

I can tell you that in my province, all the lawyers in private practice are still working and are still busy. Everyone has modified their ways of doing things to allow for social distancing, but we're all managing.

It sounds as if you're worried that the lawyer will go out of business and you'll lose your retainer. However, the money you give as a retainer does not go into the lawyer's bank account to be used for his general expenses. It goes into a trust account and can only be used on your behalf or to pay the bills he charges to you. We have very strict rules about use of trust funds.

It's possible that the lawyer might have financial troubles and decide to keep your money inappropriately. It does happen from time to time. But that would only happen if the lawyer never plans to practice law again because he would be disbarred. Like I said it happens, but it surely doesn't happen very often.

I hope these comments help everyone understand a little more clearly how lawyer's trust accounts work.


5 comments:

  1. We paid a lawyer to fight our removal in court. He never even put a defense in. This a year later the judge notifies us. It was also on the day he quit as we would not quit our trustee jobs. LSUC of Ontario did nothing. They said we didn't listen to home. Also adding he wanted another 5000 so we were in the wrong. Since we were still in court regarding the initial court proceeding he took us to court. We couldn't attend so he won. Just informed me I'm not getting any inheritance. This is news to me. Also said estate has been settled. So he took a lien out against my house.
    I have yet to find a lawyer who follows the rules of law. Small town. The judge in my proceeding called me reprehensible. Then gave me a dissertation on the defense lawyers background.

    ReplyDelete
    Replies
    1. I think what you mean in your comment is that the lawyer advised you it would be best for you to withdraw as trustee, you refused, the lawyer quit, and the case went on. Why would the LSUC do anything about that? Our Code of Conduct allows us to fire clients who do what is against our advice.

      What you should have done, IMO, is get a second opinion from another lawyer. Either you'd hear the same advice again - in which case you should probably follow it - or you'd find someone who agreed with your case and would be happy to work on it with you.

      When I hear someone say "I have yet to find a lawyer who follows the rules of law", I know one thing for absolutely sure. The person speaking does not know the rules of law.

      Lynne

      Delete
  2. I was at the LSUC for exactly 10 this 2017. I jumped through hoops. It was because of another lawyer. Finally go to tribunal. Guy walked off with over 20000.00 he never paid OHIP dating back to 2004. Took years before they would acknowledge anything. He was found guilty regarding other people also.
    Top it all off the head of tribunal said I should get everything with interest.
    LSUC lawyer says it is out of jurisdiction.
    When I call back I am told by Scott's assistant take him to LSUC.
    I have learned a lot over the 10 years from various lawyers. Novak cannot practice anymore.
    It was terrible how LSUC acted.
    I have a lot of items but one that sticks out most is when he closed his practice. I let LSUC know. They tell me that they cannot do anything until he notifies them.
    So much for following their own rules letting clients know you are closing up.
    One of the first people I talked to for over a year at thebeginning told me to write the test that was being dropped so I could apply for law school without going to university.
    I have all the information.
    So I do know that I have yet to find a lawyer that follows the rules.
    I could tell you stories of other lawyer misconduct but it would take too long to write.
    Thank 5

    ReplyDelete
    Replies
    1. Well, you take the moral high road if that helps you. We'll have to agree to disagree on this one. During my 35 years at the bar, I've met some scuzzy people - some clients, some lawyers - but my overall experience has been this. An honest, decent person who happens to be a lawyer will be an honest, decent lawyer. And we are by far the majority.

      I can't even tell you how many times a client has asked me to do something shady or underhanded and has been furious at my refusal. So mind the company you keep.

      It's too bad your experience was so awful.

      Lynne

      Delete
  3. Yes I agree I also know very honest lawyers.
    But my experience has been with the not so honest. I'm 67 and had the displeasure of the ones I had. So my experience was maybe not what you yourself would ever encounter.
    Those honest upright lawyers I speak of are the ones who looked at what happened to me. After realizing it was true reconsidered their ways of thinking.
    If you had even considered the misconduct of the lawyer and the LSUC. Every lawyer knows there is no fear in being reported to the LSUC.
    Especially when they say report me.
    Oh and that original lawyer I spoke of waited until 2 days before court and pleaded with trustees to quit. One year later judge says no defense submitted. Took my money saying we had a good case.
    So you are right there are good lawyers but I have yet to get one.

    ReplyDelete

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