{"id":2365,"date":"2021-04-28T14:15:39","date_gmt":"2021-04-28T14:15:39","guid":{"rendered":"https:\/\/www.oconnorcpafirm.com\/blog\/?p=2365"},"modified":"2021-04-28T14:15:39","modified_gmt":"2021-04-28T14:15:39","slug":"six-hard-donts-for-retainer-agreements","status":"publish","type":"post","link":"https:\/\/www.oconnorcpafirm.com\/blog\/2021\/04\/six-hard-donts-for-retainer-agreements\/","title":{"rendered":"SIX HARD DON\u2019TS FOR RETAINER AGREEMENTS"},"content":{"rendered":"

This article was written by Carolyn Elefant<\/p>\n


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Lawyers have reasonably discretion over what terms to include in a Retainer Agreement depending upon the type of case and applicable ethics rules.  That said, there are some hard don’ts, i.e.<\/em>, terms that you don’t want to ever<\/strong> include.  Here’s a quick sampling:<\/p>\n

1.         Don’t Overpromise<\/strong> – Avoid representations in your Retainer Agreement like “we employ top grade, unbreachable security” or “your case is exceptionally strong.”  These representations create a heightened standard of care that will apply if case goes south and you face a malpractice action. <\/p>\n

2.         Don’t Exceed a Statutory Fee<\/strong> – In some jurisdictions, fees are governed by statute. For example, if your state caps contingency fees to 33 percent pre-lawsuit and your fee agreement charges 50 percent, that’s a huge red flag that can expose you to a grievance or result in forfeiting your fee.  See <\/em> See e.g., In re Flint Water Cases<\/a>, (E.D. Mich. Feb. 18, 2021)(dissolving retainer agreement which among other things contains fees in excess of statutory cap).<\/p>\n

3.         Don’t Prohibit Clients From Filing a Grievance<\/strong> – Any clause in a retainer agreement that overtly prohibits or even disincentivizes clients from grieving an attorney — for example, by charging them $2000 extra if they seek bar mediation of a fee dispute —  is a huge don’t.   See<\/em> http:\/\/archives.starbulletin.com\/2005\/02\/25\/news\/story4.html<\/a> (reporting on disbarred Hawaii  attorney whose fee agreement disincentivized clients from seeking fee dispute resolution).<\/p>\n

4.         Don’t Prohibit Clients From Filing Negative Online Reviews <\/strong>– There’s nothing unethical about requiring clients to agree not to file negative online reviews – but it’s the type of provision that may give clients’ pause.  If you’re worried about clients leaving poor reviews, check out a more proactive way to address the concern in the Client Policy Guide in the ClauseIt.<\/p>\n

5.         Don’t Prohibit Chargebacks<\/strong> – Lawyers believe they’re being clever by requiring clients to agree in the Retainer Agreement not to use chargebacks to their credit card.  Truth is that federal law<\/a> entitles consumers to exercise chargeback rights, at least within a defined time frame and parties can’t contract around it. So if you include a no chargeback clause, you’ll come across as a lawyer who doesn’t know the law.<\/p>\n

6.         Don’t Use Legalese Because You Think It Makes You Seem More Lawyerly<\/strong> – Retainer agreements are construed against the drafter, so if clients claim that they didn’t fully understand what they signed, that’s your bad, not theirs. So cleanse the what for’s and hereto’s from your Retainer Agreement, along with all the verbiage pertaining to billing. Compare this agreement<\/a> that devotes four full pages to discussing every conceivable aspect of fees to this one<\/a> that’s far less verbose.  And run your Retainer Agreement through Readable.com <\/a> which ranks the understandability of your prose.  Bear in mind too that the average American has a reading level of around a 12-14 year old,<\/a> so be prepared for more edits after you run a test.<\/p>\n

            7.         Don’t Rely on That Bar or Vendor Template<\/strong> – <\/strong>This last don’t is a bit meta – but don’t adopt a form Retainer Agreement template from your bar association or created by a vendor without first understanding what not to include. I’ve seen at least one of the don’ts above in a vast majority of the templates I found online.             <\/p>\n

If you enjoyed these Retainer Agreement DON’Ts, but want to learn more about the DO’s of drafting a Retainer, stay tuned for the launch of the Legal ClauseIt: Plug and Play Power Pacts for 21st Century Law Firms. This digital product comes with 30+ sample agreements, from client engagements to closing letters, of counsel and independent contractor agreements and more – all backed by a 90 page guide that offers the business rationale and ethical support for different retainer terms.  To get notice of the product launch, special discounts and 5 free clauses of the day that you can use right away, register here.<\/a><\/p>\n

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Related<\/em><\/h3>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n

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