By its very definition, a legal retainer is a contract with a lawyer who is hired for compensation over an extended period of time, in exchange for access by the client who can continuously ask for legal advice without being repeateadly charged. The defining trait is having access to a lawyer who is familiar with the client and any previous incidents that might affect current circumstances.
While a legal retainer is often associated with a business, it can also be formed with individuals or families who may find a need to have a lawyer whom they can easily reach out to for important decisions or matters.
Going back to the definition, the following is a breakdown of the important concepts:
1) A contract
As a contract, a lawyer and the client stipulate the scope and extent of the legal retainer.
The most basic form of a legal retainer involves continued access to the lawyer for legal consultation via phonecall, SMS, or email.
Vaue-added services may be stipulated, such as the preparation of legal documents, review of basic contracts, evaluation of company policies, attendance during in-person meetings, holding of company positions, representation in cases, and so on.
2) For compensation
The consideration for the contract is often monetary payment.
As earlier discussed, a legal retainer may be customized depending on the stipulations agreed upon. Evidently, a basic retainer with only legal consultation will have a different price compared to a legal retainer with value-added services, such as preparation of legal documents and review of basic contracts.
Depending on the stipulations between the lawyer and the client, there are cases when the consideration is in part an exchange deal (i.e. ex-deal). In this case, the client pays in part through an exchange of something that has value to the lawyer.
3) Extended Period
The duration of a legal retainer is also subject to stipulation.
The period may depend on the requirements of the engagement. For businesses, the retainer is often for a period of one to two years. For individuals or families, the duration is often longer depending on the nature of the engagement, such as in maintenance of a last will, legal guardianship, and other personal or family matters.
At its core, a legal retainership is about the client having access to a lawyer.
Clients cannot simply call and ask a non-retainer lawyer. They are likely to be scheduled for legal consultation at the lawyer’s office, and at a mutually acceptable date and time. It is primarily for this reason why clients get a legal retainer so they can have access to a lawyer for legal consultation without awaiting for a scheduled appointment. Further, the consultation may be via phonecall, SMS, or email.
5) Without being repeatedly charged
Lawyers make a living by dispensing legal advice.
For every scheduled consultation, payment is expected. This can balloon if consultation is frequent as the client will be repeatedly charged for the services. Hence, next to access, the next reason by clients for getting a legal retainer is to avoid being repeatedly charged as the stipulated fees will cover for the frequent consultations.
That is the concept of a basic retainer.
It can be modified depending on the requirements of the client. Advanced retainers may include these value-added services:
1) Basic Contracts
This is suitable for organizations which regularly need basic contracts prepared and/or reviewed. Basic contracts are usually those that are regularly used in the ordinary course of business, such as a lease contract, employment contract, a sales contract, basic service agreement, independent contractor agreement, and so on. They often do no exceed 3 pages.
On the other hand, advanced contracts refer to those that are not usually used in the ordinary course of business, such as a franchise agreement, technology transfer, master services agreement, and so on. They often exceed 3 pages with some extending to a hundred pages. This may be included in a retainer agreement if stipulated.
2) Review of Existing Company Policies
Legal retainers may also include regular review of existing Company Policies. It is usually a separate arrangement for a request to draft a new set of Company Policies as it requires considerable time and resources.
3) HR Support on Disicplinary Action
Due process can be technical at times, particularly when the subject of the investigation is a managerial employee. Hence, it is possible for a legal retainer to include HR support for disciplinary action so as to have a lawyer managing or supervising the due process to ensure that labor law requirements are observed.
4) Regular attendance in meetings
There are retainers where the lawyer is requested to attend meetings, whether weekly, monthly, quarterly, annually, or on specific occasions.
These meetings include Board Meetings, Management Committee Meetings, Annual Shareholders and Board of Director Meetings, and similar thereto.
5) Secondment or deployment of lawyers
Lawyers may be seconded or deployed to the client’s office regularly to have immediate access to a legal. It is like having an in-housel counsel dedicated to the client on those dates and time.
Depending on the agreement, the lawyer usually spends half a day every week or other week (2-week cycle) to monitor and prioritize legal matters in the client’s business.
6) Regular legal audit
Regular legal audits for business compliance may be part of a legal retainer. This is valuable for companies who are in businesses that are heavily regulated, such as manufacturing, construction, contractors and subcontractor, and similar therewith.
The usual Government agencies/offices involved are the Department of Labor and Employment (DOLE), Bureau of Internal Revenue (BIR) Securities and Exchange Commission (SEC), Food and Drugs Administration (FDA), Bureau of Customs (BoC), National Privacy Commission (NPC), to name a few.
The legal audits are usually done bi-annually or quarterly depending on the necessity and extent of work to be done.
7) Automatic representation in cases
There are legal retainers where they automatically represent their clients in csse of a lawsuit. This is crucial in companies which often experience litigation as there are deadlines for filing submissions; otherwise, non-filing will result in default and the case will proceed to judgment based on available evidence, which is usually limited to the other party.
Basic legal retainers are not obligated to automatically represent a client in a lawsuit. It is still possible for the lawyer to decline handling a case for many reasons, such as avoiding a conflict of interest – what if the other party is also a client? It is also possible that the lawyer or the law firm may not have the expertise.
In this case, the client would have to source another lawyer while the clock is ticking due to running deadlines. As a stop-gap measure, legal retainers who are bound to provide automatic representation may handle the case temporarily for the purpose of protecting the client’s interest, particularly on not being declared in default. If there are no impediments, the laywer can continue handling the case.
In summary, a legal retainer is contractual in nature. The above are usual examples of value-added service. There are many additional services that the client and the lawyer may include in a legal retainer. It is thus recommended to explore these with the lawyer to maximize the value and benefit of having a legal retainer.