Retainer
An upfront payment to secure someone’s services, either as a deposit drawn down against future bills or as a fee to keep them available.
What it means
The word retainer covers two different arrangements. In one, the client pays an advance deposit that the provider draws down as work is billed, often topping it up when it runs low. In the other, the client pays a recurring fee, usually monthly, to reserve a set amount of the provider’s time or to guarantee availability, whether or not the time is used.
A marketing consultant might charge a $3,000 monthly retainer for up to 20 hours, with extra hours billed separately and unused hours expiring at month-end. A lawyer might take a $5,000 advance deposit, hold it in a client trust account, and apply it to invoices as work is done. The contract should say which type it is, because that decides whether unused money comes back.
Retainers favor the provider by securing cash flow and reducing collection risk. For clients, the key issue is what happens to unused funds when the engagement ends. Lawyers are bound by professional conduct rules, which vary by state, on how retainers are held and when they are earned, and those rules generally require unearned advance fees to be refunded. Other professions have more contractual freedom.
What to watch for
- Check whether the retainer is a deposit credited against invoices or a fee for availability that is earned when paid.
- See whether unused hours roll over, expire, or are refunded, including when the contract ends.
- Look for a top-up requirement and what happens if you do not replenish the balance.
- Confirm the hours or scope the retainer covers and the rate for work beyond it.
Example clause
Client will pay Consultant a monthly retainer of $3,000, in advance, for up to 20 hours of Services per month. Unused hours do not carry over to later months, and hours above 20 will be billed at $175 per hour.
You pay a fixed amount each month for up to 20 hours, lose any hours you do not use, and pay extra for overage.