Retainer Games

Chris McDonough Esq.
Foley Griffin LLP

Retainer Games by Chris McDonough

As a regular part of my practice, I draft retainers for law firms. I usually ask the client what they want to achieve with the retainer and begin drafting from there. Required information includes fee basis, tasks included, tasks excluded and the necessary clauses (no guarantee, arbitration notice, statement of client rights, right to terminate, etc.).  

Recently a client asked me to make some changes that I considered confusing and unnecessary. They tried to insist upon the changes as they felt the changes would “be to their benefit.”

Folks, we are not selling used cars or magazines door-to-door. We are professionals. The concept of “buyer beware” does not apply to the attorney-client relationship. A retainer agreement designed to take an advantage over a client is unethical, unenforceable and simply bad business. While under standard contract law, an ambiguous agreement will be construed against the drafter and unacceptable clauses can be discarded, while the remaining clauses remain in effect; attorney-client retainers are viewed differently.

The relationship between a lawyer and their client is a fiduciary one. “An attorney stands in a fiduciary relation to the client” (Graubard Mollen Dannett & Horowitz v Moskovitz, 86 NY2d 112, 118 [1995]). As a fiduciary, counsel “is charged with a high degree of undivided loyalty to his [or her] client” (Matter of Kelly v Greason, 23 NY2d 368, 375).  Attorney-client fee agreements possess special status representing lofty principles different from those applicable to commercial contracts and are a matter of special concern to the courts (see, Matter of Schanzer, 7 A.D.2d 275, affd. 8 N.Y.2d 972; Martin v. Camp, 219 N.Y. 170).

In other words — attorney-client retainers must be clear and straightforward. Gamesmanship can lead to your retainer being completely disregarded; with the court substituting its judgment for your retainer agreement.  

If you want an enforceable retainer, make it unambiguous, organized and clear. Include the fee and how and when it is earned, the scope of legal work to be performed and to be excluded. Make the rights of termination (yours and the client’s) clear, and state how and when the attorney-client relationship is over. Include all necessary disclaimers and special clauses as required and particular to the legal matter for which you are being retained. Keep it simple and use language that the average anticipated reader can understand.

Chris McDonough Esq.,
Senior Partner
McDonough & McDonough LLP
Special Counsel
Foley Griffin LLP.,
666 Old Country Road, Suite 305
Garden City, N.Y. 11530
(516) 741-1110
(516) 741-9171 (fax)

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