Retainer agreement builder

Starting draft only. Trust accounting rules, including whether IOLTA participation is mandatory or voluntary and what recordkeeping is required, vary by state. Have counsel review the final draft against your specific state's trust account rules before use. See our full disclaimer.

Retainer agreement details

Your firm or attorney name

Client name

Brief description of the matter

Hourly rate ($)

Initial retainer amount ($)

Retainer type

Replenish when trust balance falls below ($)

Your draft retainer agreement

Want this reviewed against your state's trust rules?

A legal ethics consultant can review your draft against your specific state's IOLTA and trust accounting requirements before you send it.

How is a retainer agreement different from a general engagement letter?

A general engagement letter covers the broad terms of representation, while a retainer agreement focuses specifically on how the advance deposit is collected, held, drawn down, and replenished. Retainer funds are unearned client money and must be deposited into a trust account, commonly an IOLTA, separate from the firm's operating account, and can't be withdrawn until the corresponding work has actually been billed and applied. Every US state now operates an IOLTA program, though participation rules and specific recordkeeping requirements vary by jurisdiction.

An evergreen retainer is replenished by the client whenever the trust balance falls below an agreed threshold, keeping a consistent buffer available throughout the matter. A fixed retainer is a single deposit billed against until exhausted, at which point the client is typically switched to direct invoicing or asked for an additional deposit. Once your retainer agreement is drafted, our engagement letter builder covers the broader scope-of-representation terms, and our legal invoice generator helps produce the invoices that trigger each trust withdrawal.

Can a lawyer ever borrow from a client's trust account, even temporarily?

No, this is one of the most serious and consistently enforced ethics violations across every jurisdiction. Trust funds belong to the client until earned, and using them for firm cash flow, even with the intention of repaying them, is treated as misappropriation regardless of intent. Mismanagement or commingling of trust funds is a leading cause of attorney discipline, including disbarment in serious cases.

What happens to interest earned on a client's retainer while it sits in trust?

Under IOLTA rules, the attorney doesn't keep this interest, and typically neither does the individual client, since the amounts involved are usually too small or held too briefly to justify individual accounting. Instead, the pooled interest from all IOLTA accounts is directed to state-run legal aid and access-to-justice programs, a structure that has existed since the first IOLTA program launched in 1981.

Does a retainer agreement need to specify what happens to unused funds at the end of a matter?

Yes, and this is a common gap in poorly drafted retainer agreements. Any portion of the retainer that hasn't been earned by the time the representation ends must be returned to the client, and the agreement should say so explicitly rather than leaving it ambiguous, since disputes over unreturned trust balances are a recurring source of bar complaints.

Frequently asked questions about retainer agreements

No, and this distinction matters for trust accounting purposes. A true retainer is an advance deposit against future hourly billing and remains the client's money, held in trust, until earned. A true flat fee for a defined scope of work is sometimes treated differently depending on the state, with some jurisdictions allowing it to be treated as earned upon receipt if the agreement is clear, while others still require flat fees to be held in trust until the work is performed.

Most rules require reasonably prompt accounting upon request at minimum, and many firms provide a running trust balance with every invoice as a best practice, showing the beginning balance, amounts billed and withdrawn, and the remaining balance. This transparency reduces disputes and satisfies most jurisdictions' recordkeeping expectations.

The disputed portion generally should remain in the trust account until the dispute is resolved, while any undisputed amount can typically still be withdrawn. Prematurely withdrawing disputed funds before resolution can itself create an ethics problem, so the safer practice is to hold the contested amount until the disagreement is worked out.

Every state now operates an IOLTA program, but whether attorney participation is mandatory or voluntary varies by jurisdiction. Regardless of whether IOLTA specifically is required, holding unearned client funds separately from the firm's own money in some form of trust account is a near-universal ethical obligation.

Yes, even though IOLTA funds from multiple clients typically sit in a single pooled bank account, attorneys must maintain individual client ledgers tracking each client's specific balance. Failing to track balances separately, even within a pooled account, is considered a form of commingling and a common recordkeeping violation.