Retainer Agreements (continued)

What Content Should a Retainer Agreement Contain?

When drafting a retainer letter or agreement, keep in mind that it should be short, clear, easy to understand, and flexible enough to account for the particulars of the client's situation.  At a minimum, in accordance with subsection 83(2) of the Law Society Act, 1996, the retainer letter or agreement must contain:
  • the name of the member, or the firm to which the member belongs responsible for the performance of the legal services;
  • the name of the person entering into the agreement and the name of the person for whom the legal services are being performed;
  • a description of the legal services to be performed;
  • the amount of fees to be charged for the performance of the legal services and, in the case of a contingent fee agreement, the method by which the fees are to be calculated and paid;
  • a description of the costs, charges, disbursements and taxes to be paid under the agreement;
  • the manner in which costs awarded by the court or on a settlement are to be applied to the payment of fees, costs, charges, disbursements and taxes;
  • any other matter that affects the agreement; and
  • a statement that the person is entitled to a copy of the agreement at the time of its execution.
Although it is not wise to try to apply a single retainer template to all types of situations, the retainer letter or agreement should also include this information:
  • The retainer does not begin until the letter or agreement is executed, returned to the lawyer, and a money retainer is paid. (But remember that you have an obligation to act to preserve a client's interests.)
  • The client's instructions.
  • The authority to act (including authority for agents and experts and other parties where required).
  • The scope of services to be performed, or not performed, as applicable.
  • Timelines for when you will send bills and your expectation for payment.
  • Where appropriate, timelines for when events will occur or are likely to occur.
  • The method and frequency of communication with the client.  For example, you may say that you will strive to return phone calls in a timely manner but the nature of your practice means you will not necessarily be able to return calls the same day.
  • If interest is charged on overdue bills, explain how it is calculated. Make sure your interest provisions do not trigger the criminal rate of interest section of the Criminal Code of Canada, and that any interest charged is expressed as an annualized rate to comply with the Canada Interest Act.
  • Confirm critical instructions provided to the client at the initial meeting as well as crucial steps that need to be taken and by whom.  For example, do not leave the client with the impression that you are going to take certain steps if you are not.
  • The terms under which the entire retainer will be terminated. Note the rules regarding withdrawal of services in the Code of Professional Conduct, see section 3.7 of the Law Society of New Brunswick Code of Professional Conduct.
  • The client identification requirements as specified by the Law Society.
You should carefully consider confirming any changes to the essential terms of your engagement with your client in writing.  In particular, changes to the client’s instructions, changes to the client's address or other contact information, and changes to the risks or benefits associated with the matter should be in writing.