What a retainer or engagement letter commits you to

72 · 2026-10-10 · 21 min read · Español

An engagement letter, also called a retainer agreement, is the contract between you and a lawyer: it names the client, defines the job, sets how the fee is charged, and says how the arrangement ends. Signing it commits you to pay on that basis for that job. It does not stop you ending the arrangement when you choose, and money paid in advance for work not done comes back. New York and California require one in writing above set amounts; ask for one wherever you are.

• An engagement letter, or retainer agreement, is the contract with your lawyer. New York requires one where the fee is expected to reach $3,000, with exceptions; California requires a written fee contract when the total cost will foreseeably exceed $1,000.
• “Retainer” also means money paid in advance. Under the ABA Model Rules and California’s rules, advance fees go into a trust account and the unearned part comes back; California allows “non-refundable” only for a true retainer, paid for availability rather than work.
• The client is whoever the letter names. When a band signs together, Canada’s Model Code requires the lawyer to warn each member that nothing one of them says about the matter is confidential from the others.
• The scope paragraph is the job. Canada’s Model Code requires a limited scope retainer to be confirmed in writing, and New York requires an updated letter when the scope or the fee changes significantly.
• A client may end the engagement at will; a lawyer needs good cause and reasonable notice. A disputed bill can be assessed in Ontario, or taken to fee arbitration that the lawyer cannot refuse in New York and California.

What is an engagement letter, and is a retainer the same thing?

An engagement letter is the contract that names client, job, fee and exit; “retainer” means that contract or money paid in advance. Two words for one document, and then one word for two things. That is the first trap, and it is in the title.

New York’s rule treats the names as one. Part 1215 requires “a written letter of engagement” covering the scope of the work, the fees, “expenses and billing practices,” and any right to arbitrate a fee dispute — and accepts “a signed written retainer agreement” in its place. California’s Business and Professions Code section 6148 asks for the basis of compensation, “the general nature of the legal services to be provided,” and “the respective responsibilities of the attorney and the client.” Between them, the letter answers four questions — who the client is, what the job is, how it is paid, and how it ends — and the sections below take them in that order.

Now the second meaning. A retainer is also money paid before the work, and money paid before the work is not the lawyer’s yet. The ABA’s Model Rule 1.15(c): “A lawyer shall deposit into a client trust account legal fees and expenses that have been paid in advance, to be withdrawn by the lawyer only as fees are earned or expenses incurred.” California’s rule 1.15(a) puts “advances for fees, costs and expenses” in an account labelled “Trust Account.” Canada’s Model Code of Professional Conduct, the text the provincial law societies write their own rules from, counts a client’s money as client property, kept “distinguishable from the lawyer’s own property.”

One kind of retainer is earned the moment it is paid, and California defines it narrowly. Under rule 1.5(d) of California’s Rules of Professional Conduct, a fee may be called “earned on receipt” or “non-refundable” only if it is a true retainer and the client agrees in writing, after disclosure, that no refund is coming. “A true retainer is a fee that a client pays to a lawyer to ensure the lawyer’s availability to the client during a specified period or on a specified matter, but not to any extent as compensation for legal services performed or to be performed.”

Availability, not work. If the money is for work, the ABA’s comment on Model Rule 1.5 puts it in one line: “A lawyer may require advance payment of a fee, but is obliged to return any unearned portion.”

So when a letter says “retainer,” find out which one it means before you wire anything. If it means the contract, read on. If it means money, ask whether it buys availability or work, and where it will sit until it is earned.

Does it have to be in writing?

In New York for most fees expected to reach $3,000, in California when total cost will foreseeably exceed $1,000; the model rules say “preferably.” Two thresholds. Below them, a softer word.

New York’s rule wants the letter “before commencing the representation,” or within a reasonable time after where that is impractical. Section 1215.2 lists the exceptions: a fee “expected to be less than $3,000,” work “of the same general kind as previously rendered to and paid for by the client,” domestic relations matters, and a lawyer admitted elsewhere who keeps no New York office and does no material part of the work there.

California’s section 6148 is stricter in three ways. The contract “shall be in writing” whenever “it is reasonably foreseeable that total expense to a client, including attorney fees, will exceed one thousand dollars ($1,000),” and the lawyer must hand you a copy signed by both of you. Every bill must state its basis, and on request the lawyer must send one within ten days — or, if one went out in the 31 days before you asked, within 31 days of that one. And if the lawyer skips any of it, “failure to comply with any provision of this section renders the agreement voidable at the option of the client,” with the lawyer then entitled to “a reasonable fee.”

Read the exceptions in subdivision (d) before relying on it, because one of them catches bands. The section does not apply to emergencies, to work of the same kind you have paid for before, to a client who waives it in writing after full disclosure — or “if the client is a corporation.” If your band works through a company and the company is the client, California’s writing rule is not on your side. Ask for the letter anyway.

Outside those two states, the model text is softer. ABA Model Rule 1.5(b) says the scope and “the basis or rate of the fee and expenses for which the client will be responsible shall be communicated to the client, preferably in writing.” Texas, in its Disciplinary Rules of Professional Conduct, says the same of the basis or rate. Canada’s Model Code requires fees to be “disclosed in a timely fashion,” and its commentary says the basis should be in writing “before or within a reasonable time after commencing a representation.”

One kind of fee needs writing everywhere read for this page: the contingent one. ABA Rule 1.5(c) wants “a writing signed by the client,” Texas rule 1.04(d) a written agreement, California’s section 6147 a signed contract, and the Model Code “a written agreement in accordance with governing legislation.”

Our recommendation is simpler than any of the thresholds: get it in writing wherever you are, whatever the amount. The page on finding a lawyer said to agree the fee basis in writing before any work starts. This is that writing, and the rest of this page is how to read it.

Who is the client, and who is paying?

The client is whoever the letter names: a band signing together shares one lawyer, and whoever pays the bill does not become the client. Read the first paragraph before the fee. It says whose lawyer this is.

Start with the name. The Model Code’s commentary on who counts as a client has the rule that matters to anybody with a company: “When an individual consults a lawyer in a representative capacity, the client is the corporation, partnership, organization, or other legal entity that the individual is representing.” If the band’s company signs, the company is the client. You are the person who signed for it.

If the members sign together, it is a joint retainer, and rule 3.4-5 says what the lawyer must tell each of you first: “(a) the lawyer has been asked to act for both or all of them; (b) no information received in connection with the matter from one client can be treated as confidential so far as any of the others are concerned; and (c) if a conflict develops that cannot be resolved, the lawyer cannot continue to act for both or all of them and may have to withdraw completely.”

Paragraph (b) is the one that changes how you talk in the room. Tell the band’s lawyer you are thinking of going solo, and you have told the band.

Your consent to that has to be in writing, or recorded in writing to each of you. And if the members later disagree about the matter, rule 3.4-8 says the lawyer “must not advise them on the contentious issue.” The day the band disagrees about the thing that matters, the shared lawyer steps back from exactly that thing.

Watch for a lawyer who already works for somebody else in the deal. Rule 3.4-6: if a lawyer “has a continuing relationship with a client for whom the lawyer acts regularly” and is asked to act for that client and you together, the lawyer “must advise the other client of the continuing relationship and recommend that the client obtain independent legal advice about the joint retainer.” The page on who does what has the manager’s side of that sentence.

Now the money. Somebody else can pay your lawyer — a label, a manager — and it changes nothing about whose lawyer it is, on three conditions. ABA Model Rule 1.8(f): “(1) the client gives informed consent; (2) there is no interference with the lawyer’s independence of professional judgment or with the client-lawyer relationship; and (3) information relating to representation of a client is protected.” Texas rule 1.08(e) says the same, and the Model Code bars payment from “anyone other than the client without full disclosure to and the consent of the client.”

And the money cannot run the other way. The Model Code’s rule 3.6-7 says a lawyer must not “give any financial or other reward for the referral of clients or client matters to any person who is not a lawyer.” Under Canada’s model, the person who introduced you may not be paid for it by the lawyer. If you think they are, ask out loud.

Last, any paragraph about the lawyer acting for someone else. That is where you consent to a conflict, and rule 3.4-2 sets the bar: “Express consent must be fully informed and voluntary after disclosure.” The page on what a lawyer does has the conflict rule itself. Ask for the disclosure before you sign under the paragraph.

What exactly have you hired the lawyer to do?

Whatever the scope paragraph says, and nothing beyond it; a significant change of scope needs, in New York, an updated letter. Scope is the paragraph everybody skims, and it is the job.

The Model Code has a name for a job smaller than the whole matter: a “limited scope retainer” means “the provision of legal services for part, but not all, of a client’s legal matter by agreement with the client.” Rule 3.2-1A requires the lawyer to advise you “about the nature, extent and scope of the services that the lawyer can provide” and to “confirm in writing to the client as soon as practicable what services will be provided.” The ABA’s Model Rule 1.2(c) allows the same “if the limitation is reasonable under the circumstances and the client gives informed consent.”

A defined job is a verb and a document. The law defines the job by four verbs — advise, draft, negotiate, represent — and a scope paragraph picks among them. “Review the producer agreement” is advice: the lawyer reads it and tells you what it does. Negotiating it is a second verb, and redrafting it a third. Hire a lawyer to review the contract, and the contract has been reviewed.

So read the verb as closely as the fee. If what you need is somebody to go back to the other side and get the clause changed, the paragraph has to say negotiate, and it has to name the document.

Watch for a cap the lawyer can see past. The ABA’s comment on Rule 1.5 says a lawyer “should not enter into an agreement whereby services are to be provided only up to a stated amount when it is foreseeable that more extensive services probably will be required, unless the situation is adequately explained to the client.” Otherwise the client “might have to bargain for further assistance in the midst of a proceeding or transaction” — the worst moment to be bargaining with your own side.

And watch for the job growing. When “something unusual or unforeseen occurs that may substantially affect the amount of a fee or disbursement,” the Model Code’s commentary says the lawyer “should give to the client an immediate explanation” and “confirm with the client in writing the substance of all fee discussions that occur as a matter progresses.” The page on finding a lawyer told you to ask what happens when the job turns out bigger than it looked; this is the rule that says the answer arrives in writing.

Our recommendation: before you sign, make the scope paragraph say three things in words. Which document. Which verbs. Which country’s law — because the licence is per jurisdiction, and a lawyer in Toronto reading a contract governed by California law is a question to raise, not to assume.

What are you agreeing to pay, besides the fee?

Disbursements paid out for you, interest the letter discloses, other charges you agree to in writing, and any rate increase the letter announces. The fee is the number on the first page. These are the numbers on the second.

Disbursements first. The Model Code requires every statement of account to “clearly and separately detail the amounts charged as fees and disbursements,” and its commentary limits disbursements to “those amounts that have been paid or are required to be paid to a third party by the lawyer on a client’s behalf” — filing fees, couriers, a search. In-house work such as “paralegal, word processing or computer costs” may be billed as “Other Charges” only if “the client has agreed, in writing, to such costs.” Interest is covered too: the fee rule reaches “a fee or disbursement, including interest.” If interest will run on late accounts, look for the rate in the letter.

Then the rate itself, which may not be the rate you pay next year. The ABA’s comment: “Periodic, incremental increases in a lawyer’s regular hourly billing rates are generally reasonable if such practice is communicated clearly to and accepted by the client at the commencement of the client-lawyer relationship.” A sentence in the letter saying the rate rises each year is that communication, and your signature is that acceptance.

What the bill must show depends on where you are. California’s section 6148(b) requires every bill to show the amount, the rate and the basis for the fee, and to identify the costs. Ontario’s Solicitors Act is content with less: a bill is “sufficient in form if it contains a reasonable statement or description of the services rendered with a lump sum charge therefor together with a detailed statement of disbursements.” If you want hours itemised in Ontario, the letter is where to ask for them.

A percentage is a lawful fee and it needs the most care. Ontario’s Act lets a lawyer make “an agreement in writing” for payment “by a gross sum or by commission or percentage.” If the fee depends on the outcome, ABA Rule 1.5(c) requires a writing signed by the client stating “the method by which the fee is to be determined,” and California’s section 6147 requires the contract to say that “the fee is not set by law but is negotiable between attorney and client.” No rule read for this page says in terms whether a percentage of a record or publishing deal is a contingent fee.

So our recommendation, for any percentage: have it written as if it were one. The percentage, what it is charged on — the advance, the royalties, or both — and when it stops, including whether it survives the end of the engagement. Signed by you. The page on finding a lawyer explains why a percentage changes the lawyer’s incentives; this is where those incentives get an end date.

And if the letter offers to take something other than money — points on a master, a share of a song — the rules look at it twice. The ABA’s comment says such a fee “may be subject to the requirements of Rule 1.8(a) because such fees often have the essential qualities of a business transaction with the client,” and 1.8(a) wants fair terms in writing, a written recommendation to take independent advice, and your consent “in a writing signed by the client.” The Model Code’s rule 3.4-36, on payment by “a share, participation or other interest in property,” says the lawyer “must recommend but need not require that the client receive independent legal advice before accepting a retainer.” Take the advice.

No rate is printed here, for the reason the page on finding a lawyer gives: nobody who publishes states one. Ask the lawyer. The answer goes in the letter.

Can you end it, and what happens to your money and your file?

Whenever you choose: you owe for work done, unearned money comes back, and your papers come back, under Canada’s model rules subject to a lien. The exit is not symmetrical, and it is not supposed to be.

The Model Code’s rule 3.7-1 says a lawyer “must not withdraw from representation of a client except for good cause and on reasonable notice to the client,” and its commentary states the difference outright: “Although the client has the right to terminate the lawyer-client relationship at will, a lawyer does not enjoy the same freedom of action.”

Non-payment is a ground, with a limit. Rule 3.7-3: “If, after reasonable notice, the client fails to provide a retainer or funds on account of disbursements or fees, a lawyer may withdraw unless serious prejudice to the client would result.” The paragraph in the letter about topping up the deposit is where that rule meets your bank account, so read it for the amount and the notice.

On the way out, rule 3.7-9 lists what the lawyer owes you: delivery of “all papers and property to which the client is entitled,” an account “for all funds of the client then held or previously dealt with, including the refunding of any remuneration not earned during the representation,” and a prompt account for anything outstanding. The ABA’s Model Rule 1.16(d) and Texas rule 1.15(d) both require “refunding any advance payment” of a fee not earned. California’s rule 1.16(e) requires the same refund, except of a true retainer.

The papers are where the jurisdictions part. The Model Code makes delivery “subject to the lawyer’s right to a lien,” and Ontario’s Solicitors Act has a solicitor hand over the client’s papers on an assessment “upon payment by the client … of what, if anything, appears to be due.” The Code’s commentary limits it: “Generally speaking, a lawyer should not enforce a lien if to do so would prejudice materially a client’s position in any uncompleted matter.” California goes the other way. Its rule 1.16(e)(1) requires the lawyer to release “all client materials and property” on request, “whether the client has paid for them or not.”

Our recommendation: settle the bill, or start disputing it, before you need the file. An unpaid account and a signature somebody is waiting on are a bad pair to be holding in the same week.

What can you do if the bill looks wrong?

Ask for an itemised bill; then Ontario lets you have it assessed, and New York and California give you fee arbitration the lawyer cannot refuse. Every one of these runs on a clock, and the clock starts when the bill arrives.

In Ontario, the lawyer cannot sue on a bill “until one month after a bill thereof” has been delivered, and that month is yours. Section 3 lets the client obtain an order on requisition “for the assessment of a bill already delivered, within one month from its delivery,” where the retainer is not disputed. After twelve months, section 4(1) allows no assessment “except under special circumstances to be proved to the satisfaction of the court.” On an assessment the solicitor “shall refund what, if anything, he or she may on such assessment appear to have been overpaid.”

In New York, Part 137 gives the client the door: “Arbitration under this Part shall be mandatory for an attorney if requested by a client,” and the award is final and binding “unless de novo review is sought.” It covers disputes from $1,000 to $50,000, unless the parties consent to more or less. Before suing you, a lawyer must send a “Notice of Client’s Right to Arbitrate,” and you have “30 days from receipt of the notice” to choose it.

Read the letter for one more clause, because New York lets it be there before any dispute exists. A client “may consent in advance to submit fee disputes to arbitration under this Part,” in “a retainer agreement or other writing,” and the two of you may agree in advance to arbitration that is “final and binding upon the parties and not subject to de novo review,” or to another forum altogether. If the letter has that paragraph, it is one of the things you are signing.

California’s section 6200 works the same way round: “arbitration under this article shall be voluntary for a client and shall be mandatory for an attorney if commenced by a client,” unless the client has agreed in writing to arbitrate all fee disputes there. A lawyer suing for fees must send notice of your right before or when the claim is served, and under section 6201 failing to request arbitration “within 30 days after receipt of notice from the attorney shall be deemed a waiver.” Under section 6204, the two of you may agree to be bound by the award “at any time after the dispute over fees, costs, or both, has arisen.”

Three places, one instruction. Open the bill the day it arrives and ask for the itemised version that day. If the numbers still look wrong, use the door while it is open: a month from delivery in Ontario, 30 days from the lawyer’s notice in New York and California.

FAQ

Does a free clinic consultation come with an engagement letter?

Usually not, and the rules expect that. New York’s letter rule applies only where a fee is charged and is expected to reach $3,000, and Canada’s Model Code exempts summary advice and initial consultations from its rule on confirming a limited scope in writing.

What if I never signed one?

The lawyer-client relationship still exists, because Canada’s Model Code says it may be established without formality. In California, a fee contract that the law required in writing and that was never put in writing is voidable at your option, and the lawyer is then owed a reasonable fee.

Can I negotiate an engagement letter before signing it?

Yes. Ontario’s Solicitors Act treats the fee terms as an agreement a lawyer may make with a client in writing, and California requires a contingency fee contract to state that the fee is not set by law but is negotiable between attorney and client.

Sources

• New York, 22 NYCRR § 1215.1 (Cornell LII) — the written letter of engagement, its three matters, the signed retainer agreement in its place, and the updated letter on a significant change.
• New York, 22 NYCRR § 1215.2 (Cornell LII) — the exceptions, including fees expected to be less than $3,000.
• New York, 22 NYCRR Part 137 (Cornell LII) — § 137.1(b)(2), the $1,000 to $50,000 range; § 137.2, arbitration mandatory for the attorney at the client’s request, and advance consent; § 137.6(a), the notice and the 30 days.
• California Business and Professions Code, § 6148 — the written fee contract over $1,000, its contents, bills and the bill on request, voidability, and the exceptions including a corporate client.
• California Business and Professions Code, § 6147 — the contingency fee contract, and the statement that the fee is negotiable.
• California Business and Professions Code, § 6200, § 6201 and § 6204 — fee arbitration voluntary for the client and mandatory for the attorney; the notice and the 30 days; binding only by agreement after the dispute arises.
• The State Bar of California, Rules of Professional Conduct, Chapter 1 — rule 1.5(d)–(e), the true retainer and the flat fee; rule 1.15(a)–(b), trust and the flat-fee disclosures; rule 1.16(e), client materials whether paid for or not, and the refund.
• American Bar Association, Model Rule 1.5 and its comment — scope and basis preferably in writing; the signed contingent-fee writing; in-house costs, rate increases, advance payments and fees paid in property; the foreseeable cap.
• American Bar Association, Model Rule 1.15 — paragraph (c), advance fees into a client trust account and withdrawn as earned.
• American Bar Association, Model Rule 1.8 — paragraph (a), business transactions with a client; paragraph (f), payment by someone other than the client.
• American Bar Association, Model Rule 1.2 — paragraph (c), limiting the scope with informed consent.
• American Bar Association, Model Rule 1.16 — paragraph (d), papers and the refund of unearned advances on termination.
• State Bar of Texas, Texas Disciplinary Rules of Professional Conduct (including amendments effective 31 January 2022) — comment 4 to rule 1.02, a retainer for a defined objective; rule 1.04(c)–(d), the basis preferably in writing and the written contingent fee; rule 1.08(e), payment by someone other than the client; rule 1.15(d), the refund on termination.
• Federation of Law Societies of Canada, Model Code of Professional Conduct (as amended April 2024) — the definitions of client and limited scope retainer; rules 3.2-1A, 3.4-2, 3.4-5 to 3.4-8 and 3.4-36; rules 3.5-1, 3.5-4 and 3.5-6 on client property; rules 3.6-1 to 3.6-3 and 3.6-7 on fees, disbursements and referrals; rules 3.7-1, 3.7-3 and 3.7-9 on withdrawal; with the commentary quoted.
• Solicitors Act, R.S.O. 1990, c. S.15 (e-Laws, current to 30 September 2026) — s. 2(1) and (3), the month before suing and the lump-sum bill; s. 3, assessment on requisition within one month; s. 4(1), twelve months and special circumstances; s. 6(2) and (6), the refund and the papers on payment; s. 16(1), written fee agreements including commission or percentage.

Every page cited here was read on 4 October 2026. The ABA’s rules and Ontario’s e-Laws were read in a browser, because both refuse other clients; New York’s court rules were read on Cornell’s Legal Information Institute, where the New York courts’ own rules index now sends its readers; the Model Code and the Texas rules are PDFs decoded with the standard library. The Model Code is Canada’s national model, which each provincial law society adopts in its own version, and the ABA’s rules are a model each state adopts in its own version; where this page says what a jurisdiction requires, it names the jurisdiction. Whether a percentage of a record or publishing deal counts as a contingent fee is stated as unknown, because no rule read for this page decides it. The recommendations are marked as ours where they appear. No rate, deposit or fee amount is given anywhere on this page. Nothing here is legal advice about your letter: the lawyer who sent it is the person to ask, and a second lawyer is the person to ask about the first one.