Professional services
Law Firm Retainer Fee Calculator
Sizes a retainer fee, where what kind of retainer it is changes everything that follows.
Result
Business arithmetic for running a practice, not legal advice. Fee agreements, contingency limits, trust accounting and fee splitting are governed by the rules of professional conduct in your jurisdiction, and several of them are strict. Check the applicable rules before any of this affects a client agreement. Retainer funds are usually client money held in trust and drawn down only as fees are earned and billed, and the accounting rules around that are strict and strictly enforced. Commingling trust and operating funds is among the most serious professional violations there is.
Get a Free Business AuditHow the calculation works
Expected hours times rate for the stage being covered, with a replenishment point set so funds do not run out mid-matter. The classification matters before the arithmetic: an advance against fees is client money held in trust until earned, while other arrangements are treated differently, and the conduct rules in your state determine the handling.
What moves the number
- Expected hours for the stage covered.
- Type of retainer and its treatment.
- Replenishment trigger.
- Disbursements expected in the period.
Where this one goes wrong
Unearned funds held as an advance against fees are the client's money and must sit in a client trust account separate from the firm's own funds, moving across only as fees are earned and billed. Treating them as revenue on receipt is a serious violation whatever the eventual outcome of the matter. Practically, set the replenishment trigger above zero and state it in the engagement letter, because a retainer exhausted mid-matter leaves the firm working on credit at the worst possible moment.
Before you quote
- Classify the retainer correctly and hold unearned funds in trust.
- Transfer to the firm only as fees are earned and billed.
- Set and communicate a replenishment trigger above zero.
Where the rules come from
Questions
About this calculator
Is a retainer the firm's money?
Not while it is unearned. An advance against fees is client money held in a trust account separate from firm funds, moving across only as fees are earned and billed. Treating it as revenue on receipt is a serious violation whatever happens later.
How big should a retainer be?
Enough for the stage of work being undertaken, with a replenishment trigger above zero stated in the engagement letter. A retainer that runs out mid-matter leaves the firm working on credit at exactly the point it has least leverage.
What if the matter ends with funds remaining?
They are returned to the client, because unearned funds remain client property throughout. Refunding the balance promptly is a requirement rather than a courtesy, and failing to do so is both a conduct issue and a reliable source of complaints.
The formula
months covered = retainer / monthly burn; replenishment trigger = retainer x trigger share
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How to use this calculator
- Initial retainer ($). Enter your own figure; the page starts at $7,500.
- Expected hours per month. Enter your own figure; the page starts at 9.
- Hourly rate ($). Enter your own figure; the page starts at $285.
- Disbursements per month ($). Enter your own figure; the page starts at $150.
- Replenish when it falls below (%). As a share of the original retainer.
The result updates as you type, so you can try a figure, see what it does to months the retainer covers, and change it back. Nothing you enter is sent anywhere or saved.
A worked example
These are the figures the calculator opens with. Every number in the results column below is produced by the same calculation the page runs, so you can follow it through before putting your own figures in.
What goes in
| Input | Value |
|---|---|
| Initial retainer | $7,500 |
| Expected hours per month | 9 |
| Hourly rate | $285 |
| Disbursements per month | $150 |
| Replenish when it falls below | 25% |
What comes out
| Result | Value |
|---|---|
| Months the retainer covers main result | 2.8 |
| Monthly burn | $2,715 |
| Replenish when balance reaches | $1,875 |
| Replenish in month | 2.1 |
| Retainer needed for a year | $32,580 |
At $2,715 a month the retainer lasts 2.8 months, and hits the $1,875 replenishment trigger in month 2.1. A full year at this pace needs $32,580.
How sensitive the answer is
Holding everything else steady and changing only initial retainer, this is what happens to months the retainer covers. It is worth knowing which of your inputs the answer actually hinges on, and which barely move it.
| Initial retainer ($) | Months the retainer covers |
|---|---|
| $3,750 | 1.4 |
| $5,625 | 2.1 |
| $7,500 example above | 2.8 |
| $11,250 | 4.1 |
| $15,000 | 5.5 |
Every other input is held at the example value while this one changes, which is not how a real job behaves. Treat it as a guide to which number matters most, not as five separate quotes.
What each figure means
- Initial retainer ($)
- A money amount, starting at $7,500.
- Expected hours per month
- A number, between 0 and 500, starting at 9.
- Hourly rate ($)
- A money amount, starting at $285.
- Disbursements per month ($)
- A money amount, starting at $150.
- Replenish when it falls below (%)
- As a share of the original retainer.
What the results tell you
| Result | What it is |
|---|---|
| Months the retainer covers | The headline result. A decimal figure. |
| Monthly burn | A money figure. |
| Replenish when balance reaches | A money figure. |
| Replenish in month | A decimal figure. |
| Retainer needed for a year | A money figure. |
Keep going
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