Understanding your agreement with a lawyer before you sign | Lawyers Who Speak
When you hire a lawyer in Canada, one of the first things you will be asked to sign is a retainer agreement. For many people, this is an unfamiliar document that arrives at a stressful time, and it can be tempting to sign it quickly without reading it carefully. That would be a mistake.
A retainer agreement is a legally binding contract between you and your lawyer. It sets out the terms of your working relationship, including what work the lawyer will do, how much they will charge, and what both parties are expected to do throughout the process. Understanding what is in this document before you sign it can save you from unexpected costs, misunderstandings, and frustration down the road. This guide explains what a retainer agreement is, what it should contain, what to watch out for, and what questions to ask before you put your signature on it.
What Is a Retainer Agreement?
A retainer agreement, sometimes called a client service agreement or engagement letter, is the formal contract that establishes the lawyer-client relationship. It is a written record of what you and your lawyer have agreed to, and it protects both of you if any disputes arise later about fees, scope of work, or expectations.
In Ontario, lawyers are required by the Law Society of Ontario to have a written agreement with their clients that clearly sets out the basis on which fees will be charged. This requirement exists to protect clients and promote transparency in the legal profession. The word “retainer” can sometimes cause confusion because it is used in two different ways. It can refer to the agreement itself, or it can refer to an upfront payment you make to secure the lawyer’s services. In this article, retainer agreement refers to the written contract, while retainer fee refers to the upfront deposit.
What Should a Retainer Agreement Include?
Every retainer agreement is different, but a well-drafted agreement should cover the following key areas.
Scope of Work
The agreement should clearly describe what legal services the lawyer is being hired to provide. This is one of the most important sections. A vague or broad scope of work can lead to disagreements later about what is and is not included. For example, if you are hiring a lawyer to help with a real estate transaction, the agreement should specify exactly what that includes, such as reviewing the agreement of purchase and sale, conducting title searches, and attending the closing.
Fee Structure and Billing Method
The agreement must explain how the lawyer charges for their services. As outlined in our guide to how much a lawyer costs in Ontario, fees can be structured in several ways, including hourly rates, flat fees, or contingency arrangements. The retainer agreement should state clearly which structure applies to your matter and what the rate or fee amount is.
The Retainer Fee and Trust Account
If the lawyer requires an upfront deposit, the agreement should state the amount and explain that it will be held in a trust account. In Ontario, lawyers are required to keep client funds in a separate trust account and can only withdraw money from it as fees are earned. The agreement should also explain what happens to any unused portion of the retainer when your matter is resolved.
Disbursements
In addition to legal fees, you will likely be charged for disbursements, which are expenses the lawyer incurs on your behalf such as court filing fees, title searches, courier costs, and photocopying. The agreement should acknowledge that disbursements will be billed separately and, where possible, give you an estimate of what to expect.
Billing and Payment Terms
The agreement should explain how often you will be billed, what the payment terms are, and what happens if an invoice is not paid on time. Some lawyers bill monthly, others bill at key milestones, and others bill at the end of the matter. Knowing this upfront helps you plan your finances accordingly.
Communication and Availability
Some agreements include provisions about how the lawyer will communicate with you, how quickly they will respond to calls and emails, and who your main point of contact will be if other members of the firm are also working on your file. This is particularly important if you are working with a larger firm where multiple people may be involved.
Termination of the Agreement
The agreement should explain how either party can end the relationship and what happens when that occurs. As covered in our guide to how to switch lawyers mid-case, you have the right to end your relationship with a lawyer at any time. The agreement should make clear what fees will be owed for work already completed and how your file will be returned to you.
Confidentiality The agreement may include a section on solicitor-client privilege and confidentiality, confirming that everything you share with your lawyer is protected and cannot be disclosed without your consent. This protection exists automatically under Canadian law, but it is worth understanding and confirming it is reflected in your agreement.
What to Watch Out for in a Retainer Agreement
Before signing, read the agreement carefully and watch for the following:
- Vague scope of work — if the description of services is too broad or unclear, ask the lawyer to be more specific before you sign. You want to know exactly what is and is not included.
- Open-ended fee estimates — if the agreement does not include any estimate of total costs, ask for one in writing. While no lawyer can guarantee a final price, they should be able to give you a realistic range.
- High upfront retainer with no explanation — if you are being asked for a large upfront deposit, make sure you understand what it covers and what happens to any unused funds at the end.
- Automatic top-up clauses — some agreements include provisions requiring you to replenish the retainer automatically when it runs low, without your explicit approval each time. Make sure you are comfortable with this.
- No termination clause — if the agreement does not explain how to end the relationship, ask for one to be added before you sign.
- Billing increments — some lawyers bill in minimum increments, such as 15 minutes, regardless of how short the actual task was. Make sure you understand how time is tracked and billed.
Who is doing the work — if junior lawyers or paralegals will be working on your file, the agreement should reflect their billing rates, which are typically lower than the senior lawyer’s rate.
Questions to Ask Before You Sign
As we outlined in our guide to questions to ask before hiring a lawyer, it is always worth asking the right questions before committing. When reviewing a retainer agreement specifically, consider asking:
- Can you walk me through the agreement and explain each section?
- What is your best estimate of the total cost for my matter?
- What happens to my retainer deposit if I decide not to proceed?
- How will I be notified if costs are likely to exceed your estimate?
- Can I approve any disbursements over a certain amount before they are incurred?
- What is the process if I want to end our working relationship?
A good lawyer will be happy to answer all of these questions and will welcome a client who takes the time to understand the agreement. If a lawyer is dismissive or impatient when you ask for clarification, that is a warning sign worth taking seriously.
Can You Negotiate a Retainer Agreement?
Yes, in many cases you can. A retainer agreement is a contract, and like any contract, its terms can sometimes be negotiated before you sign. This does not mean you should expect a lawyer to dramatically reduce their rates, but it is reasonable to ask for adjustments if something does not feel right.
Things that are sometimes negotiable include:
- The size of the initial retainer deposit
- The billing frequency, for example monthly rather than weekly
- Payment plans if you cannot pay a large retainer upfront
- Caps on certain types of disbursements
- The scope of work, if you only need help with part of a matter
The key is to have these conversations before you sign, not after. Once you have signed the agreement, its terms are binding.
Retainer Agreements and Language Barriers
A retainer agreement is a detailed legal document written in English. If English is not your first language, reviewing and understanding it can be challenging. This is another reason why working with a lawyer who speaks your language is so valuable.
When your lawyer speaks your language, they can walk you through the agreement in a way you fully understand, answer your questions clearly, and make sure you are not signing something you are unsure about. You should never feel pressured to sign a legal document you do not fully understand, regardless of the language it is written in. If you are looking for a lawyer who communicates in your language across Toronto and the GTA, Lawyers Who Speak makes it easy to search by language and practice area. Our directory features lawyers who speak Arabic, Mandarin, Punjabi, Spanish, Hindi, Farsi, Cantonese, French, Tamil, Ukrainian, and many more languages.
The Bottom Line
A retainer agreement is not just a formality. It is the foundation of your relationship with your lawyer, and understanding it fully before you sign is one of the most important steps you can take to protect yourself. Take the time to read it, ask questions, and make sure everything is clear before you commit. If anything in the agreement is unclear or feels wrong, do not hesitate to raise it. A lawyer who is right for you will welcome the conversation.
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