How does a legal retainer work?
A retainer is money that you deposit for the performance of future legal services. With this type of lawyer retainer, the attorney does not get to keep the money until they actually provide the services you are requesting.
When you pay a security retainer, the money goes into a trust or an escrow account (this is sometimes called an IOLTA account, short for “interest on lawyer trust’ account). The money earns interest, but neither you nor your lawyer get the interest. The interest usually goes into a state charitable fund to pay for legal services for those who cannot afford them.
The lawyer (and the firm employing the attorney, if applicable) cannot use this money yet. They must earn it first. Depending on the terms of the agreement you make with your attorney, your lawyer may receive this money on a set schedule after performing services or after the attorney has performed all of the specified legal services.
The goal of a security retainer is to ensure you actually have the funds to pay for legal services you’re seeking. You may be asked to put more money into this trust account after all of the initial fees have been paid out. And when your lawyer has finished performing services you may get a refund of unused funds or your lawyer may get to keep any remaining money left over, depending on the terms of your representation agreement.