People generally put almost complete faith in the lawyers who represent them. They hire someone licensed by the state with experience in a certain area of law. They expect to receive proper guidance and advocacy in return for their investment.
Unfortunately, not all legal professionals offer the same standard of representation. Some take on clients and cases that they cannot properly handle. Others engage in unethical conduct that can cause damage to their clients.
In scenarios where a lawyer’s conduct does not meet current professional Standards and causes harm to a client, the situation may constitute legal malpractice. Mismanagement of a retainer can sometimes constitute legal malpractice.
What are the rules for retainers?
A client hiring a lawyer pays a retainer fee in many cases. They pay a lump sum at the beginning of the attorney-client relationship based on the lawyer’s hourly rate and the anticipated work necessary to resolve the legal matter. Retainers are often thousands of dollars.
The two main rules that lawyers may violate when handling a client’s retainer relate to how they hold the funds and also how they use the funds. A retainer does not yet belong to the lawyer. It is a deposit that they bill against when they provide services to their client.
They should keep the funds separate from both their business financial resources and their personal bank account. Attorneys often use specialized escrow accounts to hold client retainers until the resolution of the legal matter that the client hires them to handle. Commingling retainer funds with business funds is a common source of malpractice allegations.
A lack of transparency or improper billing habits can also lead to legal malpractice claims. For example, an attorney may notify a client that they have exhausted the retainer without providing a complete breakdown of how they used those funds. Lawyers generally need to account for every hour of billable time for which they charge their clients.
Situations in which lawyers do not provide a thorough breakdown of the use of retainer funds could lead to legal malpractice lawsuits. So could cases where a lawyer has clearly exaggerated the amount of time spent on different legal issues for clients in order to burn through their retainers as quickly as possible.
Clients who question the financial conduct of an attorney may need help reviewing billing records to determine if legal malpractice has occurred. Initiating a legal malpractice lawsuit can potentially compensate clients who have taken advantage of by an attorney they trusted with a serious legal issue.
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