Before we discuss how fees are charged, we need to discuss an often-misunderstood topic – retainers. For nearly all matters, we require a retainer. Retainers, in most cases, are funds that a client pays to the Firm to guarantee prompt payment attorney fees and reimbursable costs. These funds are placed in a form of trust account, managed in accordance with the Rules of the Colorado Supreme Court. These accounts, often called COLTAF accounts, are subject to strict accounting rules. An attorney may not withdraw money from retainer funds placed into a COLTAF account until they are deemed earned.
We often require clients to post one of two types of retainers: expense retainer and general retainers. An expense retainer is specifically designed to be used for costs incurred in the matter and which are reimbursable to the Kanthaka Law. More common is a general retainer. The funds held in an expense retainer are subject to the charges made against your account not only for reimbursable costs, but for accrued attorney fees as well. At the end of the matter, any funds remaining in the retainer are returned to the client.
Most general retainers are considered “evergreen”. Simply put, that means that the agreed amount of retainer must remain on deposit throughout the matter. For example, if your fee agreement requires a $1,000 retainer that is “evergreen”; when we bill $600 for legal fees and costs at the end of month, the funds come from that retainer on deposit and then you are obligated to pay an additional amount of $600, so that the retainer account is returned to is original value of $1,000.