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3 ways an attorney can mishandle your retainer

| Jul 23, 2021 | Legal Malpractice |

Aside from personal injury attorneys and a few select specialty areas of the law, most attorneys don’t work on contingency fees. They need a retainer fee to get started on your case — whether that’s a divorce, a lawsuit against someone’s estate or a business dispute.

Exactly how much of a retainer you have to put down may vary greatly from situation to situation. It depends a lot on the attorney, your working  relationship with them and the case. Over time, you naturally expect the money in that retainer to be whittled down by your lawyer’s fees and court costs.

But what if you suspect that your attorney is cheating you? Maybe you paid a $20,000 retainer fee because you expected a lengthy case. But it settled quickly, and now your attorney says there is only $2,000 left to return to you. When you ask for an accounting of the hours they billed, your attorney becomes evasive.

Has your attorney mishandled your retainer?

There are three common ways that attorneys get into trouble when it comes to their clients’ retainers:

  • They “borrow” money from the account: Maybe your attorney is a little tight on money right now, and they figured they were going to earn the money from your retainer anyhow. Maybe they have an addiction to feed. Either way, they have no right to touch that money until they’ve actually earned it.
  • They commingled their funds with yours and lost track: Just like anybody else, an attorney can have poor business sense. If they don’t separate the money they earn from what’s still your money and pay bills from a common pot, they may accidentally misuse the funds that still belong to you.
  • They don’t keep good records: There are a lot of incidental expenses that go along with a lawsuit — but your attorney needs to track them all and assign them to the right accounts. If your attorney didn’t keep good records, there’s no way to know if your retainer was tapped for someone else’s bills (or the attorney’s).

Whatever the situation, you have a right to demand answers about your money. If you suspect that your attorney has misused your money, a legal malpractice claim may be your only option.