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Wednesday, October 24, 2007

Helpful retainer info. from ARDC

The Attorneys Registration and Disciplinary Commission is posting some guidance regarding the recent Dowling case concerning attorney retainers. Here's a nugget:

In Dowling, the Court recognized the following three types of retainers:

(1) A classic retainer, also referred to as a true or general retainer, is paid by a client to the lawyer in order to secure the lawyer’s availability during a specified period of time or for a specified matter. This type of retainer is earned when paid and immediately becomes property of the lawyer, regardless of whether the lawyer ever actually performs any services for the client. Dowling at *6.

(2) A security retainer is where funds paid to the lawyer are not considered present payment for future services but are intended to secure payment of fees for the future services the lawyer is expected to perform. This type of retainer remains the property of the client and, therefore, must be deposited in a trust account and kept separate from the lawyer’s own property until the lawyer applies it to charges for services that are actually rendered. Dowling at *6. Any unused portion of the retainer is refunded to the client under Rules 1.15(b) and 1.16(d) of the Illinois Rules of Professional Conduct. Dowling at *12.

(3) An advance payment retainer consists of a present payment to the lawyer in exchange for the commitment to provide legal services in the future. Ownership of this retainer passes to the lawyer immediately upon payment. Dowling at *6, 11.

I don't think I've ever used anything but a "security retainer." Anyone using the others much??

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