7.4 – Types of Retainer Agreements

Standard Retainer Agreements

The Law Society of Saskatchewan Rules (Rule 1901) speak to two particular types of retainer agreements. The first one referred to and the most common type used by lawyers is an agreement which provides that you are retained by a client to act on the client’s behalf for one or more specific matters. The second type included in the definition is one where you are retained for a defined period and for an agreed sum.

If you enter either of these types of agreements, you’ll want it to cover much of the same content as discussed in the previous pages, but the agreement must also meet certain requirements. According to Rule 1905, these types of retainer agreements:

• must be in writing,
• must clearly and unequivocally specify:
  • the term of the agreement,
  • whether any additional fees or disbursements will be charged, and
  • what specific matters are covered by the agreement, and
• must not mislead clients in any way regarding the services covered by the agreement.

Regardless of the type of retainer agreement you enter into with the client, if you receive a financial retainer amount from the client, any retainer funds that you receive are considered trust funds and must be treated as such. [Rule 1905(3)]

Limited Scope Retainers

It is possible to be retained to provide legal services for part, but not all, of a client’s legal matter. This is also referred to as “unbundling”. For example, a lawyer may provide confidential drafting assistance, make limited court appearances, or perform other discrete tasks for a client without representing the client in all aspects of their matter.

Be aware of the risks associated with limited retainers. You continue to have an ethical duty to perform all legal services to the standard of a competent lawyer. Commentary 7A to Section 3.1-2 of the Code states:

When a lawyer considers whether to provide legal services under a limited scope retainer the lawyer must carefully assess in each case whether, under the circumstances, it is possible to render those services in a competent manner. An agreement for such services does not exempt a lawyer from the duty to provide competent representation. The lawyer should consider the legal knowledge, skill, thoroughness, and preparation reasonably necessary for the representation. The lawyer should ensure that the client is fully informed of the nature of the arrangement and clearly understands the scope and limitation of the services.

Section 3.2-1A of the Code sets out your specific ethical obligations in respect of a limited scope retainer. It provides:

Before undertaking a limited scope retainer the lawyer must advise the client about the nature, extent and scope of the services that the lawyer can provide and must confirm in writing to the client as soon as practicable what services will be provided.

Thus, if you are entering into a limited retainer agreement, make sure it is carefully worded and that your client:

• appreciates the limited nature of the retainer,
• understands the risks involved, and
• enters into the limited retainer with informed consent.

The commentary to Section 3.2-1A also advises that when you are providing legal services under a limited scope retainer you should carefully consider:

• whether to disclose the limited nature of your retainer to any tribunal before which you appear, so as not to mislead the tribunal, and
• how communications from opposing counsel will be managed.

Discuss these matters with your client.

Optional Reading: You can find out more about limited scope retainers and other types of unbundled legal services, such as legal coaching, here.