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Note: Links to our free templates are at the bottom of this long guide.
Also note: This is not legal advice

Introduction

Creating a retainer agreement can be an essential part of protecting both parties in any professional relationship. It is a legally binding document that outlines the roles, responsibilities, and expectations between the client and attorney or other professional working on a retainer basis. Having such an agreement in place can help ensure that everyone understands the scope of work being performed and the fees being charged, as well as provide clarity to all involved parties.

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Definitions

Scope of Services: The range of duties and tasks that must be completed as part of a service agreement.
Payment Terms: The conditions related to payment, such as amount, frequency, and method.
Termination: The process of ending an agreement or contract.
Confidentiality Clause: A statement in a contract that requires parties to keep certain information private.
Dispute Resolution: The process of settling disagreements between parties.
Ownership Rights: The legal ownership of intellectual property created during a contract.
Compliance with Laws: Abiding by applicable laws and regulations.
Indemnity Clause: A statement in a contract that holds one party responsible for losses or damages incurred by another.
Non-Compete Clause: A statement in a contract that prohibits one party from providing services to a competing business.
Non-Disclosure Clause: A statement in a contract that requires parties to keep certain information private.

Contents

1. Defining the Scope of Services
2. Outlining what services are expected to be provided and their duration
3. Specifying the specific deliverables or outcomes expected from the services
4. Establishing a timeline for completion of each service
5. Establishing Payment Terms
6. Agreeing on the payment terms such as frequency, amount, and method of payment
7. Deciding how payment will be made and how much notice is needed before any changes
8. Addressing Termination
9. Specifying how the agreement can be terminated by either party
10. Clarifying what will happen to any unfinished services
11. Establishing a notice period before termination
12. Including a Confidentiality Clause
13. Ensuring that any confidential information that may be shared is kept private
14. Clarifying who is responsible for protecting the confidential information
15. Establishing Dispute Resolution
16. Deciding on how any disputes will be resolved
17. Establishing a process for resolving disputes
18. Specifying what will happen if a dispute cannot be resolved
19. Clarifying Ownership Rights
20. Outlining who owns any intellectual property created during the retainer agreement
21. Deciding who will have the rights to use any intellectual property created
22. Specifying Compliance with Laws
23. Agreeing on who will be responsible for ensuring compliance with applicable laws
24. Clarifying which laws will apply to the agreement
25. Including an Indemnity Clause
26. Establishing who is responsible for any losses incurred due to negligence or other causes
27. Specifying any other liabilities that are to be indemnified
28. Establishing a Non-Compete Clause
29. Agreeing that the contractor will not provide services to any competing business
30. Specifying a time period during which the non-compete should apply
31. Establishing a Non-Disclosure Clause
32. Agreeing that the contractor will not disclose confidential information
33. Specifying what information is considered confidential and should not be disclosed

Get started

Defining the Scope of Services

• Clarify who the retainer agreement is between and the duration of services
• Determine the scope of services to be provided by the parties involved
• Define the expectations of both parties
• Set out the fees to be paid and when they are due
• Outline the process for ending the retainer agreement

You can check off this step when you have all the details listed above clearly stated in the retainer agreement.

Outlining what services are expected to be provided and their duration

• List the services that you expect the contractor to provide during the duration of the retainer agreement.
• Describe the services in as much detail as possible, including the time frame they are to be completed within.
• Identify the payment terms associated with each service, such as a fixed fee or hourly rate.
• Specify the duration of the agreement and any renewal or termination provisions.
• Outline any additional services that may be added to the agreement during its duration.
• When you have completed outlining all services expected to be provided and their duration, you can check this off your list and move on to the next step.

Specifying the specific deliverables or outcomes expected from the services

• Write down the specific deliverables or outcomes that are expected from each service.
• Consider the scope of each deliverable, including factors such as time, cost, and resources.
• Make sure all deliverables are measurable and achievable.
• Ensure that all deliverables are clear and concise.
• Once the deliverables are specified, review and make sure all parties agree on the deliverables.
• Once all parties have agreed on the deliverables, finalize the retainer agreement.
• Check off this step from your list and move on to the next step.

Establishing a timeline for completion of each service

• Decide on a timeline for each service to be completed and make sure to list out the deliverables and outcomes that need to be completed in order to fulfill the agreement.
• Specify the timeline for each service, including the start date and end date for each deliverable or outcome.
• Ensure that both parties agree on the timeline and the deliverables and outcomes to be completed.
• Include clear language on the agreement that states that if one party misses the deadline, the other party will have the right to terminate the agreement.
• Once the timeline is established and agreed upon by both parties, this step can be checked off the list and the next step can be completed.

Establishing Payment Terms

• Identify the payment terms you will use for the retainer agreement. This should include the payment amount, frequency, and method of payment.
• Discuss these terms with the other party to ensure that both parties are in agreement before moving forward.
• Document the payment terms in the retainer agreement.
• Once the payment terms have been established, you can move on to the next step of agreeing on the timeline for completion of each service.

Agreeing on the payment terms such as frequency, amount, and method of payment

• Draft a retainer agreement that outlines all of the payment terms
• Make sure the agreement clearly states the frequency, amount, and method of payment
• Get the agreement signed by both parties
• Once the agreement is signed, you will know that you have successfully agreed upon the payment terms and can move on to the next step.

Deciding how payment will be made and how much notice is needed before any changes

• Outline the payment structure and frequency in the agreement
• Specify the amount of payment and method of payment
• Establish a notice period for any changes in payment terms
• Make sure both parties agree to the payment structure and notice period
• Make sure this is clearly stated in the agreement

Once you have outlined the payment structure, frequency, amount, method of payment and the notice period for any changes in payment terms you can move on to addressing termination.

Addressing Termination

• Decide the terms for termination of the agreement, including a notice period for either party.
• Decide whether the agreement can be terminated without cause and if so, whether there will be any penalty or costs associated with it.
• Decide whether there will be any restrictions on either party in the event of termination, such as restrictions on soliciting clients or employees.
• Decide whether there will be any non-disclosure or non-compete provisions in the event of termination.
• Include any termination provisions in the retainer agreement.

You have completed this step when you have addressed all of the necessary elements of termination in the retainer agreement.

Specifying how the agreement can be terminated by either party

• Outline the terms of termination for both parties by adding a clause to the agreement
• Include a timeline for either party to provide notice of termination, as well as any other relevant details
• Confirm that the client and the service provider both agree to the terms of termination
• Once the clause is added and both parties have agreed to the termination terms, the step is complete and you can move on to the next step.

Clarifying what will happen to any unfinished services

• Decide on what happens to services that are not completed by the end of the agreement
• Examples of unfinished services include: projects that are not completed, work that is not finished, and services that are not provided
• Draft language that outlines the consequences of any unfinished services and add it to the agreement
• This language should include how the parties will decide on any payment owed for unfinished services
• Once you have drafted the language and added it to the agreement, you can check this step off your list and move on to the next step.

Establishing a notice period before termination

• Establish a notice period before termination of services in the retainer agreement. This will ensure that both parties are aware of their commitments when terminating the agreement.
• Consider and decide on a reasonable period of notice for both parties to give and receive before terminating the agreement.
• Include this agreed-upon notice period in the retainer agreement and ensure both parties are clear on the time period and consequences of not adhering to it.
• Once the notice period has been included in the retainer agreement, you can check off this step and move on to the next one.

Including a Confidentiality Clause

• Research the applicable laws in your jurisdiction to understand the legal requirements for a confidentiality clause
• Review your client’s industry and the types of information that may need to be protected
• Draft a confidentiality clause that outlines what information is to be kept confidential and for how long
• Ensure that both parties agree to the confidentiality clause, and have the agreement signed and dated
• Check off this step once the confidentiality clause is agreed upon and the agreement is signed and dated.

Ensuring that any confidential information that may be shared is kept private

• Include provisions in the agreement that clearly state confidential information must not be disclosed to anyone outside of the company
• Draft a clause that specifies the duration of the confidentiality obligation
• Include a clause that defines the responsibilities of both parties regarding the confidential information that may be shared
• Make sure to include a clause that specifies the consequences of a breach of the confidentiality agreement
• Once you have included these provisions, you can check this step off your list and move on to clarifying who is responsible for protecting the confidential information.

Clarifying who is responsible for protecting the confidential information

• Identify the parties responsible for protecting confidential information.
• Draft a document that outlines the responsibilities of each party in protecting confidential information.
• Ensure that the document clearly indicates who is responsible for protecting confidential information and how they must do it.
• Create a mechanism to monitor compliance with the document’s requirements.
• Obtain the agreement of all parties to the document.

Once you have identified, drafted, and obtained agreement on the responsibilities of each party in protecting confidential information, you can move on to the next step of establishing dispute resolution.

Establishing Dispute Resolution

• Research the different methods of dispute resolution and decide which approach is best for the retainer agreement.
• Consider the cost of each method, the time it may take to resolve, and the effectiveness of each approach.
• Include in your retainer agreement the chosen method of dispute resolution and any associated costs.
• Once you have established the dispute resolution approach, you can check this off your list and move on to the next step.

Deciding on how any disputes will be resolved

• Outline the process for dispute resolution, such as arbitration, mediation, or small claims court
• Set deadlines for filing a dispute, and the time limit for resolution
• Identify the governing law that will be applied to the dispute
• Decide which court or arbitration system will be used to resolve the dispute
• Include a clause that requires both parties to attempt to resolve the dispute in good faith before taking legal action
• When you’re done, make sure you have outlined a clear process for how disputes will be handled
• Once you have finished this step, you can move on to the next step of establishing a process for resolving disputes.

Establishing a process for resolving disputes

• Agree on a dispute resolution process. This could include arbitration, mediation, or a combination of the two.
• Consider including a section in the retainer agreement that states the process that will be used in the event of a dispute.
• Decide on a timeline for the resolution process.
• Include any fees associated with the resolution process.
• Specify that the parties will abide by the result of the resolution process.
• Once all of the above has been agreed upon, document it in the retainer agreement.

You can check this step off your list once the dispute resolution process has been agreed upon by both parties and included in the retainer agreement.

Specifying what will happen if a dispute cannot be resolved

• Identify a mutually agreed-upon third-party mediator to intervene in the case of a dispute
• Insert a clause in the retainer agreement that states both parties will agree to comply with the decision of the mediator
• Decide on the scope of the mediator’s powers, such as whether they can make a binding decision or merely provide a recommendation
• Document in the agreement that both parties are bound to the decision of the mediator, and that any costs associated with the mediation will be split evenly

Once these steps are completed, you can check this off your list and move on to the next step.

Clarifying Ownership Rights

• Understand the applicable copyright laws in the jurisdiction in which the retainer agreement is made
• Research the legal requirements for protecting ownership rights
• Draft the retainer agreement to accurately reflect the ownership rights of both parties
• Include language that specifies the ownership rights of each party
• Review the retainer agreement with a lawyer to ensure accuracy
• Sign and date the retainer agreement

Once you have done all of the above, you can move on to the next step in creating your retainer agreement, which is outlining who owns any intellectual property created during the retainer agreement.

Outlining who owns any intellectual property created during the retainer agreement

• Set out the scope of the intellectual property in the retainer agreement
• Identify who owns the intellectual property created during the term of the retainer agreement
• Consider whether the contractor or the client will have the right to use any intellectual property created
• Make sure the retainer agreement includes provisions to ensure that the contractor will not have the right to use any intellectual property created outside of the scope of the retainer agreement
• When these provisions have been included in the retainer agreement, check this step off your list and move on to the next step.

Deciding who will have the rights to use any intellectual property created

• Consider the scope of the intellectual property that will be created during the retainer agreement
• Decide which party will have the rights to use any intellectual property created during the agreement
• Establish a timeline for when the rights to the intellectual property will be transferred to the other party
• Document any restrictions on the use of the intellectual property
• Include a clause stating that any intellectual property created during the retainer agreement must be free of third-party claims

You will know when you can check this off your list and move on to the next step when you have documented a clear agreement on who will have the rights to use any intellectual property created during the retainer agreement.

Specifying Compliance with Laws

• Determine what laws are applicable to the retainer agreement, such as any local, state, or federal laws related to the services being provided or the goods being exchanged.
• Consult with a lawyer or other legal expert to determine which laws may be applicable to the retainer agreement.
• List the applicable laws in the retainer agreement.
• Specify that the parties to the retainer agreement will comply with all applicable laws.
• Once all the applicable laws have been listed in the retainer agreement and compliance has been specified, you can check this step off your list and move on to the next step.

Agreeing on who will be responsible for ensuring compliance with applicable laws

• Decide who will be responsible for ensuring the agreement complies with applicable laws.
• Identify who will be in charge of researching any applicable laws that may apply to the agreement.
• Consider whether you will need legal assistance to ensure compliance with applicable laws.
• Discuss with the other party what their responsibilities will be for ensuring compliance with laws applicable to the agreement.
• Document in the agreement who will be responsible for ensuring compliance with applicable laws.
• Once all of the above steps have been completed, you can check this off your list and move on to the next step.

Clarifying which laws will apply to the agreement

• Research the applicable laws for your retainer agreement. Consider the location of the parties, the type of work to be performed, and any other relevant factors.
• Make sure both parties are aware of which laws will apply to the agreement and understand how they may impact the relationship between the parties.
• Make sure the agreement includes a clear provision regarding which laws will apply to the agreement and any disputes arising from it.
• Once you have completed this step, you can move on to including an indemnity clause in the agreement.

Including an Indemnity Clause

• Research state laws to determine if indemnity clauses are allowed
• Draft an indemnity clause that’s in accordance with applicable laws
• Make sure the indemnity clause specifies which party is responsible for damages
• Ensure that the indemnity clause does not include language that would render it void or unenforceable
• Review the indemnity clause with a lawyer to ensure it is legally valid

Once the indemnity clause is drafted, reviewed and finalized, this step is complete and you can move on to the next step.

Establishing who is responsible for any losses incurred due to negligence or other causes

• Outline an agreement between the parties as to who is responsible for losses that occur due to negligence or other causes
• Clearly define the party responsible for losses in the agreement
• Include the specific language of the agreement in the retainer agreement
• Make sure the agreement is signed by both parties
• Once both parties have signed the agreement, you can move on to the next step in creating the retainer agreement.

Specifying any other liabilities that are to be indemnified

• Establish the scope of the indemnification. This should include all liabilities associated with the performance of the services under the retainer agreement.
• Identify and list any liabilities that are not to be indemnified, such as those arising from gross negligence or willful misconduct.
• Specify any additional liabilities that are to be indemnified. This may include any liabilities related to intellectual property or breaches of contract.
• Make sure to note any limitations on the indemnification. This may include a limitation on the amount of damages for which the parties will be held liable.
• Once you have listed all of the liabilities that are to be indemnified, you can include the provisions in the retainer agreement.

You will know you have completed this step when the retainer agreement includes a section that outlines the scope of indemnification, any liabilities that are not to be indemnified, and any additional liabilities that are to be indemnified.

Establishing a Non-Compete Clause

• Make sure that the scope of the non-compete clause is reasonable and enforceable under the applicable laws
• Outline the geographic scope of the non-compete clause
• Outline the time period of the non-compete clause
• Specify any other restrictions related to the non-compete clause
• Make sure the contractor agrees to the non-compete clause

When you can check off this step:

• When you have established a reasonable, legally enforceable non-compete clause that both parties agree to and that is in writing.

Agreeing that the contractor will not provide services to any competing business

• Discuss the implications of a non-compete clause with the contractor to ensure they are aware of their obligations.
• Outline the competing business and areas in which the contractor must not provide services to competing businesses.
• Draft a written agreement that further clarifies the non-compete clause and have both parties sign the agreement.
• Once both parties have signed the agreement, the step is complete and you can move on to the next step of specifying a time period during which the non-compete should apply.

Specifying a time period during which the non-compete should apply

• Specify the start and end dates of the non-compete agreement.
• Make sure to include the exact dates of the duration of the non-compete agreement, taking into account the amount of time that is reasonable for the contractor to refrain from competing with the business.
• When the start and end date have been agreed upon and the duration is reasonable, the time period for the non-compete should be included in the retainer agreement.

You’ll know you have completed this step when you have included the time period of the non-compete agreement in the retainer agreement.

Establishing a Non-Disclosure Clause

• Include a clause that states both parties agree not to disclose confidential information
• Specify the types of information to be treated as confidential
• Describe the types of activities that would constitute a breach of the non-disclosure clause
• Determine the penalty for a breach of the non-disclosure clause
• Have both parties sign and date the agreement

When you’ve completed this step, you can check it off your list and move on to the next step of specifying a time period during which the non-compete should apply.

Agreeing that the contractor will not disclose confidential information

• Determine the specific information that must be kept confidential
• Draft a clause in the agreement that prohibits the contractor from disclosing confidential information
• Get the agreement signed by both parties to confirm the contractor’s commitment to keep the confidential information secure
• Keep copies of the agreement for your records
• Once all parties have signed the agreement, you can move on to the next step.

Specifying what information is considered confidential and should not be disclosed

• Read the contract and make sure all parties agree on the definition of confidential information.
• Identify what types of confidential information must be kept secret and make a list of all the information that qualifies.
• Include a clause in the contract that states that all parties acknowledge and agree to keep the confidential information secret.
• Make sure that both parties agree to the terms and conditions regarding the confidential information.
• When all parties have agreed to the terms and conditions regarding the confidential information, check off this step and move on to the next step.

FAQ

Q: What is the difference between a retainer agreement and a contract?

Asked by Francis on April 9th, 2022.
A: A retainer agreement is a specific type of contract that defines the work to be done and the payment structure between an attorney and their client. It can also include provisions for how often the client will be billed, when payment is due and other services that the attorney may provide. A contract, on the other hand, is a broader agreement between two or more parties for the exchange of goods or services.

Q: What happens if one of the parties does not abide by the terms of the agreement?

Asked by Abigail on May 22nd, 2022.
A: If one of the parties fails to fulfill their obligations as outlined in the retainer agreement, they may be subject to legal action. Depending on the severity of the breach, this could include fines, damages or even criminal penalties. Furthermore, a breach of contract could lead to the dissolution of the contractual relationship itself.

Q: Are there certain restrictions or regulations for retainer agreements in different countries?

Asked by Brandon on June 10th, 2022.
A: Yes, different countries have varying laws surrounding retainer agreements. Generally speaking, in most countries, both parties must enter into a retainer agreement in good faith and with clear understanding of all terms and conditions. Moreover, certain countries may have specific regulations and laws that must be abided by when creating a retainer agreement. Therefore, it is important to research the relevant legislation in your location before entering into any such agreement.

Q: How long should a retainer agreement last?

Asked by Sarah on July 3rd, 2022.
A: The length of a retainer agreement will depend largely on the specifics of each case. Some agreements may be tailored to last only a few months while others may be designed to last many years. Ultimately, it is up to the parties involved to decide how long they would like their retainer agreement to last before renegotiating or ending it altogether.

Q: Who should be included in a retainer agreement?

Asked by Jacob on August 19th, 2022.
A: Generally speaking, only those who are directly involved in providing or receiving services should be included in a retainer agreement. This includes both attorneys and clients or other individuals who are involved in providing services as part of the agreement. If necessary additional parties such as witnesses may also be included in order to ensure that all parties comply with the terms of the agreement.

Q: What are some common clauses for retainer agreements?

Asked by Elizabeth on September 8th, 2022.
A: Common clauses for retainer agreements typically include provisions for payment structure and frequency, fees for additional services rendered beyond what was initially agreed upon, confidentiality obligations between both parties and termination conditions which outline what actions must be taken if either party decides to end the agreement prematurely. Additionally, depending on the nature of services being provided some agreements may also include clauses that ensure compliance with applicable laws and regulations or clauses that limit liability in certain circumstances.

Q: Can I make changes to an existing retainer agreement?

Asked by Matthew on October 24th, 2022.
A: Generally speaking it is possible to make changes to an existing retainer agreement so long as all parties involved agree to do so in writing. However, it is important to note that any changes made should still abide by applicable laws and regulations as well as any other provisions that were initially agreed upon when creating the original agreement. Furthermore, depending on the nature of changes it might also be necessary for all parties involved to sign off on any modifications or additions made before they go into effect.

Q: Is there any instance in which I can terminate a retainer agreement?

Asked by Lauren on November 11th, 2022.
A: Depending on what was initially agreed upon when creating a retainer agreement there might be certain circumstances under which either party can terminate it prematurely without incurring any legal consequences or penalties. Typically these circumstances are outlined within termination conditions which are included within most agreements so make sure you read over them carefully before entering into an agreement with another party so you know exactly what can and cannot be done if you ever decide you need to end your contractual relationship early.

Q: Is there any way I can protect myself from liability under a retainer agreement?

Asked by John on December 28th, 2022.
A: Yes, depending on what you are agreeing upon when creating your retainer agreement there might be certain provisions which can help protect you from potential liability issues down the line such as limiting liability clauses which specify what types of damages or losses can and cannot be recovered from either party if something goes wrong during performance of services under your contract. Additionally it is always important to make sure that both parties have clear understanding of all terms and conditions before signing off on an agreement so that everyone knows exactly what they are responsible for if something does go wrong at some point down the line.

Q: Are there any special considerations I need to make when creating a retainer agreement for international work?

Asked by Jameson on January 15th, 2023
A: Yes, when creating a retainer agreement for international work you need to ensure that all applicable laws and regulations relevant to both countries involved are taken into account as well as any additional stipulations related to international trade specific to that region or country such as tariffs or customs duties which might apply when exchanging goods or services across borders. Additionally it is also important for both parties involved to thoroughly research their respective legal systems so they know exactly what rights each party has under their local law as well as any potential complications which could arise from entering into an international business arrangement before signing off on an agreement with one another .

Example dispute

Suing a Company for Breach of Retainer Agreement

• Plaintiffs may sue a company for breach of retainer agreement if the company failed to abide by the provisions outlined in the agreement.
• The plaintiff must prove that the defendant had an obligation to fulfill the retainer agreement, and that the defendant failed to do so.
• The plaintiff must also show that they suffered financial damages as a result of the defendant’s breach.
• The plaintiff could seek to recover the money they paid for the retainer agreement, as well as any additional financial losses.
• The plaintiff could also seek an injunction ordering the defendant to comply with the terms of the retainer agreement.
• The court may also award punitive damages if the defendant acted in bad faith or was grossly negligent.
• Settlement may be reached through mediation or arbitration, or the court may decide on an award. Damages can be calculated based on the court’s interpretation of the agreement.

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