Do I need an Employment Solicitor on retainer?
Posted on 17th April 2023 at 11:16
Employers often ask about retainer agreements for legal services. While there are benefits to a retainer agreement, some clients simply assume it is the ‘done thing’ and only option.
We feel that retainers, whilst useful in some circumstances, may not be the best option for our clients. Instead, we usually charge by the time it takes to work on the case.
To help us explain why, it’s helpful to be clear about what we mean by a retainer. There are a few ways these agreements can work:
Clients pay for a set number of hours each month. Hours not used will be banked for future use. When an issue arises, clients use their banked hours and then pay for any additional time.
Clients pay a monthly fee for an agreed service. This works well if there are regular tasks and a consistent workflow, but this is rarely the case for employment law.
Clients pay a monthly fee no matter how much work is needed. This is a bit of a gamble – if you need a lot of support, this will be good value, but if you don’t have any issues, you won’t get much in return for your money.
Clients pay a monthly fee to maintain the relationship, then pay additional fees for work done. The monthly fee may include some additional entitlements, such as discounted rates, phone calls for preliminary advice or training resources.
Why we charge hourly
Value for money
It is difficult to predict how much support you will need, especially if your business is newly established or has grown rapidly. An agreement might be based on the size of your business, your industry or the number and type of disputes you have faced in the past. But each business is individual, so these aren’t good predictors. This means pricing can be based on guesswork rather than likely usage.
Remember that law firms are businesses and are unlikely to provide services at a loss. In most cases, retainers provide great value for some clients but less value for others.
Few SMEs have a consistent, monthly need for an employment solicitor. It is more likely that you will go months without needing us and then, when there is an issue, you will need a lot of support. Retainers for a set number of hours per month are still based on an hourly rate, and it is likely you will pay for additional time if a dispute escalates, as tribunal cases can be extremely time-consuming.
Even if your hours can be banked, you may still lose them if you don’t use them in a set period. You’re also unlikely to move providers while you have a bank of hours you have already paid for, so this works as another bind.
If you experience a lot of disputes, it might be more valuable to invest in new policies, contracts, or training for your HR department. This will reduce the risk of disputes and help management resolve them more effectively, saving you money on legal fees and building a better work environment.
We can offer bespoke training to combat issues that arise regularly, as well as on-site drop-in clinics and updates on the latest legislation.
We often hear from businesses that are stuck in long contracts for a service they’re unhappy with. Some choose to instruct us as well and end up paying twice to receive good advice.
We prefer that our clients return because they are happy with our service, not because they are tied into a contract. And we have confidence that this is the case - we currently get 15-20% of our work from returning clients without needing a retainer.
All firms have a range of experience. If your case is complex or unusual, you are likely to need a more senior solicitor. Or if the issue needs resolving urgently, a senior solicitor may be able to use their experience to wrap the matter up quickly.
Retainer agreements should be clear about what will happen in these cases. Will the work be done by a junior solicitor under instruction, or will you be asked to pay additional costs? Maybe the rate you are paying is between a junior and senior rate, to allow for involvement from a senior solicitor - if so, does it still represent good value if you only ever need a junior solicitor? The certainty of a retainer would be lost if you face surprise additional costs, and you might not have time to negotiate unexpected additional costs.
When paying hourly, you know who is working on your case and what work they are doing. Most of our cases are handled by experienced, specialist Associate Solicitors, and you will only pay Principal Solicitor rates if necessary. We will also advise if your case can be managed by our Senior Paralegal.
There’s no room for oversights
Retainer agreements usually last for a set period, and some may automatically renew. If you wish to shop around for the best value, you will need to be aware of the end date and notice period and have time to do the research.
Accidentally allowing the agreement to lapse could affect your entitlements. You might lose the hours you have banked. If a dispute began while your retainer had lapsed, you may not be entitled to certain services or discounts on work relating to the dispute. In this case, you would be paying a standard hourly rate for advice, with no benefit from the retainer.
You don’t have these worries when you pay for support as and when you need it.
The benefits of a retainer
There are some benefits to retainer agreements. The consistency of a retainer can make budgeting easier, and many clients like the reassurance of having an ongoing relationship with a solicitor. However, a retainer agreement isn’t always necessary.
Having a set outlay each month is easier to plan for. But if the agreement is for a set number of hours per month, there is always a risk that you will need additional hours should you experience a big problem. Even with a retainer, you will need a fund available for additional costs in case of an unexpected dispute.
Certainty has its benefits, but you also need some flexibility in business. If your needs change, for example through growth, downsizing or restructuring, you will want your retainer to change with it. If your contract does not allow for flexibility, you may end up paying a retainer for services you no longer need or paying additional fees and premiums for extra support.
It might be just as convenient to put the money for a retainer into savings, which may or may not be ringfenced for legal fees. This way, the money is available to fund legal advice when needed, but you won’t lose out if you don’t require legal advice.
The reassurance of having ‘a solicitor’
We’ve all heard TV characters say they’re going to call ‘their lawyer’. It’s reassuring to feel you have a strong relationship with an advisor who knows your business. But we don’t need a retainer to have a good relationship with our clients.
If you want to, you can stay in touch with us by adding the team on LinkedIn, subscribing to our monthly updates, or catching up with us at networking events. But it’s also fine to just call us when you need us, even if it has been years since we spoke. We’re still your solicitors, working in your best interests and we’re happy to spend some time with you to understand your situation.
Some clients feel reassured that a retainer will save time if an issue is urgent. But as specialists in employment litigation, we’re used to clients calling as a situation is kicking off, and we’re well-practised at providing a quick turnaround when needed. If you have instructed us before and were happy with our service, instructing us again doesn’t involve a long process.
What if we’re too busy?
Because of the nature of employment law, workflow is unpredictable. A retainer is no guarantee that your solicitor will have time set aside when you need them - it would be incredibly bad luck for all their retainer clients to face disputes at the same time, but not impossible.
We don’t give our solicitors huge caseloads or set high targets for billable hours, as we don’t believe this provides the best service. This means we will usually be able to take on your case without exceeding our maximum capacity. We work collaboratively as a team so, even if your normal solicitor is busy, one of our team will be able to take over smoothly. We also have a highly skilled and trusted consultant solicitor whose workload varies, to help adjust our capacity if needed.
And in the very unlikely chance we are too busy – it is best that we can quickly direct you to another solicitor without having to worry about the retainer.
Find out more about our hourly fees.
Get in touch
Tagged as: Employers
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