A legal retainer, and how to make it pay

Most businesses reach for a retainer at the point legal work stops being an event and starts being a rhythm. The useful test is not how many contracts you sign. It is how often somebody in the business has a question and does nothing about it.

Three signals, and any two of them usually mean a retainer is the right shape.

1. Frequency. Something legal comes up most weeks - a customer contract, a supplier's terms, an employment question, a query about what you can say in marketing.
2. Deferral. Questions get parked because nobody wants to trigger an hourly bill for something which might take five minutes to answer. This is the expensive one, because the cost is invisible until it is not.
3. Speed. You need answers in days rather than weeks, and the deal moves faster than a procurement process for legal advice.

If legal work arrives twice a year in large lumps, a retainer is the wrong instrument and paying per matter is cheaper. That is a real answer, not a disclaimer.

There are four routes to ongoing legal support, and the difference between them is mostly about who carries the cost of your quiet months.

1. Hire in-house. A permanent lawyer, fully loaded with salary, employer NICs, pension, holiday, software and recruitment. For a commercial solicitor with real experience this is a six-figure commitment before anyone has reviewed a contract. It buys availability and context nothing else matches, and it is the right answer above a certain size.
2. Retain. A fixed monthly fee for the routine work, agreed in advance. You carry no employment risk and no recruitment cycle, and the cost is predictable enough to budget.
3. Pay per matter. Instruct a firm when something happens. Cheapest in a quiet year, and the arrangement most likely to leave small questions unasked.
4. Buy a bundle. HR and employment providers sell fixed monthly packages with helplines and tribunal cover. Genuinely good at what they do, and a different product from a commercial solicitor - see what an employment law retainer actually covers.

The honest comparison is the second against the first, because that is the decision most businesses are actually making. Do you need an in-house lawyer? works through it properly, and fractional general counsel covers the senior end of the same question.

Everything which goes wrong with a retainer goes wrong here, and it goes wrong in one direction: the scope was vague, both sides assumed generously in their own favour, and the disagreement arrived at the worst possible moment.

Four things a retainer agreement has to say plainly.

1. What is in. Not "legal advice" but the actual work - contract review, standard document drafting, commercial and employment questions, a periodic review of where you stand.
2. What is out. The harder half, and the one usually left blank. Project work sits outside a routine retainer: a company sale, due diligence, a share scheme, litigation, a bespoke set of terms drafted from scratch.
3. How fast. A response time you can plan around, and an escalation route for the thing which cannot wait.
4. What happens at the edge. When something falls outside, are you told before the work starts, or invoiced after? There is only one acceptable answer and it is worth seeing in writing.

Silva's own retainer states the scope at the outset and flags anything outside it before proceeding rather than after. That is not a generous gesture; it is the only version of this which works, because the alternative is a surprise invoice and a lost client.

This is the part nobody writes about, and it is where the money actually is. Businesses which get poor value from a retainer are almost never the ones asking too much. They are the ones who signed it, felt reassured, and carried on exactly as before.

Four habits separate the two.

1. Let more than one person ask. If every query has to route through the founder, most queries die. Name two or three people who can go direct.
2. Ask early and badly. A two-line question before the call is worth more than a tidy summary after the deal is agreed. Advice is cheap while the position is still moveable.
3. Send the whole thing. The email chain, the earlier version, the thing you are worried about. Partial facts produce partial answers, which is the most common cause of advice being wrong.
4. Say when a deadline is real. Everything is urgent and almost nothing is. Being specific about what actually moves gets the right thing prioritised.

The test after six months is not whether you have used your allocation. It is whether anyone in the business now asks before doing something, instead of after.

A retainer scoped for a ten-person business is the wrong shape at forty, and nobody notices until the relationship is either straining or coasting.

Review annually as a matter of course, and immediately on any of these: a funding round, a first overseas customer, a first consumer customer, a step change in contract size, an acquisition, or a claim which the arrangement handled badly.

Three outcomes are all legitimate. Increase it, because the volume has genuinely grown and you are rationing. Reduce it, because the business has stabilised and the work is now lumpy rather than constant. Or end it, because you have grown into an in-house hire - which is a success, not a failure, and any adviser treating it as the latter is telling you something about themselves.

What matters is that the review happens on a date rather than in a moment of frustration.