Does My Small Business Need a Lawyer on Retainer?

Small business owners often have to perform multiple jobs at once. Unlike large corporations that can afford to hire specialists to handle various administrative tasks, small businesses often rely on generalists. This approach can help save a small business money in the short run. However, business owners dealing with legal issues may need an experienced attorney to answer their legal questions.

Small businesses, start-ups, and entrepreneurs can get legal support with a local business lawyer on retainer. When legal challenges do come up, having a lawyer on retainer will make sure you have someone to handle your legal needs.

What Does On Retainer Actually Mean?

The word “retainer” has different meanings depending on state law. Most people think about a retainer as an advanced fee or deposit. “With those,” says Niloufar Park, a business lawyer at Opsera Law in Seattle, “you put it into a trust account — not unlike a savings or debit account.”

For example, “You put $1,000 into your account and it’s just going to sit there, says Park. “Then you buy a pair of shoes for $100, and you draw from that account for the amount that you use, and the rest earns interest or not, depending on the state. Once you are done shopping, the leftover money is still yours. You’re just setting it aside for your legal services.”

However, some states have a specific definition for retainers. “In Washington, retainer is a set amount that you agree to pay an attorney to be available at a specified period, but may not go toward any services,” says Niloufar Park, a business lawyer at Opsera Law in Seattle. This definition is not only commonly confusing for clients, but sometimes attorneys as well, she adds.

A retainer agreement helps ensure your access to a qualified attorney should an unexpected legal emergency arise. It means you will not be scrambling to find someone to give you legal advice if and when the need arises.

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How Common Are Legal Retainers for Business?

Retainers aren’t very common in Park’s experience, but attorneys do use advanced fees and will sometimes refer to them as a retainer fee.

“The advanced fee is in trust,” Park says. “It’s almost like you have invested in that relationship. You’ve budgeted for it, and when issues come up, then you just tap into your attorney, discuss the business issue, and that attorney already has an established relationship and knows your business and your goals and is ready to go to take on whatever it is that needs to get done.

“It provides for a more proactive type of relationship [than one that is] so reactive. I feel like a lot of times small businesses are putting out fires and they are very, very reactive. But this provides the opportunity to be more proactive—to budget, to plan, and really build the foundation that the business needs to get to the next level of growth.”

Why Might a Small Business Need an Attorney?

Legal problems include more than just potential lawsuits. There may be day-to-day legal matters, such as real estate or intellectual property issues. Large corporations generally have in-house legal counsel to handle these matters. However, small businesses do not have that luxury.

Many small businesses only think about using a lawyer for one-off legal help. They may consult an attorney about a contract or employment law issue. However, a legal retainer can make sure you have an attorney available whenever you have a legal issue and need guidance.

Whether you need a small business attorney is a complex topic. The law is constantly changing. Each year, Congress and the state legislatures adopt new laws that affect small businesses. There is also a host of federal and state regulatory agencies amending their own business regulations.

Just keeping up with these changes is a full-time job for a small business owner without proper legal training. Contacting a law firm and seeking legal advice from a business attorney can remove that burden and allow you to focus on running your business. It can also give you peace of mind to know you have access to your lawyer’s services for any business law disputes. Contact a local business attorney to find out about retainer fee options.