Please explain the differences between an advance and a retainer, and why it matters.
What will be an ideal response?
An advance is a prepayment of future legal services yet to be rendered by the lawyer. It is
akin to a downpayment to an attorney. An advance is a refundable payment because
advances are earned through the lawyer’s efforts. Therefore, if the lawyer-client relationship
ends before the lawyer has fully earned the advance, the lawyer is required to return any
unearned portion. Both the Model Rules and Model Code require lawyers to return any
unearned portion of an advance payment.
A retainer, which is sometimes referred to as a general retainer, is a payment made to secure
a lawyer’s availability. A retainer is technically earned upon payment because it is not made
for any specific legal services, but for the general purpose of guaranteeing a lawyer’s availability or ensuring that the lawyer will not be available to an opposing party. Think of a
retainer as paying for a car that might never be driven. The distinctions between an advance
and a retainer are important because retainers have historically been thought of as
nonrefundable. But some courts have recently begun to question the legitimacy of
nonrefundable retainers, because such retainers are so drastic.
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