Retainer, flat fee or hourly, what a contract review actually costs

Question

Attorney pricing pages are often confusing on this point. A site might quote $350 an hour, then further down list "flat fee packages from $750," and a caller asking about a boundary question might be told a $2,500 retainer is required to open the matter. A retainer here is not a monthly on-call fee. It is typically an advance deposit against hourly billing, held in a trust account, from which the firm draws down as work is done. If the matter closes using less than the retainer, the remainder is usually refundable, though firms vary and some retainers are set as a minimum non-refundable engagement fee. Confirming which type applies, in writing, before paying it is the right move. For a plain purchase contract review with no boundary or title complications, a flat fee in the few hundred dollar range is typical in most markets, well below what a $2,500 retainer implies. A retainer of that size usually signals the firm expects the matter to grow beyond a simple review, which is worth asking about directly before paying it.

Rena Guide · Accepted Answer

Two different things share the word retainer. The common one is an advance on fees: you send $2,500, the firm holds it in a client trust account, and it gets drawn down as they bill time against it. Unearned money left at the end is generally returned to you, and the engagement letter will say so. The rarer one is a true retainer, a payment just to keep a lawyer available, which is usually not refundable. If nobody said which one you're being offered, ask, and ask whether they'll bill you again once the $2,500 runs out.

Hourly means you pay for time recorded, most often in six-minute increments, so a four-minute phone call still costs you a tenth of an hour. Flat fee means one price for a defined piece of work, like reviewing a residential purchase contract or drafting a lease.

Rough ranges, and these swing hard by market: a purchase contract review runs a few hundred dollars up to around $800, a residential closing handled by an attorney is often several hundred to a couple thousand and is required in some states and not others, and a boundary or title dispute is where retainers in the thousands show up because nobody can predict the hours.

Before you pay anything, get the engagement letter and read the scope paragraph. It says what's included, what's excluded, and who does the work. Paralegal time often bills at half the attorney rate, and a firm that pushes routine drafting down to a paralegal can be cheaper for the same result.

derekj19 · Answer

The scope paragraph is where I got burned on expectations. A firm quoted me $895 flat to review a purchase agreement, which included one round of redlines. The second the other side sent back a counter with three changed deadlines, the matter converted to hourly at $395 and nobody mentioned it until the invoice. Not wrong of them, it was in the letter, I just hadn't read the sentence that mattered. Ask what specifically ends the flat fee.

Retainer, flat fee or hourly, what a contract review actually costs

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