Retainer agreement

What is a retainer agreement?

A retainer agreement is the formal written contract establishing the terms of representation between an attorney and their client, including how fees, costs and the overall attorney client relationship itself will work.

In personal injury cases, this is typically a contingency fee agreement, meaning the attorney is paid a specific percentage of any recovery rather than being paid an hourly rate regardless of outcome.

New Jersey specifically requires this agreement to be in writing, and you are entitled to receive and retain your own copy of it once signed.

Reading this document carefully before signing, and asking questions about anything genuinely unclear, matters considerably given how significant its terms ultimately are to what you actually receive from any recovery.

What should a proper retainer agreement clearly address?

Several specific terms should be clearly and unambiguously addressed within the document itself.

• The specific contingency fee percentage, following New Jersey's applicable sliding scale
• Whether case costs are deducted before or after that fee is actually calculated
• Who bears responsibility for costs if the case is ultimately unsuccessful
• The general scope of the specific representation being undertaken
• How and under what circumstances the relationship might be terminated by either party

Why does the net versus gross cost calculation matter so significantly?

Because New Jersey generally computes the applicable contingency fee on the net recovery after case costs have already been deducted, rather than on the gross settlement figure itself.

This is more favorable to clients than the reverse approach some other jurisdictions permit, and confirming this specific calculation method is genuinely worth doing before signing anything.

The difference between these two calculation methods can be genuinely meaningful in a case involving substantial expert witness costs or other significant litigation expenses.

What should you ask before actually signing?

Whether costs are deducted before or after the fee is calculated, and specifically who bears responsibility for those costs if the case does not ultimately succeed.

How liens against any eventual settlement will actually be handled, and whether the firm will negotiate to potentially reduce them on your behalf.

What happens procedurally if you wish to change attorneys partway through the case, since the original firm may retain a claim for the value of work already genuinely performed.

Common questions

Does New Jersey require my fee agreement to be in writing?

Yes. New Jersey specifically requires this, and you are entitled to receive and keep your own copy of the signed agreement.

Can I negotiate the specific fee percentage in my retainer agreement?

The applicable sliding scale sets a maximum rather than a fixed required figure, so a lower percentage can potentially be negotiated, though a higher one would require specific court approval.

What if I am not satisfied with my attorney and want to switch firms?

This is generally possible, though the original firm may retain a claim for the value of work already performed, so discussing this specific situation with prospective new counsel is worthwhile.