What is a retainer fee?
A retainer fee is a deposit that a client pays to a lawyer before work begins. It sits in the lawyer's trust account — a separate account governed by LSO By-Law 9 — and is drawn down as the lawyer completes work and issues invoices.
The retainer is not a flat fee. It is not a payment for a specific number of hours. It is a pre-authorization deposit that:
- Secures the lawyer's commitment to represent you
- Gives the lawyer confidence to begin work without chasing payment
- Is held by the lawyer in trust — it still belongs to you until earned
- Is applied to invoices as fees are billed
- Must be refunded (unused portion) when the matter closes
Key point: Until your lawyer sends you an invoice and applies the fees against the retainer, that money is still yours. Under LSO By-Law 9, your lawyer cannot access trust funds without a completed invoice.
Types of retainer arrangements in Ontario
Trust retainer (most common)
A deposit held in trust and applied against fees as invoiced. You pay a lump sum upfront, the lawyer bills monthly (or per milestone), and deducts from the trust. When the matter closes, unused funds are returned.
Common for: Civil litigation, corporate transactions, ongoing family matters
General retainer
A fee paid to keep a lawyer available — not for specific matters. The client pays a monthly or annual amount in exchange for the lawyer's availability and priority access. Common for businesses that want a lawyer on call.
Common for: Business clients, in-house counsel supplements
Flat fee
A fixed price for a defined scope of work. Not technically a retainer — it is a fee for service. The lawyer quotes a total cost for the matter regardless of time spent. Common for will drafting, incorporations, and real estate closings.
Common for: Wills, real estate, incorporations, immigration applications
Contingency fee
The lawyer takes no upfront fee and instead receives a percentage of the settlement or award if successful. Only available for certain types of cases and is governed by LSO By-Law 9 and the Solicitors Act. The percentage must be disclosed in writing.
Common for: Personal injury, class actions (with LSO approval)
How trust retainers work under LSO By-Law 9
LSO By-Law 9 governs how Ontario lawyers must handle client trust funds. The rules exist to protect clients — specifically, to prevent lawyers from dipping into client money before fees are earned. Here is how the lifecycle of a trust retainer works:
Client pays the retainer
The deposit goes directly into the lawyer's mixed trust account — a segregated bank account that holds all client trust funds. It does not go into the lawyer's general operating account.
Lawyer completes work and issues an invoice
The invoice documents the work completed and the fees earned, usually with a time log showing hours worked and applicable HST.
Lawyer transfers earned fees from trust to general
After invoicing, the lawyer is permitted to transfer the invoiced amount from trust to their general account. This is called a trust-to-general transfer and must be documented in the client trust ledger.
Retainer replenishment (if required)
If the retainer is depleted before the matter closes, the lawyer may request a top-up. This should be specified in the engagement letter.
Matter closes — unused funds returned
At the close of the matter, any funds remaining in trust that have not been earned are returned to the client. The lawyer cannot retain unearned trust funds.
Typical retainer amounts by practice area in Ontario
Retainer amounts vary widely based on the lawyer's hourly rate, the anticipated complexity of the matter, and how quickly fees will accumulate. These are typical ranges — not fixed rates.
| Practice Area | Typical Retainer Range | Notes |
|---|---|---|
| Family law (separation) | $3,000–$10,000+ | Highly variable; contested matters go much higher |
| Civil litigation | $5,000–$20,000+ | Depends on court level and complexity |
| Employment (wrongful dismissal) | $2,500–$7,500 | Often on contingency instead |
| Corporate (M&A, financing) | $10,000–$50,000+ | Highly matter-dependent |
| Real estate (purchase/sale) | Flat fee $1,200–$2,500 | Usually flat fee, not retainer |
| Wills and estate planning | Flat fee $400–$1,500 | Usually flat fee per document |
| Immigration | $1,500–$5,000 | Varies by application type |
| Criminal defence | $5,000–$25,000+ | Summary vs. indictable matters |
These are estimates only. Actual retainer requirements depend on the specific lawyer, firm size, city, and matter complexity.
Common questions about Ontario legal retainers
Can my lawyer keep the retainer if they don't finish the work?
No. Under LSO By-Law 9, a lawyer can only transfer funds from trust to their general account after earning those fees through invoiced work. If a lawyer withdraws before the matter is complete, any unearned retainer funds must be returned. If you believe a lawyer has wrongfully retained trust funds, you can file a complaint with the LSO.
Is a retainer the same as a fee?
No. A retainer is a deposit held in trust. The fee is what the lawyer charges for their services. The retainer is applied against fees as they are invoiced — but it is not the fee itself. The actual cost of the matter may be more or less than the retainer amount.
What happens if my legal fees exceed the retainer?
Your lawyer should notify you when the retainer is running low and request a top-up before it is exhausted. Some engagement letters specify automatic replenishment thresholds. If you cannot top up, your lawyer may need to withdraw from the matter (with appropriate notice) under Rule 3.7.
Do I get a receipt for the retainer?
You should receive a written confirmation of the retainer deposit and a trust receipt. This may be part of your engagement letter or a separate document. You should also receive trust account statements showing the balance and any transfers applied against invoices.
How do I know the retainer is being held properly?
Ontario lawyers are required to maintain client trust ledgers showing every transaction — receipt of funds, withdrawals, and the balance. You have the right to request a trust ledger statement for your matter at any time. Your practice management software (like Atticus) should generate this automatically.
For Ontario lawyers: managing trust retainers efficiently
Trust accounting is one of the most compliance-intensive parts of running an Ontario law practice. Common errors that lead to LSO complaints:
Transferring fees from trust before the invoice is completed
Mixing client trust funds with general account funds
Failing to perform the monthly three-way reconciliation (Form 9)
Not returning unused trust funds promptly when a matter closes
Accepting fees in cash above the $7,500 threshold without the required FINTRAC records
Atticus automates trust account tracking — recording receipts and disbursements, maintaining per-client trust ledgers, alerting you to negative balances, and exporting trust records in LSO-compliant CSV format. The monthly trust reconciliation (Form 9) is automated from your ledger data.
LSO By-Law 9 trust accounting, automated
Atticus tracks every trust receipt and disbursement, maintains client trust ledgers, alerts you to negative balances, and exports in LSO-compliant format. Try free for 14 days.
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