Trust Accounting for Advance Fees0
site admin posted in General on October 22nd, 2005
A true “retainer” is earned by the lawyer upon receipt. It is paid in order to guarantee the attorney’s availability for the case. An advance fee, however, is money the client gives the attorney up front to pay the cost of legal representation.
Unlike true retainers, advance fees don’t belong to the lawyer until he or she performs services for that client. If all the services are not performed, the attorney must refund the unearned money. Therefore, while an attorney may not be required to, the simplest and safest thing to do is to hold advance fees in a client trust bank account and draw them out as earned. In fact, it would be a good idea to withdraw the fees on a regular basis, perhaps when monthly reconciliation is performed.
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