How a Retainer Works
A reputable attorney will deposit your retainer money in a trust account, not his regular business account. Lawyers are required to maintain trust accounts to hold money that belongs to their clients. At the end of each month after taking your case, your lawyer will tally how much time he and his staff spent on your case and he will pay himself from your retainer money that he's holding in trust. If he spent 10 hours on your case and his hourly rate is $250 an hour, he’ll move $2,500 of your retainer money from the trust account into his business account. If he filed a divorce complaint for you, there would have been a filing fee. If he didn’t ask you to pay it separately from your retainer, he’ll reimburse himself for that cost as well.
When you hire a divorce lawyer, you will almost always be required to sign a retainer agreement with him. Whether you get your retainer money back if you stop your divorce depends largely on the terms of the agreement. Read it over carefully, because it probably mentions if your retainer money is refundable or non-refundable. If it’s non-refundable and you decide not to proceed with your divorce, you’ve probably lost your money. In 2009, the Michigan Supreme Court upheld an attorney’s right to keep a non-refundable retainer after his client reconciled with her husband and called off the divorce. Your only hope is that your lawyer might feel bad about taking your money if he did little or no work for you before you pulled the plug. However, if he were inclined to be this generous, he probably wouldn’t have included a non-refundable provision in his retainer agreement.
If your agreement contains language indicating that your retainer is refundable, you’ll receive at least some of your money back. Don’t expect all of it, however, and don’t expect it immediately. If you notify your lawyer at mid-month that you’ve changed your mind, he’s won't immediately have his staff reconcile your account so he can give you your money back. You’ll have to wait until the end of the month or whenever he normally does his accounting. At that point, he’ll bill your retainer for whatever time he put in on your case before you stopped your divorce. After he’s paid himself for that time, he’ll refund the remaining balance of your retainer.
Most states take a dim view of divorce lawyers who charge non-refundable retainers. If you’ve signed such a retainer agreement and you’re faced with losing a large amount of money when your lawyer did very little work on your case, you can approach your state’s fee arbitration committee or attorney disciplinary committee. Your local bar association can give you the contact information. It’s possible that either committee might require your lawyer to give you at least a portion of your money back. You should also do this if your retainer agreement doesn't mention whether your retainer was refundable or non-refundable, or if your lawyer didn't have you sign an agreement.