Replenishing Retainer

What is a replenishing retainer?

A replenishing retainer requires the client to add funds when the retainer balance drops below a specified amount. Unlike evergreen retainers that charge automatically, replenishing retainers require the client to make a new payment when notified. This gives clients more control while still maintaining a buffer against unpaid fees. The engagement letter specifies the replenishment threshold and expected response time.

Managing replenishment requests

Monitor retainer balances as work progresses. Notify clients promptly when balances approach the threshold. Specify the replenishment amount needed. Allow reasonable time for payment before pausing work. Track which clients respond promptly and which create collection challenges. For clients who consistently delay replenishment, consider switching to evergreen arrangements or requiring larger initial retainers.

Replenishing retainers vs advance fees

Replenishing retainers remain client property until earned and must be held in trust. As you perform work, fees transfer from retainer to earned income. Advance fees may be structured differently depending on your jurisdiction's rules. Understand your state's ethics requirements for different retainer types. The terminology varies, but the key question is always when funds become yours and where they must be held until then.