Expert Witness Questions: To Use a Retainer or Not To Use a Retainer

Previously we covered expert witness rate structures. Retainers for expert witnesses come up at about the same time. 

A retainer is an amount — usually applied toward an eventual bill — that is paid upfront. Anyone who has been an expert witness a few times has probably noticed that their clients and the insurance companies who often foot the bill, often pay very slowly. So retainers are of interest to experts as a way of speeding up that process a bit. Unfortunately, payors tend to be less enthusiastic about retainers for largely the same reasons.

Retainers can be structured in a wide variety of ways. The four most common types of retainers we see at Round Table Group are:  

1. No retainer. Litigation clients do pay their bills pretty reliably, so if you’re a little patient this approach is simpler and less likely to encounter resistance than the others. 
2. Refundable retainer. For these, an expert will charge an amount upfront and keeps it off to the side until it has been fully used. Some experts charge these so that they know they will be paid promptly for the first segment of work and so that the law firm shows that they are serious about retention. Most often experts charge against the retainer from the beginning, and when the retainer runs out, it runs out and billing continues normally (charging for work completed on a monthly basis). 
3. Non-refundable retainer. These are also referred to as minimums. Effectively an expert charges the law firm a minimum amount for retaining them, and it usually covers the first 5-10 hours of work. As a note, it is sometimes difficult to get insurance companies to agree to pay these (and a fair bit of litigation is paid, in the end, by insurance companies). 
4. Evergreen retainer. There are a variety of terms for this type of retainer, but it comes down to a refundable retainer that is refilled at the end of every month by the amount worked, so the expert is always working against a retainer.

Evergreen retainers can be confusing, so we tend to steer experts more towards refundable or non-refundable retainers, however evergreen retainers can be effective. Expert George Reis explains how he uses them: 

I get a retainer on all cases, and when the retainer starts running short, then the retainer gets replenished. That almost always works well with insurance-based cases. That does not always happen, and that is okay. Insurance pays for it, but it takes a long time. From a standpoint of just making sure that everything is clear, get the retainer and then make sure that when the retainer is becoming depleted that it gets renewed, and everything works out. […] I think it is the most sensible way to approach it because number one you do not want to have to wait multiple months for that money, especially when you are starting. Number two, there have been those two or three times when I did not recover payment and those fortunately were small, but they are not fun.  

As Reis also mentions, not all clients will accept a retainer. Assuming a law firm/end client accepts the retainer, the expert (or company holding the retainer on the expert’s behalf) needs to make sure that the retainer is kept in a separate account and isn’t released to be used for expenses until the work has occurred (and the law firm/end client has had an opportunity to review the bill and note any discrepancies). The most common problem we see with refundable retainers occurs when a case settles and the expert neglected to keep the retainer separate from their normal funds and needs to scramble to return it.  

Expert Jean Acevedo notes that the more similar your billing practices are to a law firm, the simpler it can be:  

When you are an expert, the lawyer is typically paying, and most lawyers do not want to put their law license in jeopardy by stiffing someone, but they also understand establishing credit by getting a retainer. They do the same thing. That is one good thing. You are not speaking a foreign language to your client, your client being the lawyer or the law firm. They understand retainers, so getting a retainer and then billing hourly. […] Make sure you are good about returning any unused retainer.

In the end, though, there are nearly as many types of retainers as there are experts that charge for them. For example, Charles Ehrlich considers his retainer a fee, as shown in this snippet from our podcast:  

Charles Ehrlich: I do charge a retainer. I call it a designation fee so that people understand that it is not like counting against hours. It is a fee that proves are we for real. Particularly for a jurisdiction such as California State Court, where somebody can designate you as an expert and you are not writing a report. Generally speaking, I do not want to find my name just out there casually. I have gotten some resistance to it, but not a lot.

Michelle Loux: And it gives you that good faith . . . it protects that relationship, or it indicates that you guys are serious.  

Charles Ehrlich: Yeah, I mean we are not just texting, we are dating.  

Some experts use the perceived scope of the engagement to determine their retainer fee. Rich Sanders takes this approach:  

An example of what that looks like is if somebody comes to us and they say, ‘I think my husband has like $70,000 in Bitcoin that he is hiding from me.’ I am going to tell them it is probably not worth your time to engage us because you are looking at a minimum $6,500 retainer on something like that and that is the best-case scenario where the husband decides not to drag everything out. It becomes a time where we have to ask these questions out of the gate. What is the transaction data? […] I cannot give somebody a retainer estimate unless I have that because that is just the nature of blockchain transactions. You might give me one transaction and say, ‘This is a withdrawal from my husband.’ Coinbase tells me where it went and it could take me 2 seconds or it could take me 2 days . . . 

 Craig Schlumbohm, a construction expert, has seem both the good and bad sides of charging a retainer within his arena:  

It is funny because I have read books and things like that on experts and how you do things. Different industries and different disciplines of being an expert are different. On the construction side, it is rare to have anything other than just say a nominal retainer, which is a kickoff fee more than anything else. Most companies — and we have done a lot of work with insurance companies — they are not paying for a retainer. That is not going to happen. After the hundredth time of being told no we sort of abandoned it. Many times, the insurance companies are slow in paying but you get paid. We had one law firm; it is public record. It was a San Diego-based law firm that filed bankruptcy and owed many Southern California experts a lot of money. It was not just us, so it is difficult. You have to make good business decisions. I did not. 

 Lastly, retainers do not work for everyone. Bill Gervasi notes:  

Early on a friend told me, ‘Oh, you should get a retainer.’ So, the next one I bid for I put in a retainer requirement in the contract. They never paid the retainer. It is a total waste of time. 

As with everything, figure out what works for you and be a little flexible with the law firm and end client to find a payment structure that works for everyone. 

If you are interested in being considered for expert witness gigs, sign up with Round Table Group. For nearly 30 years, we have helped litigators locate, evaluate, and employ the best and most qualified expert witnesses, starting with those we already know. Contact us at 202-908-4500 for more information or sign up as an expert.