An Expert Witness Guide to Retainers

A retainer is an amount paid to the expert upfront, to secure their services for an engagement. Always optional, some experts rely upon retainers in rate agreements to ensure they are fairly compensated in a timely manner. Similarly, engaging lawyers or law firms know that their expert has blocked off sufficient time and is committed to providing a minimum number of hours.??

Retainer Structures?

When experts make the decision to negotiate a retainer, Round Table Group typically sees some variation on three main types: refundable, non-refundable, and evergreen.??

Refundable??

An expert charges an amount upfront and keeps it off to the side until it has been fully used. This ensures prompt payment for the first segment of work, as the law firm shows that they are serious about retention. Most often, experts charge against the retainer from the beginning, and when it runs out, billing continues monthly.??

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

When you’re 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’s one good thing—you’re not speaking a foreign language to your client, your client being the lawyer or the law firm. They understand retainers […] Make sure you are good about returning any unused retainer.???

Non-refundable / Minimum?

An expert charges a minimum amount for retaining them, and it usually covers the first 5-10 hours of work. Telecommunications expert Keith Mallinson uses these strategically, noting “Sometimes with some assignments, I will insist on having a non-refundable retainer fee. If I’m concerned that I’ll be engaged, but I’ll never be given any work to do, just to be put on hold. I don’t want to be a free option to be taken [off the market], so I can’t testify for the other side, for example.”?

Entertainment expert Kathryn Arnold argues that your reputation as an expert witness may be enough to change the outcome of a case, and therefore worthy of compensation. She uses non-refundable retainers to ensure that she is paid, even when cases move to rapid settlement, recalling:??

I’d already done about 15 or 20 cases, and I was speaking with an attorney about my perspective on the case and he said, “We’re going to go and designate you.” I said, “Great.” [. . .] Two or three weeks later, I hadn’t heard from him. I kept calling and calling and finally got to someone who said, “The case was settled.” I said, “Okay.” I realized that they used my name as a credible expert, and the case was settled. Immediately, I realized that [an] appropriate deal agreement, or what we call a “fee schedule” was necessary. [Going forward] I made sure that prior to designation and/or prior to allowing anybody to know I was on the case, the fee schedule and a 10-hour retainer had to be signed and sent to me [. . .] They even ask if it is nonrefundable—and in my case, it is for that very reason. Because you’re not only getting paid a solid rate for the work that you do, but you’re paid for the years that you put into your trade to earn you the right to call yourself an expert.?

On the other hand, some payors, including insurance companies, may not permit non-refundable retainers. Moreover, less experienced expert witnesses may lack the bargaining power to secure them.??

Evergreen retainer??

Variously known as rolling, continuous, deposit, or ongoing; these are refundable retainers which are refilled at the end of every month by the amount worked. In this manner, the expert is always working against a retainer. Evergreen retainers may be confusing, so Round Table Group tends to steer experts toward refundable or non-refundable retainers. Nevertheless, evergreens can be effective in certain situations. Expert George Reis explains:???

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.??

Retainer Caveats?

Some experts find retainers unnecessary, and simply do not (or no longer) use them. Hydrology expert Dr. W. Richard Laton notes “I do not do retainers anymore. Originally, I kind of did and I know people who do retainers all the time. I have never been burned. Maybe there were some slow payments, but I have never been burned, and I will keep my fingers crossed. Realistically, they have a problem, and my job is to help them. If I am helping them, I expect to get paid for that help.”??

Similarly, technology expert Dr. Istvan Jonyer states, “Asking for retainers does increase friction and some clients say, ‘Well, we really like you [but] we would prefer to not have a retainer.’ And I have, so far, gone down that path but it makes you think when you see someone so experienced having very specific payment terms like that [. . .] maybe he had some bad experiences along the way.”?

Moreover, not all engaging parties will accept a retainer. Computer systems expert 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.”?Even when the client will accept one, the expert needs to make sure that the retainer is kept in a separate bank, trust, or similar account, or with an outside company. The money should not be released until the work has occurred, and the client has had an opportunity to review the bill, noting any discrepancies. A common problem with refundable retainers occurs when a case settles but the expert neglected to keep the retainer separate from their normal funds and needs to scramble to return it.?

Construction management expert Craig Schlumbohm has seen both the good and bad sides of charging a retainer:???

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’s rare to have anything other than just say a nominal retainer, which is a kickoff fee more than anything else. Most companies—and we’ve done a lot of work with insurance companies—they are not paying for a retainer. That’s 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. [On the other hand] we had one [. . .] 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’s difficult. You have to make good business decisions. I did not.??

Retainer Fees?

Retainers, when used, are a component of your overall rate structure. Some expert witnesses use the perceived scope of the engagement to determine their retainer fee. Cryptocurrency expert Rich Sanders takes this approach:???

[I]f somebody comes to us and they say, “I think my husband has like $70,000 in Bitcoin that he’s hiding from me.” I’m going to tell them it’s probably not worth your time to engage us, because you’re 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. [There] 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’s 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 two seconds or it could take me two days.??

Securities expert Dr. Elliot Fishman uses retainers for initial work, before moving to an hourly rate:??

I will take a retainer upfront. The retainer covers everything up until the deposition phase. For me, to become familiar with the case, do background research, and write the expert report—at that point, the fixed fee stops because I do not know what is going to be thrown at me after that—whether I have to write a rebuttal to the other expert’s report, how long does deposition preparation take, or does the deposition go on? There is an hourly basis, subject to a cap up until the deposition. Then the toll starts.?

He continues, examining the ethical considerations of retainer structures:??

Going back to my core professional practice. It is the ethical way to go whether it is a large or small client—they want to know what they are in for. They do not want to get hit with a $100,000 bill right up front. What I would recommend to anyone in the field—whether they are starting, in mid-career, or have been doing it for decades—is to cap your fees up to the deposition. Do not charge your clients for all the brushing up you must do.?

Whether to use a retainer depends on the specifics of each engagement, industry norms, and individual preferences. Figure out what you want and be a little flexible with the engaging partner to find a payment structure that works for everyone.??

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