A retainer agreement in New York, known formally as a letter of engagement, is the written contract you sign with your attorney before legal work begins. State court rules require one whenever the total fee is expected to reach $3,000 or more, and the document must cover three specific topics: the scope of services, how fees and expenses are calculated and billed, and notice of your right to arbitrate fee disputes.1Legal Information Institute. New York Compilation of Codes, Rules and Regulations Title 22 1215.1 – Requirements Beyond those minimums, New York layers on rules about contingency percentages, non-refundable fees, trust accounts, and conflict waivers that shape what a valid sample retainer agreement in New York actually looks like on the page.
The Three Required Contents
Under 22 NYCRR 1215.1, every letter of engagement has to address the same three subjects.2New York Courts. Letters of Engagement
Scope of services. The agreement should say clearly what the attorney is being hired to do. “General legal services” is the kind of phrasing that produces disputes. A personal injury retainer should identify the incident and the parties. If a court case is already open, the index number belongs in the document. You want the beginning and end of the engagement described specifically enough that both sides know when new work is outside the deal.
Fees, expenses, and billing. How the attorney calculates charges, what expenses get passed through to you, and how often you receive an invoice. If more than one lawyer or paralegal will bill time on your matter, each person’s rate should be listed. Out-of-pocket costs like filing fees, process servers, deposition transcripts, and expert witnesses need their own treatment: is the firm advancing them and deducting later, or do you pay as they arise?
Right to fee arbitration. Where applicable, the letter must tell you that you may have the right to arbitrate a fee dispute under Part 137 of the Rules of the Chief Administrator.1Legal Information Institute. New York Compilation of Codes, Rules and Regulations Title 22 1215.1 – Requirements
Those three items are the floor. A well-drafted agreement also covers how the relationship can end, what happens to unearned fees, how conflicts are handled, and how disputes about the file itself are resolved.
When a Letter Is Required and When It Is Not
The rule applies to any attorney who charges or collects a fee, and the letter must be provided before representation begins or within a reasonable time after, if the scope cannot be pinned down at the start.1Legal Information Institute. New York Compilation of Codes, Rules and Regulations Title 22 1215.1 – Requirements An updated letter is required whenever the scope of services or the fee changes significantly.
Section 1215.2 lists four exceptions:3Legal Information Institute. New York Compilation of Codes, Rules and Regulations Title 22 1215.2 – Exceptions
- Total fees expected to remain below $3,000.
- Repeat engagements with the same attorney for the same general kind of services you have already paid for.
- Domestic relations matters, which fall under the more detailed rules of Part 1400.
- Out-of-state attorneys who do not maintain a New York office and are not performing a material portion of the work in New York.
Even where an exception applies, putting the terms in writing is still the safer practice. The exception relieves the attorney of the regulatory requirement, not of the risk that a dispute later turns on what was actually agreed.
Fee Structure Language to Read Carefully
New York’s Rules of Professional Conduct prohibit excessive or illegal fees and list eight factors an attorney should weigh in setting a rate, including time and labor required, the complexity of the questions involved, the customary fee in the locality, and the results obtained.4New York State Unified Court System. New York Rules of Professional Conduct Part 1200 – Rule 1.5 Your retainer should make clear which fee structure applies.
Hourly billing is the most common. The agreement should list the hourly rate for each person who might work on your matter, from senior partners down to paralegals.
A flat fee is a single price for a defined piece of work, typical in real estate closings, business formations, and simple wills. Read the definition of “covered services” carefully; anything outside it is extra.
A contingency fee is paid as a percentage of what you recover, and you pay no fee if you lose. Rule 1.5(c) requires its own written agreement specifying the percentage at each stage (settlement, trial, appeal), what expenses are deducted, and whether they come out before or after the fee is calculated.4New York State Unified Court System. New York Rules of Professional Conduct Part 1200 – Rule 1.5 Whether expenses come off the top or off your share can meaningfully change what you take home.
A monthly retainer pays a set amount for ongoing access to legal services and is common for businesses that need regular counsel.
Contingency Fee Caps
New York caps contingency percentages by law in personal injury and wrongful death matters, and it caps them more strictly in medical malpractice. Any provision that tries to charge above these limits is unenforceable to that extent.
Personal Injury and Wrongful Death
The Appellate Division rules give a personal injury attorney two options.5New York State Unified Court System. Contingent Fees in Claims and Actions for Personal Injury – Section 1015.15
Schedule A is a sliding scale:
- 50% of the first $1,000 recovered
- 40% of the next $2,000
- 35% of the next $22,000
- 25% of anything over $25,000
Schedule B is a flat rate of up to one-third (33⅓%) of the total recovery, if the retainer says so from the start. Most agreements use Schedule B for its simplicity.
Medical Malpractice
Under Judiciary Law Section 474-a, medical malpractice fees follow a sliding scale that shrinks as recovery grows:6New York State Senate. New York Judiciary Law Section 474-A
- 30% of the first $250,000
- 25% of the next $250,000
- 20% of the next $500,000
- 15% of the next $250,000
- 10% of anything over $1,250,000
Before signing a med-mal retainer, run the math against this schedule.
Non-Refundable Retainer Language Is a Red Flag
If a proposed retainer describes any part of the fee as “non-refundable,” stop and ask about it. In Matter of Cooperman, the New York Court of Appeals held that non-refundable retainer fee agreements violate public policy because they undermine a client’s absolute right to fire an attorney at any time.7Legal Information Institute. In the Matter of Edward M. Cooperman, an Attorney The court described the effect as turning clients into economic hostages who face a financial penalty for exercising a right they are supposed to have freely.
An attorney can still keep fees for work already done, measured by the reasonable value of the services. What the agreement cannot do is characterize an upfront payment as non-refundable regardless of whether the work is performed. Unearned money must be returned promptly when the relationship ends.
Advance Payments and Trust Accounts
Money you pay before the work is done generally belongs to you until the attorney earns it. Rule 1.15 requires attorneys to keep client funds in a special trust account at a New York banking institution, separate from the firm’s operating account and identified as an “Attorney Special Account,” “Attorney Trust Account,” or “Attorney Escrow Account.”8New York State Bar Association. New York Rules of Professional Conduct – Rule 1.15
New York ethics opinions have recognized that a client and attorney can agree to treat an advance fee as the attorney’s property on receipt, in which case it does not go into the trust account. Even then, the fee must be fair and reasonable, fully explained to and understood by the client, and any unearned portion must be returned at the end of the representation.9New York State Bar Association. Ethics Opinion 816 If you are paying a large sum upfront, ask which treatment applies. If the money is going straight into the firm’s operating account, make sure the agreement defines exactly when portions become earned, so there is no ambiguity about what you are owed if you leave.
Your Right to Fee Arbitration
The Fee Dispute Resolution Program under Part 137 gives clients a way to challenge a bill without going to court. The program applies automatically to civil matters where the amount in dispute is between $1,000 and $50,000 and representation began on or after January 1, 2002. Outside that range, both sides can consent to arbitration voluntarily.10New York Courts. Part 137 Fee Dispute Resolution Program
Part 137 does not cover criminal cases, disputes involving malpractice allegations, fees set by a court, or claims where more than two years have passed since the attorney last provided services or more than twelve months since the client’s last payment, whichever is later.10New York Courts. Part 137 Fee Dispute Resolution Program
The retainer itself must include notice that you may have the right to use this program.1Legal Information Institute. New York Compilation of Codes, Rules and Regulations Title 22 1215.1 – Requirements If the attorney later sues for unpaid fees without having given you this notice, they must serve a formal Notice of Client’s Right to Arbitrate by certified mail or personal service before proceeding.
Conflict of Interest and Informed Consent
A retainer should address potential conflicts, especially where the attorney represents multiple clients or has business relationships that could color their judgment. Under Rule 1.7, an attorney can represent you despite a concurrent conflict only if four conditions are met: the attorney reasonably believes competent representation is possible, the representation is not prohibited by law, it does not put you against another current client in the same proceeding, and you give informed consent confirmed in writing.11New York State Unified Court System. New York Rules of Professional Conduct Part 1200 – Rule 1.7
Informed consent in New York means more than signing a form. The attorney must communicate enough information for you to make a real decision, including the risks of the arrangement and the alternatives available.12New York State Unified Court System. New York Rules of Professional Conduct Part 1200 – Rule 1.0 Boilerplate waivers do not meet this standard. If you see conflict language in a proposed retainer, ask the attorney to walk you through any scenario where their loyalty could be divided.
Ending the Relationship
You have the absolute right to fire your attorney at any time for any reason. The retainer should also say how the attorney can withdraw. Rule 1.16 makes withdrawal mandatory in certain situations, including when continued representation would violate the law or ethics rules and when the client has discharged the lawyer. An attorney may withdraw for other reasons, such as a client refusing to cooperate, using the attorney’s services for fraud, failing to pay after warning, or insisting on a course the attorney finds fundamentally objectionable. If the case is already before a court, the attorney needs the tribunal’s permission, and a court can order continued representation even when grounds for withdrawal exist.13New York State Unified Court System. New York Rules of Professional Conduct Part 1200 – Rule 1.16
Whoever ends the relationship, the attorney has to take reasonable steps to protect your interests: adequate notice, time for you to find new counsel, turnover of your file and property, and prompt refund of any unearned fees. A solid retainer spells all of this out.
If There Is No Written Agreement
Skipping the letter of engagement does not automatically mean the attorney works for free. New York courts have declined to adopt a blanket rule forfeiting fees for noncompliance with 22 NYCRR 1215.1, reasoning that automatic forfeiture could create windfalls for clients who always understood they were paying. But the attorney who skips the paperwork loses ground. Ambiguities get resolved in the client’s favor, and the attorney’s recovery is limited to quantum meruit, meaning the reasonable value of services actually performed rather than whatever a written agreement would have set.
The attorney bears the burden of proving the client knowingly agreed to pay, that the terms were fair, and that the fee was reasonable. That is a harder case without a signed document, and an arbitrator or judge may value the work differently than the attorney would have billed it. For clients, the mirror-image lesson is the practical one: the absence of a letter tilts the field toward you, but a clear written agreement from the start is the surest way to avoid the fight entirely.