The Best Way to Handle Expert Billing and Retainer Agreements

Anjelica Cappellino, J.D.

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— Updated on June 23, 2020

The Best Way to Handle Expert Billing and Retainer Agreements

As an attorney, finding the perfect expert for your case is no simple task. It takes ample research and vetting to ensure that your expert is not just qualified and credentialed but also has the necessary skills to break down otherwise complex information and specialized knowledge to easily palatable and comprehensible testimony for the trier of fact. And as both attorneys and experts are well aware, the time and preparation demanded of an expert throughout litigation – whether the expert is acting as a consultant or as a testifying witness – can be enormous. While the hustle and bustle of ongoing complex litigation and arduous trial preparation might cause other seemingly less pressing matters to be placed on the back burner, there is one important administrative matter that should never be overlooked – compensate your expert!

An agreed upon replenishable retainer is a useful way to ensure that the expert is fairly compensated while also relieving the attorney of tedious billing work. The way a replenishable retainer operates is that the expert charges a set fee upfront, and their billable hours are deducted from the fee. Once the retainer is exhausted, the expert and attorney can reconvene so that another retainer can be billed. A replenishable retainer, along with a comprehensive fee schedule for other varying rates and expenses, is a great method for both attorneys and experts to handle the oftentimes overlooked issue of billing. Below are some tips on some to make the most out of a replenishable retainer and to ensure your expert is paid in a fair and timely manner.

Draft a Thorough Retainer Agreement

After an attorney has chosen an expert, no work should be performed until a comprehensive retainer agreement is in place. A written retainer agreement is the foundation to any solid attorney-expert relationship and should specify all of the pertinent terms in details. A retainer should put both parties on notice of their contractual obligations. In order to calculate a fair compensation rate for your expert, the services to be performed by the expert should be clearly stated, i.e., whether an expert will testify at a deposition or trial or will be used solely as a consultant. The general preparation that is expected and the types of materials that will be reviewed are also important to note. As always, the possibility of potential conflicts of interests that may disqualify an expert’s testimony should also be discussed in advance of engagement. If the expectations of both the expert and attorney are clearly outlined, there will be no misunderstandings and the likelihood of any future surprises is lessened.

Once both parties are fully aware of the work that the expert agrees to do, a reasonable retainer and fee schedule can be discussed. Generally, most work is billed at an hourly rate (with some exceptions). The hourly rate should be fair for both parties while accurately reflecting the expert’s level of skill and knowledge. It is from this hourly rate that a replenishable retainer should be based. One of the purposes of a replenishable retainer is that the first charged fee should generally cover the amount of hours that an expert will expend on the initial review of materials, at the very least. For example, if a medical expert typically charges $300 per hour to review medical records, and the documents that the attorney first produces will reasonably take at least ten hours to review, it would be practical to set the first paid retainer at a minimum of $3,000. At which point, the retainer can be replenished to represent an accurate reflection of work for the next stage of trial preparation or litigation. In terms of estimating when a retainer may need to be replenished, it is helpful to schedule a general timeline for when certain work needs to be completed. Depending upon the particular field of expertise, an expert’s preparation may include reviewing voluminous documents, conducting experiments, or analyzing scientific methodologies. By outlining the specifics of an expert’s duties, both the expert and the attorney will have a clearer understanding of when certain tasks will be accomplished and when a retainer should be replenished.

Retainers will vary greatly depending upon the type of expert, the facts at issue, and the length and complexity of litigation. But any strong retainer should set a schedule for payment that corresponds with the expert’s different stages of work. Likewise, the expert should provide periodic billing statements to the attorney breaking down the work performed and billed toward the retainer. It is generally a good idea for the retainer to specify the exact amount of time by which the attorney must remit payment. This avoids experts receiving untimely payments and also helps the attorney stay organized.

Outline a Fee Schedule

In conjunction with a replenishable retainer, other fees and additional hourly rates should be duly set forth in an expert’s agreement. Oftentimes, an expert’s hourly rate for the review of materials is different from their rates for depositions and trials. If it is agreed that an expert will be testifying at a deposition or at court, that rate should be explicitly agreed upon. Likewise, an expert may charge a differing hourly rate for trial preparation, in-person work, or travel time. A fee schedule for different types of work is largely dependent upon an expert’s education, training, skill, and experience.

In addition, any expenses incurred by the expert that are subject to reimbursement should be itemized, such as the cost of mailings, materials, travel and mileage, lodging, and meals. Like the hours billed toward the retainer, any expenses should be specified, with additional documentation provided, if needed.

Have a Contingency Plan

 In the event that an expert’s services are no longer needed, such as when an early settlement is reached, both parties should be able to terminate their agreement swiftly and with as little difficulty as possible. In the case of a replenishable retainer, this may mean returning the amount of any unbilled hours to the attorney. In the alternative, an expert may need to be compensated for time spent at court despite not having the opportunity to testify (usually seen in cases that settle right before witnesses are called). While a retainer agreement cannot predict every possible outcome, it should specify how these circumstances are handled.

Overall, replenishable retainers that are supported with an iron-clad, comprehensive agreement, is the best way to ensure a smooth and productive attorney-expert relationship.

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