Consulting Retainer Agreement Template

Two kinds of legal retainer are worth borrowing. Cornell Law School's legal dictionary describes a general retainer as payment only for reserving a lawyer's availability¹, with the work billed on top. An advance fee retainer instead pays for future work up front. A consulting retainer can work either way, or mix the two, so pick the model before you draft.

The template on this page uses included hours, which suits advisory work that's steady enough to estimate. Overage is billed past the cap, and unused hours expire at month end.

List what the retainer covers in plain terms: advisory calls, reviewing documents and models, written guidance. Then list what it doesn't, because that's where disputes start. For an advisory retainer, exclude hands-on execution, owning a deliverable and on-site work unless you price them separately.

Say how an out-of-scope request gets handled, not just that it's excluded. Anything big enough to look like a project should get its own statement of work and price, so it doesn't eat into the month's hours. Add a response time too, such as one business day for email, so availability means something you can both check.

Divide the monthly fee by the included hours to get your effective rate, and compare it with what you charge for project work. A $3,600 fee for 24 hours works out to $150 an hour. If you haven't set a rate yet, a consulting rate calculator builds one from your income target, costs and billable days.

Then set both limits, using a model from federal contracting. US rules for indefinite-quantity contracts, where the government orders services as it needs them over a fixed period, require a stated minimum and a stated maximum². The minimum must be more than nominal for the contract to be binding. In a retainer, the fee is the minimum and the included hours are the maximum.

Without the minimum, you're billing by the hour with extra paperwork. Without the maximum, you're selling unlimited access for a flat fee. Price overage above your effective rate, since unplanned hours push out other work. Last, decide whether unused hours expire at month end or roll over for one month, up to a cap.

Give the retainer a fixed first term, such as six months, then let it continue month to month until either side gives notice. Six months gives you six data points before the first renewal. Put the review date in the contract too, a set number of days before that term ends.

Keep the relationship clearly independent. For federal employment taxes, the IRS applies common-law rules, and worker status turns on evidence of control and independence. That includes who directs how the work is done and the permanency of the relationship³. A retainer that runs for years looks more permanent, so keep your methods, schedule and tools your own.

Check the rules where you and your client work. In New York State, a solo consultant's agreement worth $800 or more, alone or with other work for that client in the past 120 days⁴, must be in writing. The contract must name both parties with their mailing addresses and itemize the services, their value and the rate and method of pay⁵. It must also give the payment date and when you'll send a list of the work done.

Illinois requires a written contract from $500 in 120 days⁶, with similar details. The template's agreement has no mailing addresses, payment date or date for your list of work, so add them if either law applies to you.

Finish with the standard terms: confidentiality, contractor status, who owns what you write, a cap on liability and governing law. This template covers the first two, and the service agreement template has wording for ownership and liability.

Log each month's hours on the day you send the invoice, next to the hours included. Then label the month: over the cap, under half the included hours, or within range. A single month is noise, but two or more with the same label in a term make a pattern worth a short note to the client.

Watch under-use as closely as overage. A client paying for hours they don't use may simply leave at renewal, so raise it first and offer a smaller tier. In the example below, one client never used even half its hours in a month.

Brackendale's 35 hours over the cap were worth $6,475 at the overage rate, and only a monthly log shows that. Fill in the renewal numbers before the call: total hours, the share used, the pattern and a specific offer. Opening with the client's own hours gives any price change a reason they can check.

If you'd rather not keep the log by hand, open this template with Edit with AI. River records each month's hours against the cap and drafts the renewal offer once a pattern shows.