💰 Overview: Retainer Refund Claims
A retainer refund claim arises when you've paid an advance fee to a professional—typically an attorney, consultant, or service provider—but the professional either didn't perform the work, performed less than expected, or the relationship ended before all fees were earned. California law is clear: unearned fees must be refunded.
Common Retainer Refund Scenarios
⚖ Attorney Retainer
Paid retainer to an attorney who did little or no work on your case
📊 Consultant Retainer
Hired a consultant on retainer who failed to provide promised services
💻 Project Deposit
Paid a deposit for a project that was never started or completed
🚫 Early Termination
Relationship ended (by either party) before all retainer fees were earned
👍 Your Rights Under California Law
- Prompt refund: Unearned fees must be returned promptly upon termination
- Itemized accounting: You're entitled to a detailed statement of work performed
- Interest: 10% per year on contract damages if professional delays refund
- Licensing complaint: For attorneys, failure to refund is a disciplinary violation
⚠ "Non-Refundable" Retainer Clauses
Many retainer agreements contain "non-refundable" language. In California, such clauses are often unenforceable:
- For attorneys, "non-refundable" fee clauses generally violate Rule 1.16(e)
- Courts distinguish between true retainers (earned upon receipt) and advance fee deposits
- The label used doesn't control—substance determines refundability
📚 Types of Retainers
California law distinguishes between different types of retainer arrangements. Understanding which type you have determines your refund rights.
| Retainer Type | How It Works | Refundable? |
|---|---|---|
| True Retainer (Classic) | Pays for availability—professional agrees to be available to you and decline conflicting work | Generally no—earned upon receipt |
| Advance Fee Deposit | Deposit held in trust, drawn against as services are performed | Yes—unearned portion refundable |
| Flat Fee / Fixed Fee | Set amount for a defined scope of work | Pro-rated if work not completed |
| Evergreen Retainer | Replenishing retainer that refills when drawn down | Yes—unused balance refundable |
💡 The Label Doesn't Control
Many professionals call their advance fee deposits "retainers." In California, courts look at the substance of the arrangement, not the label. If the fee was meant to be applied to future services (not just availability), it's likely an advance fee deposit that is refundable to the extent services weren't performed.
⚖ Legal Basis
California provides strong protections for clients seeking refunds of unearned professional fees.
For Attorney Retainers
California Rules of Professional Conduct, Rule 1.16(e)
Upon termination of representation, a lawyer shall promptly release to the client all client materials and property, refund any advance payment of fees that has not been earned, and render an accounting of any funds held.
California Rules of Professional Conduct, Rule 1.15
Advance fees that are not flat fees must be deposited in the client trust account and may only be withdrawn as earned. Failing to maintain proper trust accounting can result in discipline and criminal prosecution.
For All Professional Services
California Civil Code Section 3300
Contract damages include the amount that will compensate for all detriment proximately caused by breach. For service contracts not performed, this includes return of payments made for undelivered services.
California Civil Code Section 3289
Provides 10% per annum prejudgment interest on contract damages. This applies when a professional wrongfully withholds a refund you're owed.
Key Cases
📖 Baranowski v. State Bar (1979) 24 Cal.3d 153
California Supreme Court held that an attorney's failure to refund unearned fees violates professional duties and can result in discipline. The Court emphasized that clients are entitled to a prompt refund and accounting upon termination.
📖 Flatt v. Superior Court (1994) 9 Cal.4th 275
Distinguished between true retainers (paid for availability) and advance fee deposits (paid for future services). Most arrangements labeled "retainers" are actually advance fee deposits subject to refund.
📊 Calculate Your Refund
Follow this formula to determine what refund you're owed.
Hourly-Based Retainers
🔢 Formula
Refund = Retainer Paid - (Hours Worked x Hourly Rate) - Legitimate Costs
Flat Fee Arrangements
🔢 Formula
Refund = Fee Paid x (Percentage of Work Not Completed)
Example: Paid $5,000 for a project that was 30% completed = $3,500 refund
What to Request from the Professional
- Itemized billing statement: All time entries with dates, descriptions, and time spent
- Cost accounting: All costs advanced on your behalf with receipts
- Trust account statement: For attorneys, showing deposits and withdrawals
- Written explanation: If they claim fees were earned, demand specifics
⚠ Red Flags in Billing Statements
- Vague entries like "research" or "review file" without detail
- Billing for work you never authorized
- Minimum billing increments (0.5 or 1.0 hour) for brief tasks
- Billing by multiple professionals for the same task
- Billing after relationship terminated
🖩 Retainer Refund Damages Calculator
Use this interactive calculator to estimate potential damages in your case. Enter your information below to get an estimate of recoverable damages.
📈 Estimated Damages Breakdown
🔍 Evidence Checklist
Gather these documents before sending your demand letter.
📄 Engagement Documents
- ✓ Retainer agreement or engagement letter
- ✓ Fee agreement showing hourly rate or flat fee
- ✓ Scope of work or project description
- ✓ Any amendments to the original agreement
💰 Payment Records
- ✓ Retainer check or wire transfer confirmation
- ✓ Credit card statements showing payment
- ✓ Any additional payments made
- ✓ Receipt or confirmation from professional
📝 Work Product / Accounting
- ✓ Billing statements or invoices received
- ✓ Work product actually delivered
- ✓ Your notes on work that was/wasn't done
- ✓ Trust account statements (for attorneys)
📩 Communications
- ✓ Emails requesting status or refund
- ✓ Professional's responses or excuses
- ✓ Termination letter (if relationship ended)
- ✓ Evidence of non-response
📝 Sample Demand Letter Language
Opening (Attorney Retainer)
Under California Rules of Professional Conduct Rule 1.16(e), you are required to "promptly refund any advance payment of fees that has not been earned" upon termination. It has now been [X DAYS/WEEKS] since termination, and I have not received a refund or an accounting of how my retainer was applied.
I demand that you provide an itemized billing statement and refund all unearned fees within fourteen (14) days.
Opening (Non-Attorney Retainer)
The agreed-upon work has not been completed. Specifically: [DESCRIBE WHAT WASN'T DONE]. Under our agreement and California contract law, I am entitled to a refund of the portion of the retainer that was not earned through actual services performed.
I demand an itemized accounting of work performed and a refund of $[AMOUNT] within fourteen (14) days.
Demand with Legal Consequences
If I do not receive full payment by [DEADLINE], I will:
1. File a complaint with the State Bar of California for violation of Rules of Professional Conduct 1.15 and 1.16(e);
2. File a civil complaint for breach of contract, conversion, and breach of fiduciary duty; and
3. Seek all available damages including attorney's fees and costs.
Govern yourself accordingly.
📜 State Bar Complaint (Attorneys Only)
If your retainer dispute is with an attorney, filing a State Bar complaint provides significant leverage.
🔗 How to File
File online at calbar.ca.gov or call (800) 843-9053. Include copies of your retainer agreement, payment records, and communications.
📈 What Happens
The State Bar investigates and may impose discipline ranging from private reproval to disbarment. They can also order restitution.
🕑 Timeline
Investigations typically take 6-12 months. File promptly—there's a 5-year statute of limitations for most complaints.
💡 Strategic Value
Many attorneys settle quickly once a State Bar complaint is filed. The threat to their license is often more concerning than the dollar amount.
⚠ What the State Bar Can and Cannot Do
Can: Investigate misconduct, impose discipline, order restitution
Cannot: Provide legal advice, represent you in court, force immediate payment
A State Bar complaint complements your civil claim—it doesn't replace it.
👥 When to Hire Another Attorney for Retainer Disputes
Ironically, disputes with attorneys about unearned retainers sometimes require hiring a different attorney. Here's when you can handle matters yourself versus when representation helps.
✅ May Handle Yourself When:
- Refund amount is under $3,000
- Attorney acknowledges the refund is owed
- Clear engagement letter shows unused retainer amount
- Small claims court is appropriate venue
- State Bar fee arbitration can resolve it
⚠️ Hire an Attorney When:
- Disputed amount exceeds $10,000
- Attorney is disputing the billing records
- Malpractice claims are also involved
- Attorney is threatening to sue you for fees
- Complex retainer agreement requires interpretation
- Multiple matters or attorneys are involved
- You need to pursue the attorney's malpractice insurance
- The attorney has retained counsel to oppose you
📊 Not Sure If You Need an Attorney?
Attorney fee disputes have special procedures including State Bar fee arbitration. Take our free assessment to determine the best approach for your situation.
🚀 Next Steps
- Request itemized billing statement – Ask for a detailed accounting of all time and costs
- Calculate your refund – Use the formulas above to determine what you're owed
- Send written demand via certified mail – Keep proof of delivery
- Set a clear deadline – 14 days is standard
- File State Bar complaint – If attorney doesn't respond (parallel to civil action)
- Consider small claims court – Up to $12,500 without an attorney
📚 Small Claims Advantage
Retainer refund cases are well-suited to small claims court. Attorneys cannot appear for defendants in small claims, so the attorney would have to represent themselves or send no one. The rules favor clear documentation over legal technicalities.
Need Help With Your Retainer Refund Claim?
Get a 30-minute strategy session with a California attorney to review your case and discuss next steps.
Book Consultation - $125🔗 Related Demand Letter Guides
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