Top 10 Tips for Creating a Successful Retainer Agreement
Protecting Your Business and Your Client
What is a retainer agreement?
A retainer agreement is a legal document that protects both you and your client from being stranded in the event of a dispute. When you enter into an agreement with a client, especially someone with whom you have been dealing for a while, you likely won’t want to consider the possibility of the relationship going sour.
Things may be going so well with the client that you can’t imagine a situation where they stop doing so. Unfortunately, there are many ways things can go south during your dealings, and you must be prepared to handle things when this happens. One crucial way to deal with prospective disputes is by learning how to create a successful retainer agreement.
A well-drafted retainer agreement covers all the critical aspects of your business relationship with your client and provides a way out for you in the event of a dispute. Retainer agreements have many benefits, which we have discussed in this post.
Aside from these benefits, a retainer agreement helps you decide upfront what dispute resolution method you will like to employ if a dispute arises between you and your client. But what should be included in a retainer agreement?
This article will discuss the top 10 tips that can help you create a successful retainer agreement and how you can protect both your business and your client with your retainer agreement.
Retainer Agreement Contract
10 tips for creating a successful business retainer agreement
1. Value: what will you be doing for the client?
A retainer agreement is different from other types of contracts in that instead of paying for work done, the client pays for the promise of work to be done. Thus, it behooves you as a freelancer to make the client see the value of signing a retainer agreement with you.
As beneficial as getting work under a retainer is, it is not easy to come by. There is usually the obstacle of a freelancer being hesitant to propose a retainer to a client or being unable to communicate why a retainer is valuable to the client. Thus, it would be best to determine what value you will be providing for your client when they sign a retainer agreement with you.
To answer the question of value, you must determine the services you will be providing for the client regularly.
2. Do the legwork: understand your client.
Aside from this being a good business practice, it is also courteous, and it goes a long way in determining how much work you will do before you get the client to sign with you. Before pitching a retainer agreement with a client, spend time understudying them and their business.
Understand how the business works and figure out areas where your services can help advance their business interests. When you approach a client and display such a level of knowledge about their business, including areas where your services can make them even better, you have accomplished more than 50% of the goal.
3. Shoot your shot: pitch yourself to the client
When you clarify what services you want to offer and how the client will benefit, it is time to sell the client on the retainer. You can do this in either of two ways:
- At the beginning of your relationship with the client, when proposing to do some regular contract work. You can slip in the option of a retainer agreement when at the successful completion of the work.
- At the close of the contract work, when off-boarding the client. By now, you would have had a better understanding of the client’s business needs. Thus you can propose to support the work you have just completed or provide some additional value to the client.
4. Draw up the agreement: decide the structure you want to use
This is vital from the perspective of time management. It would help if you decided how you want to work with the client. You can do this in any of the following ways:
- You can have the client pay a given amount of money each month for an agreed-upon amount of time. Note that you must spell out what happens if, for some reason, you did not use all the allotted time, or you spend more than the time in a given month.
- You can have the client pay for a given set of deliverables. The agreement should state what happens if you exceed the agreed-upon amount of work and what happens if an emergency arises with you. Who handles the work in such cases?
- You can have the client pay to have access to you. This is, however, possible if you are a sought-after expert in your field.
5. Define deliverables and their attendant deadlines
After deciding what structure your retainer agreement will take, you must determine the scope of the work and when the client should expect the work to be delivered. Be sure to state these in clear terms, as being vague only sets you up for some headache down the road.
While stating these, you also need to determine what happens if the client requests work that goes beyond the scope of the retainer. Spell out what will happen so that the client knows what to expect.
Your retainer agreement should also include defined deadlines. Determine how often you will deliver on your deliverables and ensure that you stick to the timeline.
6. Getting paid
This is an essential part of your retainer agreement. You have to decide how you want to get paid and how often. Here are a few ideas for you to consider:
- Requesting a lump fee upfront for a period of work
- Getting paid monthly – like a subscription
- A flexible payment schedule based on how much work you deliver in a month
7. Managing your time
Some clients take a retainer agreement to mean that a service provider is available to them round-the-clock. If your client sees a retainer agreement this way, you have to disabuse them of the notion and do it fast. Otherwise, your going into a retainer agreement might mean the end of your life as you know it.
To avoid this unpleasant event, you have to budget your time and manage your workload appropriately. Remember that this client is not the only one you have, and you have an obligation to other clients you are working for. Therefore, you must structure your time to ensure that you can service other clients and take on new work while still meeting your client’s expectations on retainer.
8. Mark your progress: send in regular reports
Reporting on the work you have done, and the progress you have made go a long way in showing your clients that their decision to place you on a retainer is beneficial. It provides proof to the client that they are getting the value they paid for.
The content of the report is dependent on the nature of the services you are providing for them. It should, however, include a previously agreed upon Key Performance Index (KPI). This could be indices such as
- The rate of social media engagement
- Number of blog post readers
- Measurable increase in sales
- Number of website followers
To make things even better, try benchmarking your work and comparing the rate of growth monthly. If your agreed-upon KPI was a set of established goals, show how much progress you have made towards realizing the set goals.
9. Regular reviews
Your retainer agreement should include regular reviews with the client. You could fix reviews annually, biannually, quarterly or monthly. You should also make it clear to the client that if they find displeasure in any aspect of the service you are providing, they should reach out to you immediately.
The reviews should not only be for when they are displeased, but for the entire scope of the service you are providing. This could include market innovations that will benefit the client or stopping some processes that no longer work for the client – either due to growth or changing market.
10. Dispute resolution
Dispute resolution is a crucial part of retainer agreements and should never be overlooked no matter how wonderful the relationship between you and the client appears to be. You must insert a clause on how both parties would handle any dispute that arises. There are four significant ways in which you can resolve the dispute. They are:
As much as possible, you want to avoid litigation. So you should include a clause for which alternative dispute resolution method you would prefer.
Get Retainer Agreement for drafting contracts in the UAE
Choosing a lawyer can make or break a client. If you are in need of legal services, it is important to choose a lawyer that will provide service in a timely manner, is knowledgeable of the law, and provide you with reassurance that case is in good hands. While a lawyer’s experience and credentials are important, what is really important is the type of contract you will be entering into with that lawyer.
A successful retainer agreement is made up of numerous parts that may be too confusing for you to follow. Our lawyers at Amal Khamis Legal Advocates and Consultants can help you with things. All you need to do is answer a few questions about your preferences and leave the rest to us. Reach out to us today and get things started.