Retainer Agreements for Businesses in The UAE
Retainer Services For Companies in The UAE
retainer agreements for businesses
A retainer agreement is unique in the business arena because you get paid upfront for work you are yet to deliver on. This is different from what is typically obtainable in business transactions, where you must deliver before you get paid.
A retainer agreement is highly beneficial, especially for freelancers whose work life is typically lived with the pendulum swinging between “feast or famine”. There is either a lot of work at a time or a shortage of it. Having a retainer agreement with clients helps provide a freelancer with the stability of income while also providing an adequate opportunity to build his or her portfolio.
Additionally, having a retainer agreement or more on your portfolio confers the ‘expert’ status. This is because the retainer agreement causes potential clients to perceive you as an expert and have a lot of value to offer them. “I mean, (s)he couldn’t have had a retainer agreement with a person if (s)he didn’t know what (s)he was about”, says a potential client.
While a retainer agreement is a covetable thing for a freelancer, note that it does not work for freelancers alone but for just about any business person looking to stabilize their revenue flow. This said, it is crucial to understand what a retainer agreement is and how you can use it to a significant effect on your business. At Amal Khamis Advocates and Legal Consultants, we offer Retainer services for companies and businesses in the UAE.
What is a retainer agreement?
A retainer agreement is a contract between freelancers and their clients that retains the freelancer’s services for an extended amount of time and provides the freelancer with a stable payment schedule. A retainer agreement differs from other forms of contracts or pricing models because the client pays in advance for your services. Sometimes, the exact nature of the service is not clearly spelled out. However, the services are covered in the scope of the work template you have made available to them.
Aside from the nature of the service you are expected to render, the retainer agreement also outlines the different obligations on both parties and the expectations from both sides. This may include work principles, retainer fees, modes of communication, and other professional ground rules.
Why a retainer agreement is suitable for your business?
Businesses, especially those in the service industry, are beginning to rely more on retainer agreements. It has lots of benefits that a savvy business person cannot turn a blind eye to. These benefits do not apply to the service provider alone but to both the service provider and their clients. Some of them are:
A retainer agreement plan ensures that a service provider, a freelancer, in this case, will get paid continuously. With the reliability of income at the end of the month, the service provider can focus entirely on their clients’ needs and issues and deliver premium quality work. This happens not just because the freelancer is assured of income at the end of the month but also because rather than spend time looking for new paying clients, the freelancer can dedicate that time to the retained client.
The clients also benefit from the arrangement in that they are assured of the availability of their service provider. Also, retainer agreements have a way of streamlining work processes, thus resulting in better profits for the clients and, ultimately, the service provider. The freelancer’s relationship with clients on a retainer agreement tends to be deeper and more fulfilling than regular clients. This is due partly to the increased amount of time both parties have to work with each other and the opportunity that time affords each party to refine the delicate nuances of the relationship.
The reliability of a retainer agreement enables the freelancer to accurately predict cash flow per time, thus providing better clarity and, invariably, better structure for the business. With a steady cash flow, freelancers are better able to handle the expenses their business attracts.
The Not-So-Great parts of retainer agreements
As incredible as retainer agreements sound from the client perspective and the freelancer perspective, it is not without drawbacks. Though some may argue that its benefits far outweigh its flaws, it is vital to know all the facts before choosing a retainer agreement. Some of the drawbacks are:
● Locking yourself in
For most freelancers, the choice to become freelancers was made because they wanted to be in charge of how they spent their time – including who to work with per time and what work to be doing.
With a retainer agreement, some of that “freedom” is taken away because you bind yourself to your client for a specific number of hours. Those hours don’t belong to you anymore, and whatever you would have been doing with that time would no longer be possible.
● Throwing money away
From the client’s perspective, you run the risk of “spending money you don’t need to spend”. This is because there could be some periods when you don’t need the services of your consultant or freelancer, but because of the retainer agreement between both parties, you are bound to pay the person.
For this reason, both parties must spell out their obligations and expectations when drafting the retainer agreement and review it properly to ensure they are comfortable with the contract. Once you sign the dotted lines, you are legally bound, and deviating from the agreement’s requirements could make you liable for a lawsuit.
Types of retainer agreements
While virtually any business can benefit from retainer agreements, the idea of retainers is majorly embraced by consulting firms, freelancers, and legal services. This said, there are two significant types of retainer agreements that the businesses mentioned above may benefit from.
- Retainer agreements to pay for work done
- Retainer agreements to pay for access to a service provider or consultant
Retainer agreements paying for work done
With this type of retainer agreement, a service provider or consultant is paid for their monthly work. It is not so different from the typical freelancer’s work, except that as a service provider on retainer, you are assured of some work coming your way from that client and invariably, some income.
This option might be best for a freelancer just getting into the arena of retainer agreements with clients. Of course, this is also dependent on the type of service the freelancer would be offering.
Retainer agreements paying for access
This option is a prime one and is typically only available to service providers who have gained the coveted status of ‘expert’ or ‘authority in their chosen field. In this model, a consultant does not need to calculate work done to get paid. Instead, the mere fact that they are available for the client is enough to get them paid, even if they do not use their services more than once or twice a month.
The pay-for-access model dramatically increases the value of a service provider because it shows that the client deems your work exceptional enough to keep paying you to be accessible to them rather than say goodbye to you.
Retainer agreements in the UAE
Retainer plans are a key to long term success and sustainability of any business. Retainer agreements are the contracts that formally define the nature of your relationship with your attorney. This is a more secure and less expensive way to access legal services and plan for the future.
At the offices of Amal Khamis Advocates and Legal Consultants, we offer you a wide range of services, including drafting your retainer agreements for you. Because the world of business is constantly in flux due to the innovations arising every day, it is essential to have retainer agreements that reflect the fluidity of the times. You will get all that and more when you hire us to be your attorney. Reach out to us today, and let’s get started.