Evergreen Retainer

A retainer arrangement in which a client deposits a fixed sum into the lawyer's trust account at the outset of representation, with the lawyer billing against that balance as work is performed and periodically invoicing the client to replenish the retainer back to its original level, so that a minimum balance is continuously maintained for the duration of the engagement. Evergreen retainers are distinct from a general advance-fee retainer that is drawn down to zero and not replenished, and from a true engagement or availability retainer, where a flat fee is paid specifically to secure the lawyer's availability regardless of hours worked — a structure some jurisdictions treat as earned upon receipt rather than held in trust, subject to state-specific ethics guidance. Funds held under an evergreen retainer remain client property until earned through billed work and must be held in the firm's trust account under standard trust accounting rules, with only the earned portion transferred to the firm's operating account after invoicing. Evergreen retainers are common in corporate, transactional, and ongoing-representation hourly practices as a mechanism to manage client credit risk and ensure the firm is not carrying significant unbilled or uncollected exposure to any single client relationship over an extended engagement.

For a firm with an hourly-fee practice, evergreen retainer coverage is a direct credit-risk mitigant that reduces the firm's receivable financing need, because the firm is effectively pre-collateralized against a client's ability to pay for ongoing work rather than carrying open, uncollected invoices.

When a firm markets its receivable base to a lender, the proportion of client relationships covered by evergreen retainers versus open invoicing is a material underwriting input, since retainer-covered revenue carries materially lower collection risk than aged, uncollateralized hourly billings.