Taking the Hassle Out of Managing Evergreen Retainers
6 min read

Taking the Hassle Out of Managing Evergreen Retainers

Written by Raza Hasan

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Evergreen retainers are a smart fee structure for law firms seeking a healthier, more reliable cash flow. When implemented strategically, they offer peace of mind and predictability for both attorneys and clients.  

 But when it comes to managing them, evergreen retainers can pose a challenge if you’re not using trust accounting software that’s, well, trustworthy!  

 Generating retainer invoices and automatically replenishing trust accounts saves countless hours, which can then be redirected toward billable tasks. Yet automating these tasks needs to be done with care to avoid violating the American Bar Association’s (ABA’s) rules and safeguards regarding law firm trust accounts 

 Trust accounting software greatly reduces attorneys’ workload by taking the hassle out of managing evergreen retainers. Get ready to say goodbye to time-consuming and confusing payment structures, and hello to greater financial wellbeing for your law firm with effortless evergreen retainers. 

What are evergreen retainers? 

Payment structures for legal fees can be complicated, but finding ways to streamline them can build trust with clients and increase the consistency of your firm’s revenue.  

 Evergreen retainers are a useful strategy for getting paid. In this straightforward compensation arrangement, the client agrees to maintain a pre-agreed upon balance, called an evergreen retainer, in their client trust account. As services are rendered, the attorney invoices the client for the appropriate charges and transfers money from the client’s trust account to the law firm’s operations account. 

 To ensure the balance never dips below the designated threshold, the client can consent to automatically replenish trust accounts with a card kept on file by the law firm. This is a convenient way to ensure continuity of legal services and that the law firm keeps its revenue stream consistent. Alternatively, the client may feel more secure replenishing trust accounts manually as the attorney sends retainer invoices.  

 Either way, many clients prefer evergreen retainers over other fee structures. They’re more convenient than making repetitive payments for legal services. Evergreen retainers also offer more financial flexibility and predictability for everyone involved because the funds for services are always readily available.  

How to use evergreen retainers at your law firm 

To successfully and ethically implement evergreen retainers at your law firm, you’ll need an airtight lawyer retainer fee agreement. To avoid potential pushback from confused clients, your fee agreement should clearly communicate:   

  • The minimum balance that clients must be maintained in their trust account  
  • How long clients have to replenish trust accounts after receiving a retainer invoice 
  • How much money clients must add to the trust account when the minimum balance of their evergreen retainer is reached  
  • That attorney may cease work on the client’s case if the evergreen retainer is not maintained as agreed-upon  

 The specifics of your fee agreement and evergreen retainers may vary according to each client’s budget or the scope of work required for each client’s legal matters. Alternatively, you may adopt a firm-wide, standardized evergreen retainer policy that’s convenient for your day-to-day operations.   

Of course, attorneys can’t shuffle client funds around without any explanation, even with a fee agreement in place. You’ll need an integrated invoicing process to keep both clients and attorneys stay on the same page about evergreen retainers and replenishing trust accounts.  

Keep your clients informed by making sure your clients receive a copy of all invoices. Label retainer invoices clearly in a way that differentiates them from invoices for specific, prepaid services that are covered by the evergreen retainer. When an invoice totals more than the evergreen retainer’s remaining balance, your clients may also need to be reminded that they are responsible for both paying the remaining invoice balance and replenishing their evergreen retainer.  

Managing Evergreen Retainers and Law Firm Trust Accounts with Trust Accounting Software  

Managing law firm trust accounts is a necessary—but demanding—aspect of practicing law. Making even a simple mistake can lead to severe repercussions, and accusations of blatant mismanagement can be catastrophic for your law firm.  

Yet when a single attorney is responsible for manually tracking evergreen retainers and reconciling several clients’ trust accounts, mistakes are all too easy to make.  

Understanding best practices makes managing law firm trust accounts and evergreen retainers a little less intimidating. For true peace of mind, though, invest in high-quality trust accounting software specifically designed for the legal industry’s rigorous compliance standards. 

Six ways trust accounting software takes the hassle out of managing evergreen retainers 

Trust accounting software, such as TimeSolv, automates sending retainer invoices, replenishing trust accounts, and running trust account reconciliation reports to make managing client funds stress-free. 

1. Track law firm trust accounts with more accuracy and accountability. 

Trust accounting software creates a digital “paper trail” of your firm’s financial activities. It makes it easier to track when money is transferred from client trust accounts to the law firm’s operations account, why, and which attorney moved it.  

This transparency allows for greater accountability amongst your legal team and a measure of protection against potential allegations of trust fund mismanagement.  

2. Autopay invoices from evergreen retainers.  

With integrated trust accounting software, invoices are easily generated from your time tracking data, and sent to your clients at the frequency you choose.  

TimeSolv trust accounting software automatically marks your invoices as “paid” and deducts the appropriate fee from each client’s evergreen retainer. When the evergreen retainer reaches the designated threshold, TimesSolv automatically sends a retainer invoice to the client to remind them to replenish their trust account.  

3. Allow clients to replenish trust accounts with a credit card.  

Law firms are increasingly offering credit card payments as an option for services. This is convenient for clients and speeds up payment for law firms. Make sure evergreen retainers can be covered by credit cards, too. Your clients will appreciate the double convenience! 

4. Replenish trust accounts automatically.  

Ensure that your clients’ evergreen retainers never run dry by replenishing trust accounts automatically. Trust accounting can calculate the proper replenishment amount and communicates the status of and need to replenish trust accounts on client invoices.  

5. Manage multiple accounts and transfer funds between law firm trust accounts.  

Sometimes, clients require more than one trust account, even for a single legal matter. Your trust accounting software should be flexible and convenient, allowing you to create as many IOLTA or COLAF accounts as required to serve your client’s unique needs.  

Moreover, trust accounting software can transfer funds between a client’s evergreen retainers if you need to prevent an account from dipping below the threshold.   

6. Complete one-click reconciliations for law firm trust accounts.  

Three-way reconciliations for law firm trust accounts can be tedious when completed by hand, but with reliable trust accounting software, you can perform monthly reconciliations for all your clients with a single click. TimeSolv’s trust banking report provides an accurate, enlightening overview of your law firm’s cash flow, including the status of evergreen retainers.  

Start Your Free Trial of TimeSolv Trust Accounting Software Today!  

Managing law firm trust accounts will probably never top the list of attorneys’ favorite tasks. Aside from the pressure of overseeing someone else’s money, traditional methods of trust accounting are simply time-consuming and tedious. But with TimeSolv’s trust accounting software on your side, you can manage evergreen retainers with more ease and speed than ever before.  

Take advantage of your free trial today to spend less time crunching numbers and more time providing the excellent services your clients count on.  

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