Retainer, engagement letter, fee agreement, client care letter: what is the difference?

What is the difference between a retainer and an engagement letter?

Last reviewed: 30 October 2026. This page is organisational information, not legal advice. Rules differ by jurisdiction and change; always read the current version published by your own regulator.

An engagement letter is the document that records the terms of a lawyer's engagement: client, scope, fees and so on. A retainer, in many North American sources, can mean the agreement under which a lawyer is hired, or it can mean money paid in advance to secure the lawyer's services or to be drawn against. Canadian bar association articles on retainer agreements treat it as the contract; US usage frequently includes the deposit sense.

So the practical answer is: the two phrases often describe the same document, but 'retainer' may also describe a payment. When you write to a client, say which you mean.

These are general explanations drawn from the sources listed on this page. Several of those sites could not be opened by us, so check the primary text for your jurisdiction.

Definitions at a glance

What does 'retainer' mean for money?

When people say 'a retainer' they may mean one of several arrangements. These are generic descriptions; the rules about holding and applying such money are local and often strict.

• Advance deposit: money paid before work starts and applied against invoices. Many regulators require such client money to go into a designated account.
• General retainer or availability fee: a payment to secure a lawyer's availability. Terms and treatment differ by jurisdiction.
• Evergreen retainer: a deposit the client agrees to top up when it falls below an agreed level.

If your letter mentions any of these, check how your regulator requires money to be held and recorded. This is a trust accounting question, which belongs in trust accounting software, not a project tool.

• What Notion can and cannot do for trust accounting

Which term should you use with your clients?

1. 1

   Use your regulator's term

   If your regulator or law society publishes sample documents, use its vocabulary.

2. 2

   Define terms in the letter

   One sentence stating what 'retainer' means in your letter avoids disputes about deposits.

3. 3

   Keep one master document

   Use one controlled template with a version date, rather than several near-copies.

4. 4

   Keep the vocabulary consistent in your systems

   Name the database property 'Engagement letter status', not a mixture of 'retainer', 'agreement' and 'contract'.

How do the terms map across countries?

This table is a navigational aid, not an authoritative statement of any jurisdiction's rules.

Where LawyerOS fits

We make LawyerOS, a Notion template; weigh this accordingly. It gives you databases for matters and clients (Pro with AI, $39) where you can record which document type applies and its status. It does not draft or validate any of these documents.

• LawyerOS for Notion: what is included
• Compare LawyerOS Starter and Pro with AI
• Engagement letter checklist by jurisdiction
• Glossary

Frequently asked questions

Is a retainer the same as an engagement letter?

Often they describe the same document, but 'retainer' can also mean an advance deposit or availability fee. Because usage varies by country and firm, define the term in your own letter and follow your regulator's vocabulary.

What is a client care letter?

In England and Wales, a client care letter is the letter giving a client information about the service, how they will be charged and how to complain. It sits alongside regulator transparency requirements. Check the SRA's current guidance for what it expects.

What is the difference between costs disclosure and a costs agreement?

In Australia, costs disclosure is the information about costs given to a client, usually before or at the outset, while a costs agreement is the agreement on how costs will be charged. They can be combined or separate, depending on the state and the matter.

Do I need both a fee agreement and an engagement letter?

Not always. Many firms put fee terms inside the engagement letter, and others use a separate fee agreement. Some jurisdictions have specific rules for certain fee types. Check your regulator and insurer guidance.

Does an advance retainer belong in my operating account?

In many jurisdictions, advance fees are client money and must be held in a designated account until earned. Rules differ, so check your regulator. Use proper trust accounting software for the ledger rather than a notes or project tool.