Help please, dear community. How do you calculate how much retainer to ask before starting work? For example, work that you estimate would cost 20-30k total, how much retainer must be asked up front?

Also, what do you if a client cannot pay full retainer? (startup. limited funds) Is there a payment plan legally allowed in NY that transfers risk for non-payment? As always, thanks.

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Mínimum 5k for that amount of work that you expect to be generated. A payment plan should be legal but check the rules of professional conduct. Also make sure you have sufficient client information like bank accounts and SS numbers in the event you have to file an action against them for default or non-payment. It is more common than you may think when practicing with small businesses.

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No less than 20 hours paid up front into a retainer and make it an evergreen retainer.

And I would never do payment plans. Its just poor business in most instances. But it will depend on your clientele.

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Thanks for the recommendations. I agree, it depends on the clientele. Some new business owners/startups have a veryblean budget. Most are honest individuals who can't afford to pay a lump sum but will honor a smaller monthly financial obligation. Any suggestions on how to efficiently work with that group?

I like to tailor legal fees budgets to client’s expectations. It also helps set client expectations.

I also like to look at litigation phases: investigation, pleading, responding, discovery, motion practice, mediation, pre-trial, and trial. It lets the client see where the money goes — informed clients are the best clients. And it helps them to understand that their productive cooperation has an appreciable impact on their costs.

That said, depending on your age, experience, and market, I think you should never work more than about 30 min - 1 hr on a matter before you get a retainer for at least 10-20 hrs, and making it clear that that amount just gets the client into and maybe through the first phase.

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Payment plans are legal in NY.

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