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Escrowed Funds and Retainers

Attorneys cannot spend retainer fees or funds advanced to them (fees, not costs) before earning them. State bar rules require attorneys to deposit all retainer and advance payment funds into interest-bearing accounts, which can only be withdrawn as the legal work is completed and billed against the account. Any interest earned on the account is usually donated to nonprofit legal clinics or (long-term) returned to the client.

If a client believes that an attorney has not returned excess retainer funds, or has not accounted for the entire amount in an itemized statement, the first step should be in the form of registered/certified correspondence to the attorney, requesting explanation. If such a step fails to satisfy the client, the next contact should be to the state bar association, which will have a forum for filing grievances against attorneys.

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