If you’re on this page, you’re a service provider and you want to establish long-term client relationships and financial security.
Did you know that agencies utilize retainer agreements as their primary pricing model? Yup, which highlights their importance in ensuring both predictable revenue and ongoing client relationships.
You could say it's a you scratch my back I scratch yours type of relationship.
This article explores everything you need to know about writing an effective retainer agreement, from understanding its purpose to outlining key features and essential tips for drafting one.
Key takeaways
- Retainer agreements provide predictable income and foster long-term client relationships.
- Common retainer types include paid-in-advance, monthly recurring, and project-specific retainers.
- Key elements in a retainer agreement are the scope of work, payment terms, and termination clauses.
- Clear expectations, communication, and handling of scope creep are vital to prevent misunderstandings.
- Tools like Qwilr can streamline the creation, tracking, and signing of retainer agreements for greater efficiency.
A couple of key terms you should know
Below, see some helpful salesy vocabulary flash cards. You learn something new every day…
- Scope creep – When a project starts small but snowballs into extra tasks and last-minute “quick favors.”
- Force majeure – A legal “oops” button that covers unexpected events, from natural disasters to world-shaking crises, so neither party gets unfairly penalized.
What is a retainer agreement?
A retainer agreement is a contractual arrangement between a service provider and a client, in which the client pays an upfront fee (or ongoing payments) to secure the provider’s services over a specified period. This arrangement helps ensure continuous access to professional expertise while providing predictable income for the service provider.
Retainer agreements are commonly used in industries such as legal services, marketing, consulting, SaaS, and creative industries. They define the scope of work, payment structure, termination clauses, and other terms to ensure clarity and accountability for both parties.
Types of retainer agreements
Whether you’re locking in a long-term gig or offering flexible support, there’s a retainer type that suits the job. Below are some of the most popular flavors, from set-fee structures to “call me when you need me” arrangements.
1. Paid-in-advance retainer
This type of agreement involves the client making an upfront payment before services are rendered. The payment is typically deducted as work is completed. This is common in legal services and consulting firms.
Best for: Lawyers, business consultants, and specialized experts who provide one-off consultations or project-based work.
2. Monthly recurring retainer
In this arrangement, the client pays a fixed fee on a monthly basis in exchange for ongoing services. This is often used in marketing, IT, and creative services where businesses require continuous support.
Best for: Digital marketers, IT support teams, designers, and public relations professionals who provide ongoing services.
3. Retainer for a specific scope of work
In this model, the client retains a professional for a predefined scope of work over a period. This type is ideal for projects that require long-term involvement but with well-defined deliverables.
Best for: Software developers, content writers, or branding consultants handling large-scale projects.
4. General retainer
A general retainer secures the availability of a service provider without necessarily tying payment to specific work. This is common in legal services where an attorney may be on standby for a client but may not necessarily perform work every month.
Best for: Attorneys, executive consultants, and crisis communication specialists who provide on-demand expertise.
The tale of the phantom client: The ‘when’ and ‘why’ behind retainer agreements
Imagine you’re a freelance graphic designer named Ally. One day, a client - let’s call him Dave - comes rushing in, frantically waving his arms.
"Ally, I need a logo! No, wait - an entire brand identity. Actually, could you also design a website? Oh, and let’s throw in some social media templates while we’re at it!"
Excited by the opportunity, you dive in, creating brilliant designs at lightning speed. But just as you prepare to send the final files, Dave disappears. Gone. Vanished like a magician in a puff of unpaid invoices.
Weeks pass, and suddenly, Dave re-emerges. "Hey, Ally! Quick tweak to the website? Oh, and can we add three more pages? Also, I forgot to mention -I need this done by tomorrow!"
By now, you're drowning in unpaid work, scope creep, and frustration. If only there had been a retainer agreement…
Moral of the story: A retainer agreement would have saved Ally from the nightmare of chasing payments and last-minute demands. By securing a consistent income, setting clear boundaries, and defining expectations, retainers protect both service providers and clients from misunderstandings and unexpected chaos.
Key features to include in a retainer agreement
So, Ally, this one’s for you. Here’s exactly which features to spell out in an agreement. Plus, we’ve included a top tip, or pro move!
1. Parties involved
Clearly state the names and contact details of both the service provider and the client. This ensures that both parties are legally recognized in the contract.
Pro move: Include business registration numbers and addresses to make the contract legally binding and professional.
2. Scope of work
Define the services covered under the agreement, including the specific tasks, responsibilities, and deliverables expected. Providing a clear scope helps prevent misunderstandings and awkward conversations like: “I didn’t know this was expected of me?”.
Pro move: Break down tasks into categories and provide examples of what is covered and what is not to avoid scope creep.
3. Payment terms and fees
Detail the payment structure, including:
- The amount of the retainer fee
- Payment schedule (monthly, quarterly, or annually)
- Accepted payment methods
- Whether the fee is refundable or non-refundable
Pro move: Add a clause for late payments and interest charges to discourage delayed payments.
4. Duration of the agreement
Specify the length of time the agreement will be in effect, whether it is for a fixed period (e.g., six months) or ongoing until terminated by either party.
Pro move: Mention renewal terms and conditions if the agreement is meant to be extended.
5. Termination clause
Outline the conditions under which either party may terminate the agreement, including required notice periods and any financial implications of early termination.
Pro move: Include a refund policy if the client terminates the contract before the completion of services.
6. Revisions and additional work
“Okay, so you need me to do things over and above my existing duties?”
No problem. Clarify how additional work outside the agreed scope will be handled, including additional charges and approval processes.
Pro move: Define an hourly or project-based rate for extra work to avoid surprises.
7. Confidentiality and non-disclosure
There’s nothing worse than hearing via the grapevine that Include confidentiality clauses to protect sensitive business information shared during the engagement.
Pro move: Use a separate non-disclosure agreement (NDA) if the retainer involves high-security projects.
Easily add NDAs to your web-based proposals and sales collateral with Qwilr
8. Dispute resolution
Describe how disputes will be resolved, whether through mediation, arbitration, legal action, or in the ring with boxing gloves. (Jokes - that’s what you don’t want.)
Pro move: Specify a neutral jurisdiction for arbitration if working with international clients.
10. Signatures
A retainer agreement is not legally binding unless signed by both parties. The signature section should include:
- Printed names of both parties
- Designation (if applicable)
- Date of signing
Pro move: Use electronic signature software like Qwilr for efficiency.
Collect legally-binding e-signatures with Qwilr
11. Miscellaneous
This section covers additional clauses that may not fit into other categories but are still important, such as:
- Severability clause (ensuring that if one part of the agreement is invalid, the rest remains enforceable)
- Amendment process (how changes to the agreement should be handled)
- Waiver clause (ensuring that failure to enforce a term once does not mean it's void forever)
Pro move: Customize this section to include anything unique to your industry or working arrangement.
Additional sections that will make your retainer agreement bulletproof
11. Expectations and communication
Outline the preferred method and frequency of communication. This prevents clients from expecting immediate responses at 2 AM or assuming you’ll be available to respond while you’re at your best friend’s baby’s gender reveal...
Pro move: Specify response times and preferred communication channels (email, phone, Slack, etc.).
12. Late payments and penalties
Specify what happens if the client doesn’t pay on time. Late fees? Does work stop until payment is made? This ensures you’re not chasing payments like a bounty hunter.
Pro move: Add an automatic payment reminder system using invoicing software.
13. Force majeure clause
Life happens: pandemics, natural disasters, or alien invasions (hey, you never know). This clause protects both parties if unforeseen, natural events make fulfilling the agreement impossible.
Pro move: Specify a time frame after which services may be paused or resumed if a force majeure event occurs.
Nurturing long-term client relationships through retainer agreements
A retainer agreement is not just about setting up terms for payment and services - it’s also an excellent opportunity to cultivate a long-term, mutually beneficial relationship with your clients. Here’s how you can manage and nurture that relationship effectively over time:
Set clear milestones and review points
A long-term relationship doesn’t mean the work should go untracked! Set clear milestones or review points throughout the agreement to check progress, provide quarterly business reviews to reassess the scope, and ensure the client’s needs are still being met.
Why it’s valuable: It keeps both parties aligned on expectations and allows for any necessary adjustments before problems arise.
Be transparent and communicate regularly
Consistent communication is key to maintaining trust. While you should outline communication expectations in the retainer agreement, it’s equally important to maintain a transparent, open line of dialogue. Keep clients informed of progress, challenges, and changes. Rather over-communicate than under-communicate!
Why it’s valuable: It’s quite simple. The client wants to be in the loop.
Provide value beyond the scope of work
Go the extra mile to provide additional value, even if it’s not strictly part of the retainer agreement. This could be offering helpful insights, proactive suggestions for improvement, or simply checking in on the client’s business.
Why it’s valuable: Providing value beyond the agreed scope can deepen the client’s trust in your services and make them more likely to renew or expand the scope of your retainer agreement. It’s all about the EFFORT.
Offer performance-based incentives
We can’t deny that it works like a charm. Consider incorporating performance-based incentives into your retainer. For example, if you exceed KPIs or achieve certain milestones, you could offer a discount or bonus to the client, or even shower your team with epic rewards for achieving the set targets.
Why it’s valuable: It creates a win-win scenario, fostering a sense of collaboration and shared success that will likely motivate both parties to maintain the relationship.
Revisit and evolve the agreement periodically
Over time, both you and your client may experience shifts in business needs. Every six months or year, take the opportunity to revisit the terms of the agreement, ask for feedback, and update it to reflect new goals or changes in workload.
Why it’s valuable: Regularly updating the agreement ensures that the terms stay relevant, increasing the likelihood of continued engagement and avoiding potential dissatisfaction down the line.
By focusing on these strategies, what are you absolutely slam dunking in the bag? You’re firstly viewing the retainer as a partnership rather than just a contractual obligation, secondly, you’re building stronger, more sustainable client relationships that drive long-term business success.
Retainer agreement template
Why not make things a bit simpler for yourself with Qwilr’s retainer agreement template?
The template is fully customizable but covers all of the fundamentals to get you started.
Here’s what you can expect from Qwilr’s Retainer Agreement Template:
- Introduction: Sets the stage with a warm welcome and a brief overview of the agreement.
- Retainer overview: Summarizes the ongoing working relationship, including scope and expectations.
- Responsibilities: Defines what both parties are accountable for to avoid miscommunication.
- Pricing: Clearly outlines costs, payment terms, and any additional fees.
- Testimonial: Adds credibility with a past client’s glowing review.
- FAQs: Answers common questions upfront to streamline communication.
- T&Cs: Covers legal details like confidentiality, termination, and liability.
- Call-to-action: Encourages the client to sign and move forward smoothly
Looking for something a bit more formal? Qwilr’s agreement feature allows you to attach plain-text, formal agreements alongside your interactive proposals and sales collateral. Your clients can then accept your proposal, sign the agreement and make payment all on one comprehensive web-based document.
You don’t need to reinvent the wheel. Qwilr’s web-based documents have been designed to save time and energy.
Retain & maintain with Qwilr
Here's what retainer agreements ensure: crystal-clear expectations, steady cash flow, and a client relationship smoother than a freshly paved highway.
And here’s what they prevent: scope creep disasters, late payments, and the dreaded “I thought you were handling that” conversation.
It’s easy to lock in a well-built agreement. Sign up for a free trial and see for yourself.
About the author
Brendan Connaughton|Head of Growth Marketing
Brendan heads up growth marketing and demand generation at Qwilr, overseeing performance marketing, SEO, and lifecycle initiatives. Brendan has been instrumental in developing go-to-market functions for a number of high-growth startups and challenger brands.
