LNCtips.com: The Unused Retainer

Are you an ethical person?  Most legal nurse consultants think of themselves as honest and honorable.  However, unused retainers can cause lapses of judgment in some legal nurse consultants.  Let's look at how LNCs might have an ethical lapse when an unused retainer is involved.

First, let's clarify a couple of terms.  Retainers are fees paid to legal nurse consultants by attorneys before the LNCs perform any work.  An unused retainer occurs when the number of retainer hours is more than the hours needed for the LNC to perform the work. 

Let's look at an example.  A legal nurse consultant received a retainer in an amount that would cover six hours of work.  However, the LNC only worked five hours.  In this case, there is an unused retainer equivalent to one hour of work.

What would an ethical LNC do with the unused retainer?  Here are three possibilities

1) Bill for six hours of work and keep the retainer.

2) Bill for five hours, inform the attorney, and apply it to the next case the LNC works for the law firm.

3) Bill for five hours and return the remaining retainer.

Number one is definitely an ethical lapse because it's dishonest.  The LNC only worked five hours, not six.

Number two is tempting but there is a problem with it, particularly with defense law firms.  Defense firms typically bill insurance companies separately for each case.  The insurance company in turn either cuts a check for the LNC's retainer or reimburses the law firm when it issues the retainer check.  There's no way to "carry over" excess money from an unused retainer and apply it to the next case.   

The third option is the best answer because returning the retainer is an honest and ethical way to deal with unused retainers.  However, if the LNC specifies that retainers are non-refundable, then option number one, keeping the retainer, is acceptable.  Even number two, applying the retainer to the next case, has possibilities if the legal nurse consultant specifies in writing that the retainer will roll over to the next case.  This option can work if the LNC contracts with plaintiff law firms.

As you can see, it's possible to deal ethically with unused retainers in several different ways.  To avoid misunderstandings, the legal nurse consultant should draft a letter of understanding, which spells out the way unused retainers will be managed.

...Katy Jones