Retainer Agreement
A retainer agreement establishes the terms for ongoing, recurring client relationships — the commercial backbone of a healthy agency.
What is a Retainer Agreement?
A retainer agreement is a contract under which a client pays a regular fee (usually monthly) in exchange for ongoing access to the agency's services. Unlike project-based engagements, retainers create predictable revenue and allow the agency to plan resources more effectively.
The challenge with retainer agreements is defining the scope without being either too rigid (frustrating clients who have variable needs) or too vague (creating expectations the agency cannot meet). The best retainer agreements specify a monthly scope, define how unspent hours or credits roll over, and include a clear process for managing additional requests that exceed the retainer scope.
When do you need a Retainer Agreement?
- ✓When a client wants ongoing access to your agency's services on a recurring basis
- ✓When a client's monthly work volume is relatively consistent and predictable
- ✓When you want to secure a client's commitment beyond individual project engagements
- ✓When a client needs access to your team for ongoing strategy, content, or support
- ✓Before the first month of an ongoing engagement begins
Key provisions to include
Monthly Retainer Fee
Fixed monthly amount and payment date, typically invoiced in advance at the start of each month.
Retainer Scope
Description of what services or hours are included in the monthly fee.
Rollover Policy
Whether unused hours or credits roll over to the next month and any cap on rolled-over credits.
Out-of-Scope Work
How additional requests beyond the retainer scope are quoted, approved, and charged.
Reporting
What usage reports the agency will provide and how often.
Minimum Term
Minimum engagement period (commonly 3 or 6 months) before either party can terminate.
Termination Notice
Notice required to terminate the retainer after the minimum term.
Common mistakes to avoid
Not specifying what is included in the retainer, creating open-ended client expectations
Allowing rollover hours to accumulate without a cap, creating a liability of unused hours
No minimum term — without one, clients can terminate on short notice after benefiting from discounted retainer pricing
Not including a clear out-of-scope process, forcing the agency to absorb additional work within the retainer fee
Frequently asked questions
Should I charge in advance or in arrears for retainer work?
In advance. Monthly retainer invoices should be issued at the start of each month, payable before the month's work begins. This ensures you are never owed money for work already completed and protects you if the client terminates mid-month.
What is a reasonable rollover policy for retainer hours?
A common approach is to allow one month's rollover — unused hours from Month 1 can be used in Month 2, but expire at the end of Month 2. This prevents the accumulation of large rollover balances while giving clients some flexibility.
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