Dear Danielle:

I’ve secured a small contract and have another interested prospect. My question is two-part regarding retainers. First, how do you decipher the length of the contract (6 months, 12 months)? And secondly, I’ve noticed that some consultants charge a deposit of first and last month’s retainer fee; where others require only the first month’s fee due with signed contract. Your thoughts?

This is a very timely question. I’ve actually been meaning to post something about this for the longest time. I quite frequently see posts in various forums by folks who it’s clear don’t quite seem to understand the whole retainer thing.

The first thing to understand is that when we talk about retainers, we aren’t talking about project work. A retained relationship is one where clients pay a monthly fee upfront to have your support each month. You determine the parameters of what that support will consist of based on your consultation conversations with clients.

In an administrative support business, retainers are going to be your bread and butter. It’s where the bigger, better money is, as well as dependable cashflow. And the great thing is that once you have a retained client base with regular income, you have a much easier road to hoe than those who try to make a living based on nothing but project work, where you are on a constant hamster wheel chasing after the next clients, the next projects, even as you’re working on what’s on the plate in front of you.

Now, as far as the contract goes, the retainer agreement doesn’t have anything to do with how long you work together. It’s there to cover the terms, conditions and expectations of the relationship regardless of how long you work together, whether that’s a month, six months, a year or longer.

You don’t need to define upfront how long the relationship is going to be. It’s simply month to month. You only need to have them sign an agreement once a year.

And even if you don’t have them sign a new agreement once a year rolls by, whatever contract and/or addendums were last in place is what is in effect (this will naturally depend on what laws are involved in your own locality so you should always double-check on stuff like this with an attorney).

Either way, it’s a good idea to have clients sign a new agreement every year that you continue to work together because as your business evolves and matures, and as you make changes to your policies and such, you will want those changes reflected and enforced in your agreements. It’s also a good opportunity to remind both of you of your agreements and commitments to each other.

As far as locking clients into some number of months of work together upfront or collecting first and last months’ retainers, there isn’t really a right or wrong way. I can definitely see the smartness in that. At the same time, I think you may have a more difficult time getting a brand spanking new client you’ve never worked with before to part with that much money when they don’t know you or what they’re going to get just yet. But, hey, if you can pull it off, more power to you.

Beyond that, I can only tell you my own personal preference, which is that I prefer not to hold clients hostage to me as far as forcing them to commit to more than one month at a time.

You should expect a minimum commitment from clients in order to make it worth your while to work with them. A minimum commitment is also absolutely necessary in order for you to get some idea of the big picture of their business, allowing you to do your best work and provide a higher quality of support.

However, I prefer to let trust grow organically. Expecting new clients to commit to a month at a time is far more reasonable. Then, as they see things actually progress, they naturally want to continue working together.

In the retainer contracts I sell, there is a clause that allows either of you to terminate the relationship with at least (x) days written notice (you determine what “x” is, but I recommend 20 days). This gives both of you a fair and reasonable way to end the relationship that doesn’t hold anyone hostage nor leave either of you in a lurch. You can then get a head start on replacing the income and announcing an opening in your roster.

Another thing I see folks confused about (and I know some of them are getting this from training they have taken) is they seem to go about the relationship as if they were still employees. They think (and are sometimes told) that they need to give clients some sort of “trial” or “probationary” period.

Look, I’m here to tell you this is absolutely ridiculous and unnecessary in a professional service relationship, especially when you are using a retainer contract like mine that has a built-in termination clause.

You’re in business to help people and earn money while doing so. You’re not an employee anymore so stop thinking like one! You either decide to work together or you don’t. It’s that simple.

Clients are grown-ups. Once you choose to work together, they can decide for themselves whether the relationship and support is working for them or not. Your job as a business owner is simply to select clients who are the best fit and then give those clients your best work.

And with the month-to-month contract with the 20- or 30-day termination provision, either of you can end the relationship for whatever reason.

In that sense, every month is a “trial” period, but you shouldn’t be discussing things in those terms in your business conversations. It’s just ridiculous. You either expect the monthly commitment or you don’t. It couldn’t be simpler or plainer than that.

What you should be doing as part of your usual process in working with both new and long-term clients is checking in with them periodically about how things are going.

I recommend that for at least the first three to six months, you meet with new clients by phone once a week, but no less than every other week. From there, you can determine together whether to continue with your regular meetings or decrease their frequency. It’s during these phone meeting that you should be having this “how’s it going” conversation with clients, along with your regular talk about work and goals and such.

With your more established clients, it’s likely you will eventually both find that regular meetings simply aren’t needed as you end up becoming really attuned to each other otherwise.

With those clients, I still like to meet once a month on the phone because the voice adds another way to nurture that human connection and relationship, especially when we so often never meet our clients in person.

And with all retainer clients, I recommend getting their feedback every six months.

I want to emphasis this has nothing whatsoever to do with a “probationary” period. I’m gonna kick your butt if I hear you using that term. This is simply taking good care of your clients by always striving to stay attuned to their feelings and needs.

If you are meeting with clients regularly by phone, you will be naturally doing this through those conversations. It has nothing to do with being on a probationary or trial period. It’s called taking good care of clients.