Retainer agreement template for agencies

Why retainers go wrong

Retainers are the steadiest revenue an agency has, and the easiest to lose money on. The usual problems:

• The scope is "support". So every request is in scope, and the hours grow while the fee doesn't.
• Unused hours are unclear. The client expects them to roll over forever; you expected them to expire.
• No price for extra work. Overflow gets done "this once" at no charge, every month.
• No way out. Nobody wrote down how the retainer ends, so it ends badly.

Retainer agreement template

Retainer agreement

This agreement is made between [Client name], company number [number] ("the Client"), and [Agency name], company number [number] ("the Agency"), and runs alongside [our standard terms / the master services agreement dated …].

1. Services. Each month the Agency provides up to [number] hours of [services, e.g. design, development and maintenance for the Client's website]. Examples of included work: [list]. Not included: [list, e.g. new websites, paid media budgets].

2. Fee. The Client pays [amount] per month excluding VAT, invoiced in advance on the first working day of each month, with payment due within [number] days.

3. Unused hours. Unused hours [expire at the end of each month / roll over to the next month only, up to [number] hours].

4. Extra work. Work beyond the monthly hours is billed at [rate] per hour excluding VAT. The Agency asks for approval before going more than [number] hours over in a month.

5. Response times. The Agency starts on requests within [number] working days, and on urgent issues within [number] working hours.

6. Term and notice. The retainer starts on [date] and runs for at least [number] months. After that, either party may end it with [number] days' written notice.

7. Reporting. Each month the Agency shares the hours used and what they went to.

8. Ownership and confidentiality. As in [the standard terms / master services agreement].

Pricing tips

• Price the availability, not just the hours. Being on call has a value even in a quiet month.
• Review every quarter. If the client uses 140% of the hours three months running, the retainer is wrong, not the client.
• Log the hours. Clients renew retainers they can see the value of. A monthly summary of what the hours went to does more than any clause. See time tracking for agencies.

Send it from your agent

Keep the retainer as a template in Pledge, then:

Make a retainer agreement for Northwind: 20 hours a month of website support at 2 400 a month, starting 1 January, unused hours expire, extra hours at 130.

Your agent fills in the template, shows it to you in Claude, ChatGPT, Codex or Cursor, and sends it for signature when you say so.

This article is not legal advice.