What is a retainer, anyway? This term is widely misused by everybody, including attorneys. The true definition of retainer is a fee you pay to secure the services of that lawyer--you are entering into a contract with the lawyer, and you are saying "I am hiring you and paying you money to reserve your services". This fee is considered owed when paid. This is usually referred to in Chattanooga as a "nonrefundable retainer". This is what I use. That means this money goes straight to my main bank account. As I work on your case, I bill for my hours. If you use up all of your retainer money, I may have to ask you for more.
Some attorneys, however, view the "retainer" or fee paid up-front for services as a deposit and put it in a lawyer's "trust account". As the attorney works on your case, the attorney bills and moves the money from the trust account to his or her main bank account. The attorney is holding the money in trust to you until actually earned.
How does the difference affect me? As a practical matter, it doesn't. You will pay a fee up-front when you hire the attorney to represent you, and as the lawyer works on your case, he or she will pay themselves from this fee. If the case is more complex than the lawyer thought, you will likely be billed for more money. And, in either case, if the lawyer withdraws early or is fired by you, the lawyer is obligated to return the unearned portion to you.
All of this information on retainers was gently plagarized from The ABA Guide to Lawyer Trust Accounts by Jay G. Foonberg, J.D., C.P.A.