The Pros and Cons of Creating a Freelance Retainer Agreement

A big worry for many freelancers is financial security. One month you might be invoicing for thousands of dollars, and the next, nothing at all. Consistent pay is a dream for freelance professionals but unless there are certain systems in place, it can remain elusive. One of these systems is what is known as a retainer agreement. 

A retainer is a contract between a freelancer and a client in which the client pays in advance for certain services on a recurring schedule. The client pays a set amount of money, usually monthly, in return for work being carried out according to pre-planned frameworks.  

Some freelancers base the majority of their income around retainer work, especially if their freelance services can be repeated month after month for the same client. Examples of such services might include virtual assistance tasks, consulting or coaching, business blogging, and social media management.

What are the pros of freelancer retainer contracts?

There are many benefits to creating retainer contracts. They are also easy to set up, especially with automated invoicing software. With Invoice Ninja, for example, you can create a recurring billing system that invoices clients at predetermined intervals. 

The main benefits of creating a client retainer include: 

Steady work and pay

For anyone who has turned to freelancing after working in traditional employment, the shock of suddenly having no fixed salary can be rather brutal. It’s scary not knowing how much you’ll be earning from one month to the next. 

A series of retainer agreements with different clients brings some stability to your freelance career and ensures you have a reasonably good idea of your minimum income each quarter. What’s more, you won’t have to repeatedly look for new clients every week.  

Client familiarity

Retainer work breeds familiarity and this can be a huge benefit when it comes to both workflow and cash flow. When you work with the same clients, month after month, over a long period of time you get to know their businesses and target markets. This enables you to complete projects faster and with more precision.  

Time is money when you’re a freelancer. The more you streamline your processes and increase familiarity with client projects, the more you’ll earn. 

Good relationships

Working on a monthly (or quarterly) retainer also increases the chances of developing good long-term relationships with a select few clients. You get to know each other over months and even years. This differs from one-off projects where you work with a client for a few weeks and then never hear from them again. 

Steady retainer work can suit freelancers who thrive on stability and familiarity. If you’re shy, for example, or socially anxious, constantly meeting and getting to know new clients can be stressful. Developing retainer agreements is a great way to avoid the constant need to meet new people. 

What are the cons of freelancer retainer contracts?

Retainers are perfect, right? Well, not quite. There are also some drawbacks to retainer agreements. If you’re not careful you can find yourself out of pocket and seriously overworked. 

The retainer drawbacks include: 

Discounted rates

Many clients will expect you to offer a discounted rate for ongoing work, as opposed to a one-off project. This might not seem fair but it’s common practice among freelancers and even agencies to offer a slightly lower price for recurring work. It’s difficult to push against this prevailing retainer fee practice. 

As such, you might find yourself working for a lower rate than you might do for a single project. Although the benefits of familiarity and speed, as mentioned previously, can mitigate this issue somewhat. 

Difficult to raise prices 

Once you are set in a retainer contract with a certain rate, it’s difficult to then raise your rates at a later date. Clients are less likely to budge once they have become accustomed to a certain recurring fee amount. 

You will need to prove to an existing retainer client that a raise in rates is justifiable. Unless you’re producing fantastic results, this is difficult. Your ability to get a raise will depend on how much your client feels their success or wellbeing is dependent on your unique skills and work. 

Scope creep

Scope creep can be a serious problem with retainer contracts. When you make yourself available to a client for different types of ongoing tasks, without clear parameters, you can very quickly find yourself overbooked and overworked. Some clients (see: bad clients) will unfortunately take any advantage they can to get as much out of you as possible. 

This is why it’s essential to keep track of the hours you work for each client. You can achieve this using a time tracking tool, which comes included in our invoicing and project management software. By recording your work hours, you can ensure you are being fairly compensated for your time, and renegotiate accordingly. 


Retainer contracts provide a sense of security, and for good reason. However, they are of course not impervious to termination. If you’re working with just one or two high-paying clients, then a loss of a retainer can mean 50% of your income disappearing suddenly. 

And the end of a long-term freelancer-client relationship is not always about the quality of your work. Companies go bust, decision-makers are replaced, or a marketing budget is reduced – all of which are completely out of your realm of influence. 

It’s wise, as the cliché goes, to have your eggs in multiple baskets so the loss of one retainer will not be a big short-term problem. 

Is a retainer service a good idea for your business? 

If your freelancing business relies on providing ongoing work to the same clients, then creating a retainer agreement will be an excellent idea. 

Offering retainers allows you to productize your services. You can offer different degrees of pricing based on the number and types of services within each package deal. This can be a great pricing strategy and makes it easier for clients to pick and choose from a service menu. 

It’s important to set clear expectations and rules when developing retainer contracts. Make sure to set a predetermined payment schedule together with open communication channels and even a data-sharing portal.  

With careful planning and mutual respect, retainer agreements can be hugely beneficial components of a thriving freelance business.