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A law firm received a retainer fee: How much is revenue in 2010

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A law firm received a "retainer" of $10,000 on July 1, 2010, from a client. In rturn, it agreed to furnish general legal advice upon request for one year. In addition, the client would be billed for regular legal services such as representation in litigation. There was no way of knowing how often, or when, the client would request advice, and it was quite possible that no such advice would be requested. How much of the $10,000 should be counted as revenue in 2010? Why?

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Solution Summary

The expert examines a law firm receiving a retainer fee.

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ANSWERS

NOTE: In the OTA's own words in accordance with BM rules

$5,000 ($10,000/12 months x 6 ...

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