A fee deposit or advance payment from a client to an attorney for services to be performed in the future remains the property of the client until it is earned by the attorney. Such an unearned fee deposit generally must be held in the attorney’s trust or escrow account and not deposited into the attorney’s operating account or otherwise accessed until the attorney has done the work and earned the fee.

If the client or the attorney terminates the representation at any time, the attorney generally must return the unearned portion of the fee to the client. The terms of the engagement letter or agreement between the attorney and client may impact the attorney's obligation to return unearned fees, and a potential client should read and understand it.

In Indiana, as in many jurisdictions, an advance payment or retainer fee provided by a client to an attorney for future legal services is considered to remain the client's property until the attorney has earned it through performing the agreed-upon services. Consequently, such unearned fees must be kept in a separate trust or escrow account, not in the attorney's operating account. This ensures that the funds are available to be returned to the client if the attorney has not yet earned them. If the attorney-client relationship is terminated before the attorney has fully earned the fee, the attorney is typically required to refund the unearned portion to the client. However, the specific terms of the engagement letter or agreement between the attorney and the client can affect the attorney's obligation to return these funds. Therefore, it is crucial for clients to thoroughly read and understand the terms of any agreement before entering into an attorney-client relationship.