Getting divorced is traumatic for many and unpleasant for most. It often is the first time my clients have a relationship with an attorney. Sure, everyone has seen divorce attorneys portrayed on television and some do fit the stereotypes of Arnie Becker from L.A. Law or Gavin d’Amato from The War of the Roses. While there are some lawyers who are over the top, most are just doing their job trying to help their client thorough an emotional process with the goals of securing favorable custody and financial results.
Yes, divorce lawyers make their livings by billing their time at hundreds of dollars an hour. This creates and interesting (and often unspoken) fact that the attorney may not be as motivated as the client to settle the case expeditiously. Most attorneys set a retainer and have money deposited (in Arizona) in their IOLTA accounts and take the money as their time warrants. This payment process is explained to the client when they first sit down in the office and they sign an ‘Engagement Agreement’. In Arizona, there is also a statute that allows you to claim that the other side should pay your legal fees (ARS § 25-324). While courts frequently order attorneys fees, for a client to count on receiving those funds is NOT a good idea (if it can be avoided) and may limit your ability to settle a case.
Here are a few examples:
Parties have each spent about $30,000 (to date) on legal fees and professional costs for custody evaluations. Husband is current with his attorney’s bill, but wife owes her lawyer over $15,000, as she has been unable to make payments and trial is still 3 months away. They eventually meet with a private mediator who is tasked primarily with brokering a division of a minority interest in a small chain of frozen yogurt stores. Wife would like to keep her share of the interest in the business, but she also knows that she will not have cash to pay her attorney if she settles for more business interest and less cash. Wife did request attorney fees when she filed but is now pushing, thorough the mediation, to get husband to pay her fees that she otherwise will not be able to pay.
While it is not a technical “conflict of interest” wife’s attorney deserves to have her fees paid promptly and may subconsciously (or consciously) try to structure the deal so that attorneys fees are paid promptly. This may mean that wife is nudged to sell her interest in the business, which she would like to keep, or to go to trial and take a chance with the Court awarding fees and dividing assets in an undesirable way.
Parties have been amicably negotiating a divorce and custody terms for 2 months, and despite coming close to agreements, still have a trial date set. Husband’s attorney required a $20,000 retainer anticipating contentious litigation over the division of wife’s dental practice. While they are close to a global agreement, the attorney suggests that they proceed with depositions and to push the other dentist in the practice, by subpoena, to disclose his finances too. However, Husband is confident that the matter will resolve through an informal settlement meeting and wants to keep the acrimony to a minimum, as they are committed to peacefully co-parenting going forward.
Some thoughts to consider as you interview attorneys and consider the ‘cost’ of legal fees:
1. A consultation is actually a dual-interview. You should be determining your comfort level with the attorney and the attorney should be determining if you are a client that they want to represent. While clients have the choice of many attorneys to represent them, often they seek out counsel based on their reputation or expertise in a specific practice area (e.g. community business divisions or defending an abuse allegation.) Similarly, an attorney who never declines clients, even those with deepest pockets, is not vetting their clients right.
2. Just because the lawyer you interview is less expensive hourly than another, does not mean it will be less expensive to litigate. Some firms charge minimums for certain tasks (e.g. 2 hours for pleadings and .3 for phone calls.) Other times the attorney who is less expensive takes much longer to complete the task. E.g. If you are filing a Motion for an Independent Medical/Psychological Evaluation, it may take a less experienced attorney three (3) hours to draft the motion and proposed order, where someone with more experience can produce a quality motion in an hour.
3. A good legal strategy often means cost savings. For example, when it comes to custody issues, Courts do not like to make decisions based on trial presentations. Courts in Arizona prefer that an expert be engaged for an evaluation. Whether it is a Comprehensive Custody Evaluation with a psychologist or an abridged evaluation, such as a Parenting Conference, you need to discuss with your attorney agreeing to a process early in the litigation. Paying attorneys to write letters back and forth about marginal parenting decisions or the propriety of involvement of dad’s ‘new girlfriend’ does not advance the cause. You can save thousands in legal fees by just agreeing to a custody parenting dispute process early in the process. Remember, you can settle portions of the case. (E.g. agree that joint custody is appropriate and where child will live with mom primarily and have alternating long weekends with dad.) Then you can then wrestle about the income to attribute for child support and spousal maintenance etc.
4. Do not discount the use of early meditations and settlement meetings. When things are contentious, have your attorney hire a mediator for an early conference. You would be surprised what can be resolved in the early mediation process. Often this will save thousands of dollars on temporary orders issues. Courts may give you an hour or two to present temporary orders issues. You will save thousands if you can broker a deal without the unpleasantness of this early evidentiary hearing.
5. This is YOUR life. If you think your attorney is not pursuing cost effective ways to get your matter resolved, call them out on it. Sometimes even the best and most cost-efficient attorneys are stymied by opposing counsel or the opposing party who is not willing to constructively work towards a resolution.
Before I respond to gripes from my colleagues who may read this and admonish me for suggesting that some attorneys bill too much, let me say that there are many attorneys who understand the limitations of finance and go above and beyond for their clients, knowing they will not be paid accordingly. A divorce does not have to cost your life savings. As my old friend Lloyd used to say to clients who were at the precipice of settlement…”You can put my kids through college or yours.” You have the control over what is spent and controlling the acrimony is often the key to reining it in.